The Asset Management Review: Ireland

Overview of recent activity

At the time of writing the previous edition of this chapter, it appeared the world was in the worst throes of the covid-19 pandemic. Lockdowns, border closures, the collapse of travel and trade and financial market volatility had become a global reality. A year on and covid-19 remains a reality. However, with the development and roll-out of vaccines, we have started to see societies and economies reopen.

Despite the turmoil created by the pandemic, financial markets recovered strongly following the crash in early 2020, and the global economic outlook for 2021 is positive. For example, GDP is expected to grow by 4.2 per cent across the European Union in 2021, with expected GDP growth for Ireland at 4.6 per cent. This is despite the fact that Ireland is perhaps uniquely exposed to the economic impact of Brexit due to Ireland's level of trade with the United Kingdom and the fact that two-thirds of Irish exporters make use of the UK land bridge to access continental markets. As such, despite the ongoing challenges related to the pandemic and Brexit fallout, the Irish economy has demonstrated sufficient resilience to give cause for cautious optimism about Ireland's prospects for the current year and into 2022.

With regard to the financial services sector specifically, we have continued to see significant activity with many new fund management company applications being made to the Central Bank of Ireland (Central Bank) and total assets in Irish domiciled funds reaching an all time record high of €3.51 trillion in April 2021. One of the key drivers in asset growth has been the exchange-traded fund (ETF) market, with Ireland being the largest hub for ETFs in the European Union. Recent changes in Irish limited partnership legislation is also hoped to prove attractive for asset managers seeking to establish structures focusing on private equity, venture capital, private debt and real assets investment strategies in Europe.

General introduction to the regulatory framework

The Central Bank is responsible for the authorisation and supervision of regulated financial service providers in Ireland, including regulated investment funds, investment managers, and insurance and reinsurance undertakings. The powers delegated to the Central Bank are set out in the laws and regulations applicable to the relevant financial services sector. In addition, the Central Bank issues guidance in relation to various aspects of the authorisation and ongoing requirements applicable to financial service providers. In general terms, the Central Bank expects that best practice be adopted by an authorised entity, and requires that financial services providers have systems, procedures and policies in place to ensure that regulatory requirements are met and to mitigate risk.

The regulation of pension schemes is a matter for the Pensions Authority, the statutory body for the pensions industry in Ireland.2

Common asset management structures

Ireland as a domicile provides a variety of potential asset management structures (structures), which can be broadly categorised as regulated by the Central Bank or unregulated.

i Regulated structures

There have been four main types of regulated fund structure in Ireland: Irish collective asset management vehicles, variable capital investment companies, unit trusts and common contractual funds. Each of these regulated fund structures may be established as UCITS pursuant to the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011, as amended (UCITS Regulations)3 or as an alternative investment fund (AIF) pursuant to the EU (Alternative Investment Fund Managers) Regulations 2013 (AIFM Regulations).4

In addition to the above, a regulated investment limited partnership (ILP) is also available as a structure for AIFs. However, owing to certain constraints within the original legislation establishing these structures, the Investment Limited Partnership Act 1994 (the 1994 Act), ILPs have not to date been utilised as much as industry would have liked. Following industry engagement with government, the 1994 Act has recently been amended by the enactment of the Investment Limited Partnerships (Amendment) Act 2020 (the 2020 Act). The 2020 Act looks to modernise the law governing ILPs in Ireland with a view to making the ILP the vehicle of choice for implementing private equity, venture capital, private debt and real assets investment strategies in Ireland and Europe. As well as modernising the ILP in line with other types of Irish investment fund structures, the amendments to the existing ILP regime are intended to bring the ILP in line with comparable partnership structures in other leading jurisdictions by incorporating 'best in class' features for this type of vehicle.

Each of the structures may be organised in the form of umbrella schemes with segregated liability between compartments (sub-funds).

Irish collective asset management vehicle

An Irish collective asset management vehicle (ICAV) is an Irish corporate investment fund vehicle that has been specifically tailored to the needs of the global funds industry. Since its introduction in 2015, the ICAV has proven to be the most popular structure for new funds established in Ireland. One of the main reasons for the popularity of the ICAV is that, unlike investment companies established in Ireland as public limited companies, an ICAV that is structured as an umbrella fund is only required to produce financial accounts at a sub-fund level while a public limited company must produce financial accounts at the umbrella level (resulting in investors in a sub-fund receiving financial accounts for all of the sub-funds in the umbrella). In addition, there is no requirement for an ICAV to hold an annual general meeting of shareholders, and non-material changes can be made to the ICAV's by-laws without shareholder approval. The ICAV may also be eligible to elect to be treated as a transparent entity for US federal income tax purposes, unlike an investment company established as a public limited company, which is not eligible to make such an election.5

Variable capital investment companies

A variable capital investment company must be incorporated as a public limited company pursuant to the Irish Companies Act 2014, as amended. The day-to-day management and control of the investment company are undertaken by a board of directors (although this can be delegated to a management company), with ultimate control resting with the shareholders. Provided that this day-to-day management and control of the investment company take place in Ireland, an investment company can obtain a certificate of Irish tax residency from the Irish tax authorities and is not liable for Irish tax on its income or gains.

Unit trusts

A unit trust is a contractual arrangement constituted by a trust deed entered into between an Irish management company and a trustee. The assets of the trust are held by the trustee, but the beneficial ownership of the assets remains with the unit trust's unitholders. Unlike an investment company or ICAV, a unit trust does not have a separate legal personality, and contracts in relation to the trust are entered into by the management company on behalf of the trust, or a particular sub-fund of the trust, as provided for in the trust deed.

Common contractual funds

The common contractual fund (CCF) is a tax-transparent structure first established in Ireland in 2003. It was specifically developed to facilitate the pooling of pension fund assets in a tax-efficient manner so that the investing pension funds would be treated from a tax perspective in the same way as if they made the underlying investments directly rather than through the CCF.

The CCF is an unincorporated body established by an Irish management company pursuant to which investors participate and share in the property of the CCF as co-owners. As a co-owner, each investor in a CCF is deemed to hold an undivided co-ownership interest as a tenant in common with other investors. CCFs are constituted under contract law by the execution of a deed of constitution between a management company and a depositary. As an unincorporated body, a CCF does not have separate legal personality.

