The Irish Funds Industry Association (IFIA) has welcomed the consultation by the Central Bank of Ireland (CBI) to enhance fund management company effectiveness and efficiency.
The consultation proposes further enhancements to the existing governance structure and includes a proposal to rationalise the current list of 15 designated functions under AIFMD to six functions.
It is also proposed that UCITS management companies (and self-managed UCITS) managerial functions will similarly be rationalised to six.
In order to ensure the availability of the necessary skillsets required to oversee these functions the CBI are relaxing their requirement to have two Irish resident directors. Firstly, the CBI is defining what Irish resident means (i.e. that a director will have to spend at least 110 working days in the country per annum). Secondly, it will be possible to replace one Irish resident director with a director who has the necessary competencies and who commits to making themselves available to the CBI if needed.
Under the proposed regime boards will also have to document the adequacy of their combined expertise and provide a rationale for the board’s composition ensuring they have an appropriate balance of skills and competencies, and keep the effectiveness of the board under on-going review. The consultation also proposes guidance for boards on the oversight of delegates such as investment managers and distributors.
Pat Lardner, CEO of the Irish Funds Industry Association, says: “The funds industry in Ireland has achieved strong growth through a combination of excellent practices with pragmatic, proportionate and sound regulation. This new consultation from the CBI reflects a further evolution to ensure Irish investments funds and management companies continue to have efficient and robust oversight and governance procedures. We welcome this period of consultation on such an important subject, as well as the need for an appropriate transitional period once the guidance note is finalised. This will ensure boards have sufficient time to implement the new regime.”
