IE
S.I. No. 352/2011 - European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011.
Table of Provisions (139)
Statutory Text (139 Articles)
1. An investment company and, for each of the unit trusts and common contractual funds it manages, a management company, shall publish a simplified prospectus which must be dated and its essential elements kept up to date.
2. The simplified prospectus shall contain in summary form the key information provided for in paragraph 11. It shall be structured and written in such a way that it can be easily understood by the average investor.
3. The Bank may permit that the simplified prospectus be attached to the prospectus as a removable part of it.
4. The simplified prospectus can be used as a marketing tool designed to be used in all Member States without alterations except translation. The Bank may therefore not require any further documents or additional information to be added.
5. The simplified prospectus may be incorporated in a document in writing, or in any durable medium having an equivalent legal status approved by the Bank.
6. A UCITS shall send its simplified prospectus and any amendments thereto to the Bank.
7. The simplified prospectus shall be offered to subscribers free of charge before the conclusion of the contract concerned.
8. The annual and half-yearly reports shall be available to the public and the places, or through other means approved by the Bank, specified in the simplified prospectus.
9. A UCITS situated in another Member State shall send to the Bank its simplified prospectus including any amendments thereto.
10. Where a UCITS markets its units in another Member State, it shall distribute its simplified prospectus in that other Member State, in accordance with the same procedures as those provided for by the Bank.
11. The simplified prospectus shall contain
Brief presentation of the UCITS
— when the unit trust, common contractual fund or the investment company was created and indication of the Member State where the unit trust, common contractual fund or the investment company has been registered/incorporated,
— in the case of UCITS having different investment compartments, the indication of this circumstance,
— management company (when applicable),
— expected period of existence (when applicable),
— trustee,
— auditors,
— financial group (e.g. a bank) promoting the UCITS.
Investment information
— short definition of the UCITS objectives,
— the unit trust’s, common contractual fund’s or the investment company’s investment policy and a brief assessment of the fund’s risk profile (including, if applicable, information according to Regulations 57 and 72 of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2003 (
S.I. No. 211 of 2003
) revoked by Regulation 139(1) and by investment compartment),
— historical performance of the unit trust, common contractual fund or investment company (where applicable) and a warning that this is not an indictor of future performance — such information may be included in or attached to the prospectus,
— profile of the typical investor that the unit trust, common contractual fund or the investment company is designed for.
Economic information
— tax regime,
— entry and exit commissions,
— other possible expenses or fees, distinguishing between those to be paid by the unit-holder and those to be paid out of the unit trust’s common contractual fund’s or the investment company’s assets.
Commercial information
— how to buy the units,
— how to sell the units,
— in the case of UCITS having different investment compartments, how to pass from one investment compartment into another and the charges applicable in such cases,
— when and how dividends on units or shares of the UCITS (if applicable) are distributed,
— frequency and where/how prices are published or made available.
Additional information
— statement that, on request, the full prospectus, the annual and half-yearly reports may be obtained free of charge before the conclusion of the contract and afterwards,
— competent authority,
— indication of a contact point (person/department, timing, etc.) where additional explanations may be obtained if needed,
— publishing date of the prospectus.