Investment limited partnerships

The ILP is also a tax-transparent structure. An ILP is an unincorporated body created by contract between the general partner(s) and one or more investors who participate as limited partner(s). As an unincorporated body, the ILP does not have separate legal personality. There is no limit on the number of limited partners in an ILP and in general they are not liable for the debts and obligations of the ILP. The general partner is responsible for the management of the ILP's business and is liable for the debts and obligations of the ILP. As mentioned above, there have been a number of recent enhancements introduced to the ILP structure by the 2020 Act including the following:

  1. Umbrella ILPs: ILPs may now be established as umbrella schemes with segregated liability between sub-funds. This structure is attractive as it allows separate strategies or investor types to be accommodated in different sub-funds of the same umbrella.
  2. Safe harbours: if a limited partner takes part in the management of an ILP, the limited partner may lose the benefit of limited liability. The 2020 Act broadens the safe harbours, which allow limited partners take certain actions without being deemed to take part in the management of the ILP. For example, sitting on advisory committees and approving changes to the limited partnership agreement.
  3. Amendments to the limited partnership agreement by majority: the 2020 Act removes the requirement for all the limited partners to approve an amendment to the limited partnership agreement. Instead, the limited partnership agreement may be amended by majority of the general partners and limited partners (and in some instances where the depositary certifies that the changes do not prejudice the interests of limited partners an amendment may be made without limited partner approval).
  4. Withdrawal and redemption by investors: the 2020 Act streamlines the process for the contribution and withdrawal of capital in line with the process applicable to other Irish fund vehicles and partnership structures in other jurisdictions.

ii Unregulated structures – limited partnerships

The limited partnership established pursuant to the Limited Partnership Act 1907 (the 1907 Act) is the most favoured structure for unregulated investment funds in Ireland.

A limited partnership is a partnership between one or more general partners and one or more limited partners, and is constituted by a partnership agreement. To have the benefit of limited liability, the limited partners are not permitted to engage in the management of the business of the partnership or to contractually bind the partnership: these functions are carried out by the general partner. There is a general limit of 20 partners in a limited partnership established pursuant to the 1907 Act, although this limit can be raised to 50 where the limited partnership is formed 'for the purpose of, and whose main business consists of, the provision of investment and loan finance and ancillary facilities and services to persons engaged in industrial or commercial activities'.6

iii Liquidity

Fund structures regulated by the Central Bank may be open-ended with liquidity, closed-ended with no liquidity or have limited liquidity, which means they are open to redemption at least one or more times during the life of the fund. One exception is where the regulated structure is authorised by the Central Bank pursuant to the UCITS Regulations, in which case the structure is required to be open-ended with at least two redemption dates per month.

Closed-ended schemes are generally subject to the Prospectus Regulation7 unless otherwise exempted (qualifying investor AIFs are generally able to avail of an exemption). In addition, closed-ended schemes may, in certain circumstances, be subject to other European regulations (e.g., the Transparency Directive8 and Takeovers Directive9).

Main sources of investment

i Regulated investment funds

Ireland's success as an onshore domicile for investment funds is well known, and the development of Ireland's funds industry continues to be an area of strategic importance for the Irish economy. Statistics show that Irish-domiciled investment funds had over €3.51 trillion in total assets in April 2021 (up from €2.91 trillion at the end of March 2020). The April 2021 figures show the continued resilience of the Irish funds industry following the global market turmoil brought on by the covid-19 pandemic and in fact represents a record high in total assets for the industry. While the majority of assets under management are held in UCITS funds, Irish-domiciled AIFs had in excess of €826 billion in net assets in April 2021. The majority of the investment in these regulated investment funds comes from non-Irish institutional investors.

ii Insurance and reinsurance

As of June 2021, there were 37 life insurers, 93 non-life insurers and 60 reinsurers (including captives and special purpose reinsurance vehicles) with head offices in Ireland. There were a further 8 life insurers and 28 non-life insurers with branches in Ireland. In addition, 124 life insurers and 637 non-life insurers operate in Ireland on a freedom-of-services basis pursuant to the relevant EU Directives. Fifteen life insurers authorised in the United Kingdom or Gibraltar and 33 non-life insurers authorised in the UK or Gibraltar previously operated in Ireland on a freedom of services basis but are now permitted to run off their business as part of the Central Bank's temporary run-off regime.10 In 'Insurance Corporations Statistics for Q1 2021', the Central Bank indicated that Irish (re)insurers hold €168.223 billion worth of investment fund shares including €59.621 billion in equity fund shares, €44.963 billion in bond fund shares, €1.994 billion in real estate with the remaining €61.644 billion invested in mixed and other funds.11

iii Pension schemes

The Irish Association of Pension Funds estimates the total assets of Irish pension funds exceeds €153.9 billion (figure at the end of 2019), but no precise details are available on how these assets are invested or what proportion of assets are under the management of Irish authorised investment managers. The Pensions Authority has, however, published the results of its defined benefit scheme review of 2020 statistics (based on the annual actuarial data returns submitted to it by 31 March 2021). The asset allocation of the 560 active and frozen defined benefit schemes in Ireland (with assets of €70.5 billion) is as follows:

  1. 24.5 per cent in equities;
  2. 35.3 per cent in EU sovereign bonds;
  3. 9.8 per cent in other bonds;
  4. 4.4 per cent in property;
  5. 2.7 per cent in cash;
  6. 0.1 per cent in net current assets;
  7. zero per cent in with profit insurance policies; and
  8. 23.2 per cent in 'other' (which includes absolute return funds, alternative assets, hedge funds, commodities, derivatives, global absolute return strategies and annuities).

Key trends

In terms of insurance and reinsurance, there are significant international and domestic (re)insurers headquartered in Ireland. In 2016, the introduction of a new prudential regime under Directive 2009/138/EC on the taking-up and pursuit of the business of insurance and reinsurance (Solvency II) forced (re)insurers established outside the European Economic Area (EEA) to assess whether to redomicile their global operations in a European centre such as Ireland. Since 2017, this trend continued with UK based (re)insurers looking to relocate within the EEA as a Brexit contingency solution. Ireland has remained one of the most sought-after European countries for (re)insurers looking to redomicile.

With regard to asset management and investment funds, Ireland emerged as a favoured EU hub for UK investment firms seeking a European base post-Brexit because of the relative advantages it has over a number of other EU countries across a number of metrics including tax, legal system, labour laws and regulation. This has continued to be an observable trend, with many new management company applications being made to the Central Bank and established Irish management companies and AIFMs topping up existing licences to facilitate the undertaking of additional MiFID activities from their Irish base. By the end of 2020, there were 358 management companies registered in Ireland, an increase of approximately 100 since the United Kingdom voted to leave the European Union.

