Updates to the Central Bank of Ireland AIFMD Q&A

On 24 June, 2021, the Central Bank of Ireland issued the 39^th edition of its AIFMD Q&A, which updates QAs ID 1021 and ID 1136 and includes two new Q&As, ID1143 and ID1144.QA ID 1021 has been updated generally and to clarify the extent to which an Irish depositary can perform duties for non-EU AIFs pursuant to Article 36(1)(a) of the AIFMD.

QA ID 1136 now confirms that a Depositary of Assets other than Financial Instruments (DAoFI) (commonly referred to as a specialised depositary) can be appointed to act in respect of AIFs which are not regulated by the Central Bank. A DAoFI can only accept such an appointment from an AIF which meets the criteria for AIFs set out in Regulation 22(3)(b) of the European Union (Alternative Investment Fund Managers) Regulations 2013, as amended (the Irish AIFM Regulations). Additionally, the DAoFI must not accept an appointment if the AIF is established for the purpose of investment by retail investors.

New QA, ID 1143 confirms that a DAoFI may accept an appointment to perform the duties in Article 21(8) to non-EU AIFs which meet the criteria for AIFs set out in the Irish AIFM Regulations. Notwithstanding the provisions of Central Bank QA ID 1136 above, a DAoFI may accept an appointment from a non-EU AIF to perform the duties in Article 21(7) and Article 21(9), including from AIFs which do not meet the criteria for AIFs set out in Regulation 22(3)(b) of the Irish AIFM Regulations.

QA ID 1144 confirms the Central Bank’s position in relation to AIFs having a share class that makes distributions to charity. The Q&A confirms that this is permissible, subject to a number of conditions being met by the AIF, namely:

• An investor actively elects to subscribe to such a share class (for example, opting into the share class via subscription forms) and should not be automatically invested in such a share class.
• That the distributions should only be paid to a charity which is approved / authorised / registered in the relevant jurisdictions. Details of the charity and evidence of their approval / authorisation / registration status should be provided to the Central Bank when establishing the share class;
• The prospectus / supplement must clearly set out:
  • The implications of such a share class (i.e. that the relevant charity and not the investor which will benefit financially from distributions from the fund);
  • Details of the charity to which the distributions are being made and the circumstances under which such distributions will take place; and
  • That such distributions will not be paid out of the capital of the fund.
• Periodic reporting to investors (for example, in the annual reports) should take place and include the amounts that have been distributed to charity.

(source: Central Bank of Ireland)