Undertakings for Collective Investment in Transferable Securities or ‘UCITS’ is a European Union regime for retail investment funds and their fund management companies. It first came into being via a European Directive in 1985 and has gone through several iterations since - we are now up to UCITS V.
Ireland has a very well established and developed regime for the regulation, authorisation and supervision of UCITS funds and UCITS management companies. Taken together, the rules, regulation and legislation applicable to UCITS in Ireland forms the Irish UCITS rulebook. However, the Irish UCITS rulebook is not one document that is located in one place. Instead it is a collection of documents located across several different resources.
What rules and guidance make up the
irish UCITS Rulebook?
Being a European Directive, the UCITS Directive law does not have direct effect in Ireland. Instead, in order to be included in the Irish statute book, a European directive has to be transposed into Irish law. This was done through Statutory Instrument which is secondary legislation. So, in Ireland, the UCITS Directive is implement by the Irish UCITS Regulations.
The Irish UCITS Regulations transpose the UCITS IV Directive into Irish law. This has subsequently been amended on a number of occasions, most notably by the UCITS V Directive. The amending Irish statutory instruments/regulations need to be read together with the primary Irish UCITS Regulations in order to understand the current rules applicable to UCITS funds, UCITS management companies and UCITS depositaries in Ireland.
The Aquest Linked Rulebooks contains a consolidated version of the Irish UCITS Regulations which consolidates subsequent amendments into the primary Irish UCITS Regulations.
The UCITS Directive is supplemented by a number of supporting European Directives and Regulations. These are known as ‘Level 2’ and provide more detail to the principles set out in the Level 1 UCITS Directive. Where these Level 2 measures are set out in European Directives, they need to be transposed into Irish law - just like the Level 1 UCITS Directive. Currently, these Level 2 UCITS Directives are consolidated into the Irish UCITS Regulations.
Some of the Level 2 UCITS rules are set out in European Regulations which have direct effect in Irish law. This means that they apply in Ireland without needing to be transposed into Irish law. For example, there are Level 2 UCITS Regulations on the Key Investor Information Document and the Obligations of Depositaries. These form part of Irish law - even though you will find them in EUR-Lex rather than the Irish Statute Book.
At European Level, there is a bespoke legislation designed specifically for EU money market funds. The EU Money Market Fund regulations apply to all money market funds domiciled, marketed or managed in the European Union. As these rules are set out in EU regulations, they have direct effect in Ireland and so are part of the Irish UCITS rulebook.
Although the UCITS Directive is a harmonised regime for retail funds at European level, it is not a maximum harmonisation regime. This means that there is scope for national competent authorities, such as the Central Bank of Ireland, to apply additional rules in areas not governed by the UCITS Directive. In Ireland, the Central Bank’s additional rules are set out in the Central Bank UCITS Regulations.
The Central Bank UCITS Regulations do not repeat rules or regulations set out in other legislation nor do they contain guidance. The Central Bank UCITS Regulations are stand alone UCITS rules but must be read in conjunction with the Irish UCITS Regulations. The fact that these two documents must be read together to understand the Irish UCITS rulebooks is part of what makes the Irish UCITS rulebook so difficult to navigate.
The Central Bank has issued guidance on a number of UCITS topics to help UCITS funds, UCITS management companies, UCITS depositaries and their advisors to understand the Central Bank’s expectations. This Central Bank guidance forms an important part of the Irish UCITS Rulebook. While the Central Bank’s guidance is not necessarily enforceable in and of itself, it does indicate to UCITS funds, UCITS management companies and UCITS depositaries how the Central Bank expects them to comply with the UCITS rules.
The Central Bank is committed to being transparent and open in the way that it works. This includes being transparent regarding how it answers questions it has been asked. As a result, instead of answering individual questions privately, the Central Bank publishes UCITS Q&As so that all stakeholders are aware of the Central Bank’s views on a matter.
The Central Bank UCITS Q&A document is updated on a periodic basis as and when new Q&As are added. It is a useful source of guidance and the Central Bank will expect that firms are aware of the Central Bank UCITS Q&A’s contents before engaging with it.
The Central Bank UCITS Q&A contains over 100 Q&As, most of which are directly referable to a specific provision of the Irish UCITS Regulations, the Central Bank UCITS Regulations or Irish investment fund legislation.
Aquest Linked Rulebooks
The Aquest Linked Irish UCITS Rulebook brings together in one location all UCITS rules and UCITS guidance specific to the Irish UCITS funds, UCITS management companies and UCITS depositaries. The Aquest Linked Irish UCITS Rulebook includes individual documents ranging from legislation to guidance and Q&As which have been seamlessly and comprehensively linked so that you can navigate easily from a rule to supplementary rules, guidance and Q&As or vice versa.
The Irish UCITS Rulebook has also been linked to the European UCITS Rulebook so that users can easily identify, for example, how a European rule has been transposed into Irish law or whether there is any European guidance relevant to a rule as it applies in Ireland.