IRELAND: CBI Updates AIFMD Q&A

Friday April 2 2021

On 1^st April 2021, the Central Bank of Ireland (CBI) issued the 38^th edition of the Central Bank AIFMD Q&A, which includes two new Q&A’s, ID 1141 and ID 1142.

The Q&A [ID 1141] relates to raising capital from investors by way of a shareholder (unitholder) loan. The AIF Rulebook does not envisage or specifically permit arrangements which involve loans between an authorised AIF and its members (investors). Such arrangements would not appear to be consistent with the objective of collective investment on behalf of an authorised AIF’s members. The Central Bank may revisit this matter during future public consultations related to the Central Bank’s AIF Rulebook (and their subsequent conversion into regulations).

The Q&A [ID 1142] relates to whether an authorised AIF can enter into transactions with its investors. Except as where expressly set out in relevant legislation, there appears to be no particular prohibition in the legislation or the AIF Rulebook to prevent an authorised AIF from entering into transactions with investors. However, the AIF Rulebook does not envisage that such transactions would take place. ID 1142 sets out the Central Bank’s expectations in this regard. The Central Bank may also revisit this matter during future public consultations related to the Central Bank’s AIF Rulebook.

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