The continued positive growth in net assets of Irish-domiciled funds has also been remarkable as markets rebounded post the initial turmoil created by the covid-19 pandemic. In particular, the continued growth of the ETF market globally has benefitted Ireland as the leading jurisdiction for the establishment of ETFs in Europe.

Sectoral regulation

i Insurance

The principal regulations governing insurers and reinsurers are the European Union (Insurance and Reinsurance) Regulations 2015 (the 2015 Regulations), which transposed Solvency II into Irish law and entered into force on 1 January 2016. They are supplemented by the Insurance Acts 1909 to 2018 and the regulations made under those Acts. The Solvency II legal framework applying to Irish (re)insurers also includes the European Commission delegated regulations and implementing regulations, and relevant Level 3 European Insurance and Occupational Pensions Authority guidance on interpreting Solvency II requirements. (Re)insurers must limit their activities to those for which they are specifically authorised, to the exclusion of all other business activity. The Central Bank imposes strict rules on (re)insurers to formalise appropriate internal policies and procedures to ensure that investment risks relating to assets used for regulated capital purposes are adequately managed. The rules in relation to asset management activity by (re)insurers are governed by the rules set out in Solvency II.

Solvency II codified and harmonised insurance regulation throughout the EEA, and set new standards for the amount of capital that (re)insurers must hold based on their individual risk profile, as well as new standards for governance, risk management and supervision, and reporting and transparency. Under Solvency II, asset managers need to provide insurance clients with greater levels of detail in relation to the assets underlying their investments than was previously required. The implementation of Solvency II has been the most substantial regulatory change affecting Irish and European (re)insurers in many years, as it provided for a new risk-based capital adequacy regime.

Solvency II also involved significant changes for asset management by (re)insurers. Solvency II has introduced across EEA Member States, for the first time, a solvency calculation based on an economic and prospective approach to the risks inherent to the business conducted (re)insurers both on the asset and liability side As a result, a key factor in the calculation of a (re)insurer's regulatory capital requirements is market risk. Under Solvency II, (re)insurers are able to invest in any asset (in the interests of policyholders and beneficiaries), including high-risk and volatile assets, provided they are willing to hold the necessary extra capital for this risk.

Provisions in relation to asset allocation affect which funds insurers can choose to invest in because of the prescribed methods for the valuation of assets and liabilities. Solvency II requires that (re)insurers diversify their asset portfolios, which will affect a (re)insurer's choices in investment funds. Asset managers should be aware of the different capital charges that are applied to assets and liabilities. Of particular interest is the market risk module, which is split into the following sub-modules: interest rate risk, equity risk, property risk, spread risk, concentration risk and currency risk. Different categories of assets and liabilities will be subject to different rules depending on how they are classified. For example, structure debt and equity investments are subject to favourable capital charges.

(Re)insurers must have processes in place to ensure the appropriateness, accuracy and completeness of the data that they use to calculate their capital requirements. To comply with this requirement, (re)insurers are likely to demand assurances from asset managers that the data they have received meets these standards, and that there are appropriate governance and control procedures in place to ensure these standards are met. Under Solvency II, there must be a higher level of transparency in the funds in which insurers invest. This includes complying with the 'look-through' approach, which states that (re)insurers must base their risk assessment of a fund on the assets that underlie the fund. Asset managers of funds will be obliged to provide details of these underlying assets to (re)insurers or risk losing (re)insurers' business.

Under Solvency II, (re)insurers must have close relationships with their asset managers owing to the increased pressure to provide detailed data within tight time frames. Asset managers must ensure they have product strategies that reflect the requirements of Solvency II in relation to asset allocation to ensure that their portfolios remain attractive to (re)insurers.

Recent developments in the insurance sector

Following Brexit, UK- and Gibraltar-based (re)insurers who were previously licensed to carry on business in Ireland on a freedom to provide services or freedom of establishment basis have now lost their passporting rights to carry on (re)insurance in Ireland. Consequently, 48 such firms have entered a temporary run off regime, established under the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Act 2020, which enables those firms to run off their existing business but prohibits them from entering new insurance contracts.

Covid-19 has had a substantial impact on the insurance industry. In March 2020, EIOPA and the Central Bank instructed insurers not to make dividend payments in light of the ongoing crisis. Significant market volatility has resulted in uncertainty in insurers' business plans.

Regulation (EU) No. 1286/2014 on key information documents for packaged retail investment and insurance-based investment products (PRIIPs Regulation) introduced, on a pan-European level, a standardised pre-contractual disclosure document (key information document (KID)) for the benefit of retail investors purchasing certain packaged retail investment products or insurance-based products that, following the postponement of the initial application date, came into effect on 1 January 2018. Products within the scope of the PRIIPs Regulation, include:

  1. life assurance-based investment products;
  2. investment funds;
  3. structured term deposits; and
  4. derivatives.

There are a number of products explicitly excluded from the PRIIPs Regulation, including notably non-life insurance products, pension products and annuities not recognised in national law. However, any product that falls under the definition of PRIIPs must also be sold to retail investors to fall within the scope of the PRIIPs Regulation. The KID is required to include information under certain prescribed headings, including:

  1. information on the product manufacturer;
  2. a description of the main features of the product as well as costs borne by the investor;
  3. the risk–reward profile of the product;
  4. performance information, including future performance scenarios and expected returns;
  5. a comprehension alert highlighting that the product may be difficult to understand;
  6. how complaints can be made; and
  7. certain other relevant information that may be necessary for understanding the features of the product.

The European Union (Insurance Distribution) Regulations 2018, which transpose Directive (EU) 2016/97 on insurance distribution (Insurance Distribution Directive) (IDD) in Ireland came into effect on 1 October 2018. The IDD represents a noteworthy departure from the manner in which insurance and reinsurance distribution is regulated. In particular, the IDD aims to enhance EU regulation of the insurance market by ensuring a level playing field for all participants involved in the sale of insurance products to strengthen policyholder protection, promote cross-sectoral consistency and make it easier for firms to trade on a cross-border basis. One of the most significant changes introduced by the IDD involves additional requirements that apply to (re)insurers and insurance intermediaries when they carry on insurance distribution relating to the sale of investment-based insurance products.

