Ireland: Central Bank Publishes Revised Central Bank UCITS Regulations 2019

Last Updated: 14 June 2019
Article by Shane Coveney
Most Read Contributor in Ireland, September 2019


Further to the consultation process initiated by it last year, the Central Bank has now published its Revised CBI UCITS Regulations which set down its domestic rules governing the operation of Irish domiciled UCITS and UCITS management companies and impose certain obligations on Irish domiciled depositaries. The Revised CBI UCITS Regulations consolidates amendments made by two previous amending regulations to the CBI UCITS Regulations. In addition, the Central Bank helpfully published a feedback statementon its consultation process as well as a revised edition of its CBI UCITS Q&A which provides additional clarity on a number of the provisions of the Revised CBI UCITS Regulations.

Notably, a number of provisions which were previously set out by the Central Bank in web-based guidance or otherwise have now been incorporated into the Revised CBI UCITS Regulations, the impact of which is that the Central Bank is now empowered to bring enforcement actions for non-compliance.

Below we outline some of the key changes being introduced under the Revised CBI UCITS Regulations.

Performance fees

The Central Bank has incorporated its previous web-based guidance on performance fees into the Revised CBI UCITS Regulations, noting that in so doing, it is provided with a "firmer statutory footing on which to take action against firms for breaches of performance fees requirements in the future"1 . This follows on from a thematic review which was conducted by the Central Bank in the past year on UCITS performance fees, reflecting the importance the Central Bank is placing on transparency of fees in the investment funds sector.

The Revised CBI UCITS Regulations now provide statutory provisions which mandate that performance fees payable to management companies or investment managers may only be paid on outperformance of a benchmark or if a new high NAV is achieved over the life of the UCITS. One change introduced by the Central Bank which marks a departure from its previous guidance (and which emanates from an IOSCO paper published in 2016)2 is the requirement that performance fees may only crystallise once a year and may only be paid once a year. Helpfully, the Central Bank has confirmed in its UCITS Q&A that performance fees may crystallise upon an investor redemption and will not offend the statutory provisions. While the remainder of the rules relating to performance fees must be complied with immediately, the Central Bank has allowed UCITS management companies with existing UCITS investment funds a transitional period until 27 November 2020 to adjust their methodologies to comply with the annual crystallisation requirement.

Following on from a number of submissions from industry, the Central Bank has also confirmed in its UCITS Q&A that the performance fee rules set down in the Revised CBI UCITS Regulations do not preclude performance fees from being charged at a share class/fund level, as adjusted for subscriptions and redemptions.

While the Revised CBI UCITS Regulations have been issued prior to ESMA finalising its guidance on UCITS performance fees, it is expected that the Central Bank has sought to ensure that its rules are consistent with any such guidance once issued by ESMA which is expected to be later this year.

ESMA Opinion on UCITS Share Classes

As readers will be aware, the Central Bank had previously incorporated the ESMA Opinion on UCITS Share Classes3 into the Irish domestic regime in the form of web-based guidance. However this web-based guidance has now been incorporated into the Revised CBI UCITS Regulations and placed on a statutory footing.

In the Revised CBI UCITS Regulations, the Central Bank has given flexibility as to the type of stress testing which can be conducted by UCITS management companies to quantify the potential impact of share class hedging on other classes within the same UCITS. Marking a departure from the original text proposed under CP119, it also stays faithful to the text of the ESMA Opinion on UCITS Share Classes to allow UCITS to hedge 95% of the portion of the net asset value of the share class which is to be hedged against currency risk.

Other changes

(i) EU Money Market Funds

The Revised CBI UCITS Regulations have been updated to incorporate a number of amendments arising from the implementation of the EU Money Market Fund Regulation, including the disapplication of certain provisions to Irish domiciled money market funds in order to remove any overlap with the MMFR.

(ii) Cash held as ancillary liquidity

To date, the Central Bank imposed different risk spreading rules to UCITS depending on whether a UCITS held cash for investment purposes or ancillary liquidity purposes. Under the Revised CBI UCITS Regulations, when applying the limits on exposure to any one credit institution, UCITS must now aggregate deposits and cash held as ancillary liquidity. This reflects the practice that cash held on deposit with credit institutions is not typically distinguished between cash held for investment purposes and cash held for liquidity management purposes.

(iii) Reporting requirements applicable to UCITS management companies and depositaries

The Revised CBI UCITS Regulations require UCITS management companies and depositaries to file a second set of accounts with the Central Bank which covers the full 12 months of the financial year. This obligation has been imposed on UCITS management companies since December 2016 and had previously provided for a two month filing period. However the Central Bank has reduced the filing period from two months to one month after the year end in the Revised CBI UCITS Regulations. While industry had pushed to retain the existing two-month filing period, the Central Bank noted that the rationale for the shortened filing period is to enable supervisors to obtain information in a "timely manner" so that they can take any necessary supervisory action arising from their review of the accounts filed.

Other existing rules which have been now been codified in the Revised Central Bank UCITS Regulations include the ability of a structured UCITS to be subject to a management fee which is calculated based on the initial offer price rather than being based on the Net Asset Value of the relevant class and the requirement introduced under CP86 that all UCITS maintain an email address for correspondence with the Central Bank which is monitored daily.



2. IOSCO's paper entitled "Good Practice For Fees and Expenses of Collective Investment Schemes is accessible from

3. ESMA34-43-296 – Opinion to National Competent Authorities on UCITS Share Class Hedging

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions