CP152 - Own funds requirements for UCITS ManCos and AIFMs authorised for discretionary portfolio management
Overview
Description
The current own funds
requirements for UCITS Management Companies and AIFMs are set out in Regulation
17 of S.I. No. 352 of 2011 (the UCITS Regulations) and Regulation 10 of the
S.I. No 257 of 2013 (the AIFM Regulations), respectively. Under these
regulations the level of own funds required to be held by such firms is directly proportional to the level of collective
assets held.
UCITS ManCos and AIFMs may be authorised
under Regulation 16(2) of the UCITS Regulations and Regulation 7(4) of the AIFM
Regulations, respectively, to provide discretionary portfolio management
services and additional non-core services.
However UCITS ManCos and AIFMs are not subject to own funds requirements
at EU level related to the provision of such services.
Therefore, in the interest of
maintaining a level playing field with investment firms authorised to provide
discretionary portfolio management services under S.I. No. 375 of 2017 (MiFID)
and subject to own funds requirements under Regulation (EU) 2019/2033 (IFR),
the Central Bank is proposing to introduce bespoke own funds requirements for
UCITS Management companies and AIFMs authorised to provide discretionary
portfolio management and additional non-core services via Central Bank
regulations and a condition of authorisation.
UCITS ManCos and AIFMs authorised
to provide discretionary portfolio management services and non-core services
that do not meet conditions to be a “small and non-interconnected firm”
(modelled on similar conditions under the IFR) will be required to apply the
higher of the own funds requirement under the UCITS Regulations/AIFM
Regulations as applicable, or, a Risk to Client K-factor own fund
requirement modelled on the Risk to Client K-Factor applicable to MiFID
investment firms under the IFR.
UCITS
ManCos and AIFMs authorised to provide discretionary portfolio management
services will continue to be required to undertake an ICAAP in line with a
similar requirement applicable to all MiFID investment firms.
CP Number :
CP152
Date :
01 December 2022
Closing Date :
23 February 2023
Consultation Paper Document
CP152 - Own funds requirements for UCITS ManCos and AIFMs providing discretionary portfolio management services | pdf 512 KB
Feedback Statement
Feedback Statement to CP152 - Own Funds Requirements for UCITS Management Companies and AIFMs authorised for discretionary portfolio management | pdf 462 KB
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