Regulation (EU) No. 2019/2088 on sustainability-related disclosures in the financial services sector (the Disclosures Regulation) entered into force on 29 December 2019 but will only apply from 10 March 2021. It requires any person selling an investment-based insurance product to disclose 'sustainability risks' in respect of that product to investors. 'Sustainability risk' is defined as being 'an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of an investment'. If an investment-based insurance product promotes environmental and social characteristics, further disclosures as to how those characteristics are met must be provided at the pre-contractual stage. The purpose of the Disclosures Regulation is to make finance flows consistent with the European Union's commitment to lowering emissions and ensuring climate-resilient development. To assist with the identification of products as promoting environmental and social characteristics, Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment (the Taxonomy Regulation) and its delegated acts provide technical guidance on the classification of activities based on sustainability factors. More information on the Disclosure and Taxonomy Regulations and the wider European Union sustainable finance framework can be found below in Section VI.v.

The Consumer Insurance Contracts Act 2019 (CICA) introduces significant changes in relation to contracts between insurers and consumers (which is widely defined to include not only natural persons but also including unincorporated bodies such as clubs and charities as well as incorporated bodies with an annual turnover of less than €3 million). CICA was partially commenced in September 2020. Provisions that were commenced at that point invalidate 'basis of contract' clauses that have the effect of turning pre-contractual representations into contractual warranties. These provisions also abolished the principle that a claimant under a policy must have an insurable interest. The rights of third parties against insurers were also enhanced and limitations on subrogation rights were introduced. More burdensome provisions of CICA will come into force in September 2021. These include the abolition of the traditional principle of utmost good faith to be replaced by a duty on consumers to answer all questions honestly and with reasonable care. Similarly, at renewal stage, consumers will only be required to update information if the insurer makes such a request. Proportionate remedies for misrepresentation by consumers will also come into force, which make distinctions between innocent, negligent and fraudulent misrepresentation. More onerous requirements will be placed on insurers to provide details of premiums paid by consumers at renewal stage.

ii Pensions

The trustees of a pension scheme are constrained in the investment choices they may make by the governing documents of the scheme (or, if no investment powers are contained in the pensions scheme, by the Trustee Act, 1893 and the associated Trustee (Authorised Investment) Orders, and by statute). The Pensions Acts 1990 to 2018 (the Pensions Acts) impose a duty on the trustees of pension schemes to provide for the proper investment of the resources of the scheme.

In general, the trustees of a pension scheme will be given the power to appoint one or more investment managers under the scheme's governing documents. An investment manager appointed to pension scheme assets will be bound by any restrictions on investment in the scheme's governing documents and by the relevant statutory restrictions. These restrictions will generally be referred to in the investment management agreement. Ultimately, trustees cannot delegate their primary responsibility to invest, and trustees remain under a continuing obligation to supervise the investment manager.

Irish pension schemes must comply with domestic legislation transposing Directive (EU) 2016/2341 of the European Parliament and of the Council of 14 December 2016 on the activities and supervision of institutions for occupational retirement provision (IORP II), which sets a common basis for the operation and supervision of pension funds in EU Member States. The main requirements of IORP II were transposed in Ireland through amendments to the Pensions Acts, although one-member arrangements benefit from a derogation from new requirements until 22 April 2026 and an open-ended derogation from the investment rules and borrowing restrictions in respect of investments made or borrowings entered into before the IORP II transposition date.

With regard to investment decisions, the Pensions Acts (as amended for IORP II) require trustees to invest in accordance with the prudent person rule and, among other stipulations, to invest assets in the interests of members and beneficiaries as a whole. When investing, the trustees of a scheme must invest its resources:

  1. in such a manner as to ensure the security, quality, liquidity and profitability of the portfolio as a whole;
  2. predominantly in regulated markets (and, where there is investment in assets that are not admitted to trading on a regulated financial market, the trustees must keep any such investment to prudent levels); and
  3. in such a manner that the resources shall be properly diversified in such a way as to avoid excessive reliance on any particular asset, issuer or group of undertakings and accumulations of risk in the portfolio as a whole (and, for that purpose, where the trustees invest in assets issued by the same issuer or by issuers belonging to the same group, they must invest in a manner that shall not expose the scheme to excessive risk concentration).

If the trustees of a scheme have invested in the employer, they must not invest more than 5 per cent of the resources of the scheme as a whole and, where the employer belongs to a group, they must not invest more than 10 per cent of scheme resources in the undertakings belonging to the same group as the employer. If a scheme is sponsored by a number of employers, the trustees must invest in those employers prudently and take into account the need for proper diversification.

Investment by the trustees of a scheme in derivative instruments is possible insofar as such instruments contribute to a reduction in investment risks or facilitate efficient portfolio management provided (1) they are valued on a prudent basis, taking into account the underlying asset, (2) they are included in the valuation of the assets of the scheme, and (3) the trustees avoid excessive risk exposure to a single counterparty and to other derivative operations.

When investing, the Pensions Acts now also provide that the trustees of a scheme may, in accordance with the prudent person rule, take into account the potential long-term impact of investment decisions on environmental, social and governance factors.

Recent developments in pensions asset management

The European Market Infrastructure Regulation (EMIR),12 which entered into force on 16 August 2012, seeks to ensure greater transparency in the financial system by, inter alia, regulating transactions in over-the-counter derivatives (OTCs) in the EU. Pension schemes that use OTCs fall within the scope of EMIR, albeit with some exemptions from the full force of the Regulation, and the trustees of a pension scheme are responsible for compliance with EMIR. Under EMIR, pension schemes are classified as 'financial counterparties' along with financial institutions (such as banks, hedge funds and custodians), but pension funds have been exempted from compliance with some aspects of EMIR for a period of time.

Since 12 February 2014, financial counterparties, including trustees of pension funds, have to report any new OTCs that they enter into with the trade repository within one business day of entering the contract. Any amendments to the terms of OTC transactions and any early terminations of OTC transactions must also be reported from 12 February 2014 onwards. Any OTC transactions that were entered into on or after 16 August 2012 and that remained outstanding on 12 February 2014 also had to be reported on 12 February 2014. All counterparties to a transaction, including the trustees of pension funds, must maintain a record of concluded or modified OTC transactions for at least five years after they have been concluded or modified. Pension funds were granted an exemption from the EMIR clearing requirements for certain OTC trades. The last such exemption was granted in May 2021 when it was agreed that the exemption from the requirement would continue until 18 June 2022, leaving the possibility of one further one-year extension if insufficient progress is deemed to have been made on solutions to deal with outstanding issues regarding 'the cash collateral problem'.

