Fund Administrators – Outsourcing of Investment Fund Administration Activities

  1. The Central Bank’s requirements on outsourcing of administration activities in relation to investment funds incorporate and are consistent with the rules on outsourcing contained in MiFID Directive 2004/39/EC and MiFID implementing Directive 2006/73/EC and with the Committee of European Banking Supervisors (“CEBS”) Guidelines on Outsourcing published on 14 December 2006.
  2. Fund administrators are authorised and supervised by the Central Bank under the Investment Intermediaries Act 1995. These firms are appointed by management companies and boards of directors of Irish authorised and non-Irish investment funds who retain responsibility for the delegated functions and who must ensure that the regulatory requirements applicable to the functions are complied with on an on-going basis.
  3. The purpose of these requirements is to promote greater consistency of approach and certainty in relation to the principles applied by the Central Bank in relation to outsourcing by fund administrators of services provided to investment funds.
  4. In the event that the fund administrator does not comply with any of these requirements, the Central Bank may require the outsourcing arrangement to be terminated and the fund administrator may face administrative sanction.
  5. The Central Bank may impose, at its discretion, specific conditions on the outsourcing activities, in addition to these requirements. In doing so, the Central Bank will consider factors such as the size of the fund administrator and its compliance history, the nature of the outsourced activity, the characteristics and market position of the outsourcing service provider, the duration of the contract and the potential for the outsourcing arrangement to generate conflicts of interest.
  6. The fund administrator must ensure that the Central Bank can obtain detailed information about any outsourcing processes which might undermine the stability of the consolidated group.

Issued: 3 July 2013
Latest revision: 3 July 2013