Central Bank will consult later this year on its proposal to update its AIF Rulebook to facilitate implementation of the ELTIF 2.0 Regulation.
This is timely ahead of the enhancements under the ELTIF 2.0 Regulation taking effect on 10 January 2024. ELTIFs, especially following the package of reforms and with the maturing trends in the retailisation of private funds, are primed as the “go-to” product option for distributing private market/real asset strategies to retail investors. Notably, the ELTIF product label comes with the unique advantage of an EU-wide product passport extending to retail investors (versus the more limited professional client only passport under AIFMD).
The Central Bank has indicated that it is proposing to publish a dedicated ELTIF chapter in its AIF Rulebook. ELTIFs will be a discrete AIF product type separate to Ireland’s qualifying investor AIF (QIAIF) and retail investor AIF (RIAIF) product options. It has also been indicated that the authorisation process for an ELTIF will broadly follow the existing authorisation processes for QIAIFs and RIAIFs. This is a welcome development and paves the way for Irish domiciled ELTIFs to be authorised using the full suite of Irish dedicated fund legal structures, such as the ICAV and Investment Limited Partnership. The AIF Rulebook amendments will remove the principal impediments which fund sponsors encountered in launching ELTIF products in Ireland.
Later this year (most likely in October), the Central Bank will engage with industry by launching a public consultation on the ELTIF-related changes proposed for the AIF Rulebook. It is expected that the consultation period will be an abridged one (with an indication of approximately 4-6 weeks). This consultation will not focus on the product level rules since it is appreciated that these matters are comprehensively dealt with by the ELTIF 2.0 Regulation. We expect therefore, in line with the maximum harmonisation nature of the ELTIF 2.0 Regulation, that there should be no gold plating. Rather, the Central Bank has indicated the proposed ELTIF chapter will complement the ELTIF 2.0 Regulation. The other updates for the AIF Rulebook are expected to focus on supervisory and operational matters, such as expected disclosures and regulatory reporting. The expectation is that the revisions to the AIF Rulebook should be in place in advance of 10 January 2024.
For more details, please contact John Aherne, Niall Crowley or your usual William Fry contact.