Reporting requirements for pension schemes have been introduced by the European Insurance and Occupational Pensions Authority (EIOPA) and the European Central Bank, by regulation published in the Official Journal of the European Union on 26 January 2018. This regulation came into force on 15 February 2018 but the first annual reporting deadline set by the Pensions Authority was deferred until 31 December 2020. This regulation requires certain pension funds to report, on a quarterly and annual basis, detailed data on assets, liabilities and members.

There are reduced reporting requirements for pension funds based on their assets or size of membership. The Central Bank of Ireland is responsible for the collection, compilation and transmission of this statistical data.

With effect from 29 January 2019, all occupational pension schemes established under trust were required to (among other things) take 'all reasonable steps' to gather and hold certain information on the pension scheme's beneficial owners and set up a beneficial ownership register. This requirement has now been revoked for approved schemes. The effect of commencement of relevant sections of the Criminal Justice (Money Laundering and Terrorist Financing) (Amendment) Act 2021, along with the coming into operation of the European Union (Anti-Money Laundering: Beneficial Ownership of Trusts) Regulations 2021, meant that, with effect from 24 April 2021, occupational pension schemes (where established as an approved scheme pursuant to Part 30 of the Taxes Consolidation Act 1997), among other arrangements (including approved retirement funds), are excluded from the requirement to establish and maintain a beneficial ownership register. It also meant that they are not included in the new requirement to file a return of beneficial ownership information to the state's central register of beneficial ownership established for trusts.

The Second Shareholders' Rights Directive has been transposed into Irish law by the European Union (Shareholders' Rights) Regulations 2020 (the SRD Regulations). The SRD Regulations aim to increase transparency and shareholder engagement in corporate governance.

The SRD Regulations apply to 'relevant institutional investors', which includes a pension scheme where the scheme is (1) an occupational pension scheme regulated in Ireland, and (2) invests directly, or through an asset manager, in shares traded on an EU regulated market. If a pension scheme meets these criteria, it must publicly disclose an engagement policy, its investment strategy and any arrangements that it holds with asset managers. Public disclosure means publishing the information to make the matter available 'free of charge on the website of the relevant institutional investor'. Guidance is awaited as to how this requirement should be interpreted in a context where the trustees of most occupational pension schemes regulated in Ireland do not host a scheme website.

Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector (SFDR) took effect on 10 March 2021. The SFDR requires 'financial market participants', which includes pension funds, to disclose certain sustainability information to prospective and current scheme members and beneficiaries. The overall aim of the SFDR is to support the European Union's goals in relation to climate, sustainability and the environment. The SFDR requires the information to be made available to include:

  1. where the pension fund considers the adverse impacts of investment decisions on sustainability factors (defined as environmental, social and employee matters; respect for human rights; anti-corruption; and anti-bribery matters):
    • a statement of due diligence policies regarding those impacts, including (at least) identification and prioritisation of the impacts, a description of the principal impacts, brief summaries of engagement policies and a reference to adherence to responsible business conduct codes; and
    • from 31 December 2022, a clear and reasoned explanation of whether and how it considers adverse impacts on sustainability factors, and a statement that more information is available in the pension fund's annual report;
  2. where such adverse impacts are not considered, clear reasons for why the pension fund does not do so, including, where relevant, information as to whether and when it intends to consider such adverse impacts;
  3. information regarding the consistency between the pension fund's remuneration policies and 'the integration of sustainability risks' ('sustainability risk' is defined as an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment);
  4. the manner in which sustainability risks are integrated into the pension fund's investment decisions;
  5. the extent the pension fund includes financial products that promote environmental or social characteristics, further details including:
    • a description of the environmental or social characteristics or the sustainable investment objective; and
    • a statement of the methods of assessing and measuring impacts, including data sources, screening criteria and relevant sustainability indicators; and
  6. for prospective members only, an assessment of the prospective impact of the relevant sustainability risks on investment returns.

As mentioned above, in the context of investment requirements, IORP II has been transposed into Irish law (with effect from 22 April 2021), setting a minimum standard for the management and supervision of pension schemes in order to protect the entitlements of members and beneficiaries. In addition to updating the investment requirements, the legislation introduces many new obligations on Irish pension schemes including:

  1. minimum qualification and experience standards for trustee boards;
  2. the appointment of key function holders for risk management, actuarial and internal audit;
  3. requirements for written policies on risk management, internal audit, remuneration and, where relevant, actuarial and outsourced activities;
  4. standards for internal controls, administrative and accounting procedures, contingency plans; and
  5. communications and information to be provided to active members, prospective members, deferred members, those nearing retirement and pensioners.

Transposition of IORP II introduces to the Pensions Acts a requirement on the Pensions Authority to adopt a forward-looking and risk-based approach to supervising pension schemes, and provides it with powers to intervene where the interests of members are believed to be under threat. Its transposition also deletes provisions from the Pensions Acts that previously exempted small schemes and one-member arrangements from various provisions. Various transitional measures are provided for however, including for existing one-member arrangements so that some provisions will apply to these one-member arrangements from the end of a five-year derogation period (i.e., from 22 April 2026). They also benefit from an open-ended derogation from the investment rules and borrowing restrictions in respect of investments made or borrowings entered into before the transposition date.

iii Alternative investment funds

Regulated investment fund structures in Ireland may be established as UCITS (authorised by the Central Bank pursuant to the UCITS Regulations) or AIFs (authorised by the Central Bank pursuant to the AIFM Regulations that implement the Alternative Investment Funds Managers Directive (AIFMD)).

UCITS are subject to various liquidity requirements, investment restrictions (both in terms of permitted investments and required diversification), and borrowing and leverage limits. The UCITS III Product Directive13 and the Eligible Assets Directive14 significantly increased the range of permissible investments for UCITS, which enabled alternative investment fund managers to adapt their investment approach to the UCITS model, giving the market access to liquid alternative UCITS funds. However, because of the various leverage and counterparty exposure restrictions that apply to UCITS and the fact that a UCITS may not appoint prime brokers to rehypothecate fund assets, there are limits on the type of alternative or hedge fund strategies that can be used by a UCITS. The limits on a UCITS being able to pursue an alternative fund strategy needs to be balanced against the fact that some institutional investors and pension funds are able to invest a higher percentage of their assets in a UCITS than into unregulated funds or even regulated non-UCITS funds. However, if the strategy does not fit within a UCITS framework, managers will establish the product as an AIF.

