Ireland’s private equity regulator, the Central Bank, has released a draft “AIF rulebook” that consolidates its current fund regime with rules required by the Alternative Investment Fund Managers directive (AIFM).
The main change to the regime, as outlined by Matthew Elderfield the Central Bank’s deputy governor in September, was removing the promoter requirement from Qualified Investment Funds (QIFs) – Ireland’s most popular private equity fund structure.
Currently the Central Bank requires promoters to maintain a level of capital that is typically higher than is required by the promoter’s own regulator despite the fact that the promoter does not have any contractual obligation to the fund.
This was designed to give funds a regulated entity that would take moral responsibility but as all private equity funds under the AIFM will be managed by regulated managers this additional layer of regulation is no longer necessary.
In the “rulebook” the QIF regime is replaced by the Qualifying Investor Alternative Investment Fund (QIAIF) regime. This is largely the same as the QIF but with fewer disclosure requirements in certain areas and fewer requirements in dealing frequencies, counter-party eligibility, issuance of partly paid units and duration of closed funds.
The public consultation period for the “rulebook” will last six weeks and the Central Bank will issue a response early in the New Year, setting out the Central Bank’s stance on the policy issues raised in the consultation.
A finalised rulebook will be issued following a technical review in time for the AIFM’s 22 July go-live date.