AIFs are regulated by the Central Bank pursuant to the AIFMD Regulations, which are supplemented by the Central Bank's AIF Rulebook.15 The AIFMD Regulations implement the AIFMD into Irish law.16 AIFs encompass all non-UCITS or alternative funds, not just hedge funds. Whether a particular AIFM is within the scope of the AIFMD depends on its location and that of the AIFs it manages, as well as the countries into which the AIFs are marketed. In summary, the AIFMD applies to all EU AIFMs that manage one or more EU or non-EU AIFs; all non-EU AIFMs that manage one or more EU AIFs; and all non-EU AIFMs that market one or more EU or non-EU AIFs in the EU.

The AIFM can be either an external manager of the AIF or the AIF itself, where the legal form of the AIF permits internal management (e.g., the Irish variable capital investment company and ICAV) and the AIF chooses not to appoint an external AIFM (an internally managed AIF). If an internally managed AIF is authorised as an AIFM and is permitted to delegate this function to a non-EU manager, that manager does not have to be authorised as an AIFM under the AIFMD. This point is of particular importance as it allows non-EU managers to access European markets without having to become authorised as AIFMs.

Irish AIFs may be established as retail investor AIFs (RIAIFs) or qualifying investor AIFs (QIAIFs) under the rules as set out in the AIF Rulebook. The AIF Rulebook also specifically provides for the establishment of particular AIF structures: for example, real estate and private equity RIAIFs and QIAIFs (see Section VI.iv) and loan origination QIAIFs (LO-QIAIFS), the latter representing the first dedicated regulatory regime in the EU for loan origination funds. AIFMs that meet the additional conditions relating to LO-QIAIFs are able to manage the LO-QIAIF and market it within the EU using the AIFMD passport.

iv Private equity and real property

As stated above, the AIF Rulebook specifically provides for the establishment of real estate and private equity RIAIFs and QIAIFs.

A key element in the development of private equity funds and real estate funds as QIAIFs has been the use of special purpose vehicles, one of the benefits of which is enhanced access to Ireland's extensive double taxation treaty network. QIAIFs are permitted to establish multilayered special purpose vehicles, typically wholly owned subsidiaries established pursuant to Section 110 of the Taxes Consolidation Act 1997. The Section 110 subsidiary can, therefore, be used as the investment vehicle for the QIAIF, provides access to Ireland's double taxation treaty network. The recent enhancements of the regulated ILP structure should now also offer an attractive alternative for managers seeking to implement private equity, venture capital and real property strategies.

Real estate investment trusts (REITs) were established in Ireland in recent years. Irish REITs must be incorporated under the Irish Companies Act 2014, be resident in Ireland, have their shares listed on the main market of a recognised stock exchange, and meet a number of conditions and restrictions in terms of borrowing, permitted investments, sources of income and risk spreading. Although the Central Bank has not determined that all REITs established in Ireland are AIFs for the purpose of the AIFMD, it has indicated that the onus would be on a REIT to demonstrate otherwise. Furthermore, it has advised that REITs that are structured as unauthorised AIFs must comply with the Central Bank AIF Rulebook for retail AIFs.

v Recent developments – funds and private equity

Developments in relation to sustainable finance – Level 1 and Level 2 Compliance

With the aim of furthering sustainable finance and environmental, social and governance (ESG) integration, the European Commission (the Commission) introduced a package of legislative measures in 2018 that includes three key regulations: the Taxonomy Regulation, the Disclosures Regulation and the Low Carbon and Positive Impacts Benchmarks Regulation. The Disclosures Regulation came into effect on the 10 March 2021 (SFDR Level 1) that required all financial market participants (FMPs), including AIFMs, UCITS management companies and self-managed UCITS, to consider sustainability from a number of perspectives and to: (1) publish information on their websites regarding their policies on the integration of sustainability risks in their investment decision-making process; (2) make pre-contractual disclosures on how they incorporate sustainability risks in their business; and (3) comply with pre-contractual transparency rules on sustainable investments.

The high-level principles based requirements contained in SFDR Level 1 are supplemented by more detailed Level 2 requirements (SFDR RTS). SFDR RTS requires FMPs to comply with more detailed pre-contractual disclosures and annual reporting disclosures. FMPs must make these disclosures in the mandatory templates that are set out in the annexes to the SFDR RTS for relevant products. In addition, certain Taxonomy Regulation-related disclosures will apply to those products and funds that are categorised as 'Articles 8' or 'Article 9' under the Disclosures Regulation. This subset of Article 8 and Article 9 funds will be subject to additional disclosure requirements regarding the alignment of their investments with the Taxonomy Regulation. Further, the Taxonomy Regulations require that 'Article 6' funds include a negative statement in their offering documents and annual reports that underlying investments do not take into account the EU criteria for environmentally sustainable economic activities.

To ensure there is a single rulebook for sustainability disclosures, the European Supervisory Authorities determined that the additional taxonomy-related requirements should be incorporated into the SFDR RTS. It had been intended that these requirements would become effective as of 1 January 2022. However, the Commission confirmed in July 2021 that because of the level of detail, length and nature of the new regulatory technical standards for SFDR RTS and the Taxonomy Regulation and the need for a smooth implementation of the new standards, the standards will be addressed in one single delegated act and the implementation date is delayed from 1 January 2022 to 1 July 2022. This is welcome breathing space for many FMPs coming to grips with these new and detailed requirements.

New Cross-Border Distribution Framework

The EU Cross-Border Distribution Framework17 (the Framework) introduces a new framework for the cross-border distribution of UCITS and AIFs. The majority of the most significant changes are expected to apply under local member state law from 2 August 2021. Set out below is a summary of some of the key changes.

New pre-marketing regime

The Framework introduces a new concept of 'pre-marketing' and the conditions for its use by EU-authorised AIFMs. Importantly, the pre-marketing regime does not apply to UCITS, registered or sub-threshold AIFMs or non-EU AIFMs. It remains to be seen whether individual EU Member States will amend their national regimes to bring them in line with the provisions applicable to EU AIFMs. The key features of pre-marketing comprise the following elements: (1) provision of information or communication, direct or indirect, on investment strategies or investment ideas; (2) by an EU AIFM or on its behalf (e.g., a distributor or placement agent); (3) and in order to test their interest in an AIF, which is not yet established or is established but not yet notified for marketing under AIFMD in the relevant member state that does not amount to an offer to invest in the relevant AIF. Pre-marketing will not be permitted where the information provided enables investors to commit to acquiring an interest in the AIF, comprises subscription documents (in either draft or final form) or comprises constitutional documents or offering documents of a not-yet-established AIF (in final form). Draft offering documents will need to include a disclaimer that they do not constitute an offer or invitation to subscribe for an interest in the AIF and that the information presented should not be relied upon because it is incomplete and may be subject to change.

The pre-marketing regime should introduce a level of consistency across the European Union in respect of acceptable activities prior to formal marketing commencing. However, it will have a very real effect on the ability of EU AIFMs to rely on reverse solicitation. The framework provides that any subscription by a professional investor in an AIF, which occurs within 18 months after the pre-marketing activities for that AIF, shall be considered to be the result of marketing and shall be subject to the AIFMD marketing notification and passporting procedure. The consequence of this is that an EU AIFM will not be able to rely on reverse solicitation for a period of 18 months after conducting pre-marketing activities. Accordingly, managers will need to take a cautious approach on this point and will need to ensure that their process around reverse solicitation is sufficiently robust and adequately documented in light of the new framework.

Marketing communications

The Framework also introduces harmonised standards for marketing communications for UCITS and AIFs. The Framework permits regulators to require prior notification to them of marketing communications for UCITS, and AIFs that are marketed to retail investors, but this requirement will not be a precondition to them obtaining marketing permissions or passports under the UCITS Directive and AIFMD. If the regulators require any amendments to the marketing communications they must inform the fund management company of any such requests within 10 business days of its submission.

ESMA issued its final guidelines (the Guidelines) on the harmonised standards on 27 May 2021 and published the official translations of the Guidelines on 2 August 2021.The Guidelines are effective six months following the publication of the official translations and so take effect from 2 February 2022. The publication of the translations also triggers a two-month notification period within which national competent authorities must notify ESMA whether they will comply, or explain why they will not comply, with the Guidelines.

Local facilities

The Framework imposes less onerous requirements in respect of the maintenance of local facilities in host Member States. This is intended to reduce differing practices and requirements in EU Member States in respect of facilities agents, paying agents and similar service providers. These rules will apply to all UCITS management companies marketing UCITS and all AIFMs (EU or non-EU) marketing AIFs (EU or non-EU) to retail investors. There is no requirement that UCITS management companies or AIFMs have a physical presence in the host member state and so such facilities may now be provided through the use of electronic means. Facilities may be provided by the UCITS management company or AIFM itself or by certain third parties that are subject to regulation in respect of the tasks that they perform, or both. Assuming that member states faithfully implement the framework, it should allow management companies additional flexibility in terms of how they provide such local facilities without having a physical presence in the host member state.

Other developments

During the covid-19 pandemic liquidity gripped the focus of the funds industry across the European Union. Liquidity risk management became a key supervisory priority in 2020 and into 2021 for ESMA and national regulators in the European Union and continues to remain a focus. Refer to the ninth edition of this publication for discussion on liquidity risk management.

Similarly, the last number of years have seen increased regulatory focus on costs and fees charged by fund managers. In its Work Programme for 2021, ESMA flagged that a Common Supervisory Action (CSA) involving regulators across EU Member States on costs and fees would be implemented this year, noting that this CSA is expected to 'represent a major area of focus to increase convergence in the supervision of costs in UCITS and AIFs, including securities lending fees and costs'. As part of the CSA, the Central Bank issued questionnaires to a number of UCITS management companies and self-managed UCITS seeking quantitative and qualitative information relating to fees and costs (the CSA Questionnaire). It is expected that the Central Bank will issue further guidance on the foot of its review of the response to the CSA Questionnaire and that ESMA will publish its general findings from the CSA in early 2022.

Tax law

i Irish investment undertakings and non-Irish resident investors

Where an Irish authorised fund qualifies as an investment undertaking for Irish tax purposes, it is generally not chargeable to Irish tax on its income and gains.18 However, the fund may be required to account for Irish tax (known as investment undertaking tax or exit tax) on the occurrence of a chargeable event in respect of its investors. In practice, this charge is limited to payments in respect of certain Irish-resident taxable investors. Separate rules apply to Irish real estate funds (IREFs) (see Section VII).

A chargeable event includes payments of any form made by a fund to an investor and the transfer or sale of units in a fund. An investor is also deemed for Irish tax purposes to dispose of its holding in an Irish fund every eight years (deemed a chargeable event), giving rise to a rolling eight-year tax charge until such time as the holding is disposed of. If the fund becomes liable to account for exit tax on a chargeable event, it is entitled to deduct an amount equal to the appropriate tax (currently 41 per cent) from the relevant payment and, where applicable, to repurchase and cancel such number of units held by the investor as is required to satisfy the amount of tax. Importantly, however, no Irish tax arises in respect of a chargeable event where the investor is neither resident nor ordinarily resident in Ireland, or an exempt Irish resident such as another Irish authorised fund, a Section 110 company, a pension fund or a charity. In each case, the fund must be in possession of an appropriate declaration confirming the status of the investor, although the requirement for declarations in respect of non-resident investors may be relaxed on application by a fund to the Irish Revenue where certain conditions are met.

Non-Irish resident investors are thus generally not liable to Irish exit tax by deduction by the fund or on assessment in respect of their investment in Irish authorised funds. The one exception is where a non-resident investor has a branch or agency in Ireland, and invests in an Irish fund through or in connection with the branch or agency. Although no Irish tax will be accounted for by the fund, the investor will be liable to Irish corporation tax in respect of income and capital distributions it receives from the fund.

ii Investment limited partnerships

As outlined above, recent legislative changes have been made to enhance the regime for investment limited partnerships. These vehicles are transparent for Irish tax purposes, consistent with the tax treatment of investment limited partnerships internationally.

iii CCFs

A separate regime applies to Irish authorised CCFs, being funds that permit pension assets to be pooled in a tax-transparent structure.19 A CCF is treated as tax-transparent for Irish tax purposes provided the unitholders are institutional investors and certain reporting requirements are met. As a consequence, a CCF can facilitate pooling while ensuring that the double taxation treaty benefits normally enjoyed by pension funds are not affected by investing through a CCF.

iv Taxation of investment managers

An Irish resident investment manager would normally be taxed on its trading profits at the corporation tax trading rate of 12.5 per cent. Ireland's low corporation tax rate on trading profits compares favourably with corporation tax rates in other EU and OECD countries. Management services provided by an investment manager to an authorised fund are generally exempt from VAT. In addition, the use of an Irish investment manager by a foreign UCITS will not of itself bring the foreign UCITS within the charge to Irish tax where certain conditions are met.20

v Private equity

Private equity investors that choose not to invest through an Irish authorised fund could invest through a standard Irish company, in which case profits would be taxed at either 12.5 or 25 per cent. Tax-neutrality at the entity level could be achieved, if appropriately structured, by the use of a company qualifying for the Irish Section 110 regime, or a tax-transparent partnership or limited partnership, to invest.

vi REITs

REITs offer a modern collective ownership structure for Irish and international investors in real property. Provided that various conditions as to diversification, leverage restrictions and income distributions are met, an Irish REIT is exempt from Irish corporation tax on income and gains arising from its property rental business. Investors in a REIT are liable to Irish tax on distributions from the REIT. In the case of non-Irish resident investors, income distributions from the REIT are subject to dividend withholding tax (currently 20 per cent), although certain non-residents may be entitled to recover some of the tax withheld or otherwise should be entitled to claim credit against taxes in their home jurisdictions. Non-resident pension funds may also be eligible for exemption.

vii IREFs

Since 2017 a new tax regime applies to regulated funds that invest in Irish real estate and related assets. Where a regulated fund derives at least 25 per cent of its value from assets that are Irish real estate, shares in unquoted real estate companies, Irish REITs and certain debt securities issued by Irish securitisation companies, then the fund will be considered to be an IREF. An IREF may be required to impose a 20 per cent withholding tax on a percentage of the amount paid on events such as the making of a distribution to investors or the redemption of its units. There are certain classes of investors that are exempt from the withholding tax, primarily Irish-taxable investors.

There are also specific rules, introduced in 2019, that can give rise to an income tax charge for an IREF that has shareholder debt and whose debt and finance costs exceed certain thresholds. The exact impact of the new rules may be different for each IREF, depending on its finance costs, property costs and other factors.

viii Other

The introduction the ICAV was a welcome development in expanding the attractiveness of Ireland's authorised fund offering. Unlike the preceding Irish corporate regulated fund, the variable capital investment company, the ICAV as a private limited company allows US-taxable investors to treat the fund as a 'check-the-box' vehicle for US tax purposes. In so doing, the ICAV may avoid certain adverse tax consequences for US-taxable investors who invest in structures that may be deemed as a passive foreign investment company for US federal income tax purposes.

Ireland was one of the first countries to enter into an intergovernmental agreement (IGA) with the United States with respect to the Foreign Account Tax Compliance Act (FATCA) provisions of the US Hiring Incentives to Restore Employment Act 2010 in December 2012. Under the IGA, FATCA compliance is enforced under Irish tax legislation, including the Financial Accounts Reporting (United States of America) Regulations 2014, and reporting rules and practices. Subject to certain exceptions, Irish authorised funds are generally reporting financial institutions for FATCA purposes, and are subject to FATCA due diligence and reporting requirements. Irish financial institutions that are within its scope are required to register and obtain a global intermediary identification number to avoid a 30 per cent withholding on their US-sourced income and proceeds from the sale of certain US income-producing assets. The Irish Revenue Commissioners receive similar information from the Internal Revenue Service regarding Irish taxpayers. Ireland has also adopted the common reporting standard (CRS), which is the new global standard on the automatic exchange of information designed to combat tax evasion. The CRS regime requires certain investment entities (including Irish investment funds) to report certain information relating to investors to their local tax authority.

Outlook

Notwithstanding the impact and challenges created by the covid-19, the Irish financial services sector has continued to provide market-leading solutions for its international client base while demonstrating operational resilience, robust IT infrastructure and ability to adapt work practices. International confidence in Ireland as a market-leading financial services hub has been clearly demonstrated by significant increases in total assets in the Irish funds sector as well as the continued growth in asset managers establishing management companies in Ireland. The industry's commitment to development and innovation is also demonstrated by enhancements to the ILP structure.

As such, there are reasons to be very optimistic about the continued development of the Irish financial services sector. This is underpinned by Irish Funds, the industry body for the Irish funds sector, forecasts for the coming years. Irish Funds anticipate the level of international assets in Irish-domiciled funds to top €5 trillion by 2025, with the number of people directly employed in the industry, across asset management, depositaries, administrators, professional advisers, transfer agents and other specialist firms, set to increase by 25 per cent to over 20,000.

With the continued support of the Irish government for the financial services sector, Ireland can continue to remain optimistic with regard to the continued development of the sector.

Footnotes

1 Kevin Murphy, Robert Cain and David Kilty are partners, David O'Shea and Michael Shovlin are of counsel and Niall Guinan is an associate at Arthur Cox.

2 Established under the Pensions Act 1990 (as amended).

3 The UCITS Regulations implement the UCITS Directive in Ireland.

4 The AIFM Regulations implement the Alternative Investment Fund Managers Directive in Ireland.

5 For further information on this point, see Section VII.vii.

6 Companies (Amendment) Act 1982 (Section 13(2)) Order 2004.

7 Regulation (EU) 2017/1129 of the European Parliament and the Council of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and Repealing. Directive 2003/71/EC.

8 Directive 2004/109/EC of the European Parliament and of the Council of 15 December 2004 on the harmonisation of transparency requirements in relation to information about issuers whose securities are admitted to trading on a regulated market and amending Directive 2001/34/EC, as amended by Directive 2013/50/EU.

9 Directive 2004/25/EC of the European Parliament and of the Council of 21 April 2004 on takeover bids.

10 Central Bank of Ireland industry Registers.

11 Central Bank of Ireland Insurance Corporations Statistics, Q1 2021.

12 Regulation (EU) No. 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories.

13 Directive 2001/108/EC of the European Parliament and of the Council of 21 January 2002 amending Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to UCITS, with regard to investment in UCITS.

14 Commission Directive 2007/110/EC of 19 March 2007 implementing Council Directive 85/611/EEC on the coordination of laws, regulations and administrative provisions relating to UCITS as regards clarification of certain definitions.

15 AIF Rulebook (March 2018).

16 The AIFMD is the European legislation that governs managers of AIFs (AIFMs), and in the first instance requires that all AIFMs be appropriately authorised to manage AIFs that are established or marketed in the EU.

17 The Framework comprises Regulation (EU) 2019/1156 and Directive 2019/1160/EU.

18 Section 739B of the Taxes Consolidation Act 1997 (TCA) applying in respect of Irish authorised funds established on or after 1 April 2000, and certain pre-31 March 2000 International Financial Services Centre funds.

19 Section 739I of the TCA.

20 Section 1035A of the TCA.

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