Regulation 139(2)
SCHEDULE 16
TABLE OF CROSS-REFERENCES TO SPECIFIC UCITS REGULATIONS IN LEGISLATION
PART 1
UNIT TRUSTS ACT 1990 (No. 37 of 1990)
Item
Section of Act
Subsection or Table of Section
2003 UCITS Regulations references
2011 UCITS Regulations references
1
15
1
63
104(2)
2
15
1
75 to 85
88(1)(b), 88(1)(c), 88(2), 89(3), 89(5), 91, 93, 94, 95(1), 95(3), 134
3
15
1
98 to 105
125, 126, 127, 128, 129, 130, 131, 135(2)
4
15
1
80
89(5)
5
15
1
Schedule 279 to 80
Schedule 1289(3) and 89(5)
6
15
1
105
135(2)
7
15
2
102
129
8
15
Table
14
17(11), 42(4)(d), 135(1)
9
15
Table
59
104(1)
PART 2
Companies Act 1990 (No. 33 of 1990)
Item
Section of Act
2003 UCITS Regulations references
2011 UCITS Regulations references
1
258
14
17(11), 42(4)(d), 135(1)
2
258
31
40(2)
3
258
63
104(2)
4
258
74(3)
N/A
5
258
85(2) to (9)
134(1) to (8)
6
258
98, 99, 100, 102 to 105
125, 126, 127, 129, 130, 131, 135(2)
PART 3
INVESTMENT FUNDS, COMPANIES AND MISCELLANEOUS PROVISIONS ACT 2005
(No. 12 of 2005)
Item
Section of Act
Subsection or Table of Section
2003 UCITS Regulations references
2011 UCITS Regulations references
1
18
1
63
104(2)
2
18
1
77 to 85
88(1)(b), 88(1)(c), 88(2), 89(3), 89(5), 93, 95(1), 95(3) and 134
3
18
1
98 to 105
125, 126, 127, 128, 129, 130, 131, 135(2)
4
18
Table
14
17(11), 42(4)(d), 135(1)
5
18
Table
59
104(1)
GIVEN under my Official Seal,
29 June 2011.
MICHAEL NOONAN,
Minister for Finance.
1 OJ No. L302, 17.11.2009, p. 32
2 OJ No. L176, 10.07.2010, p. 42
3 OJ No. L176, 10.07.2010, p. 28
4 OJ No. L193, 18.07.1983, p. 1
5 OJ No. L177, 30.06.2006, p. 1
6 OJ No. L176, 10.07.2010, p. 1
7 OJ No. L145. 30.04.2004, p. 1
8 OJ No. L177, 30.06.2011, p. 201
9 OJ No. L348, 17.12.1988, p. 62
10 OJ No. L390, 31.12.2004, p. 38
11 O.J. No. L 84, 26.03.1997, p. 22
12 OJ No. L157, 09.06.2007, p. 87
13 OJ No. L222, 14.08.1978, p. 11.
14 OJ No. L331, 15.12.2010, p. 84
15 OJ No. L 241, 02.09.2006, p. 26
16 OJ No. L96, 12.04.2003, p. 16
17 OJ No. L176, 10.07.2010, p. 16
12. The management company’s internal conduct of business rules referred to in Regulation 80(1)(
c
) shall include at least the following with regard to events affecting dealing arrangements
(
a
) the manner and timing of notification by either UCITS of the temporary suspension and the resumption of the repurchase, redemption or subscription of units of UCITS; and
(
b
) arrangements for notifying and resolving pricing errors in the master UCITS.
13. The management company’s internal conduct of business rules referred to in Regulation 80(1)(
c
) shall include at least the following with regard to standard arrangements for the audit report
(
a
) where the feeder UCITS and the master UCITS have the same accounting years, the coordination of the production of their periodic reports; and
(
b
) where the feeder UCITS and the master UCITS have different accounting years, arrangements for the feeder UCITS to obtain any necessary information from the master UCITS to enable it to produce its periodic reports on time and which ensure that the auditor of the master UCITS is in a position to make an ad hoc report on the closing date of the feeder UCITS in accordance with the first subparagraph of Regulation 80(2).
14. Where the feeder UCITS and the master UCITS have concluded an agreement in accordance with Regulation 80(1), the agreement between the trustees of the master UCITS and the feeder UCITS shall provide that the law of the Member State applying to that agreement in accordance with Regulation 65(1)(
b
) shall also apply to the information-sharing agreement between both trustees and that both trustees agree to the exclusive jurisdiction of the courts of that Member State;
15. Where the agreement between the feeder UCITS and the master UCITS has been replaced by internal conduct of business rules in accordance with Regulation 80(1)(
c
), the agreement between the trustees of the master UCITS and the feeder UCITS shall provide that the law applying to the information-sharing agreement between both trustees shall be either that of the Member State in which the feeder UCITS is established or, where different, that of the Member State in which the master UCITS is established, and that both trustees agree to the exclusive jurisdiction of the courts of the Member State whose law is applicable to the information-sharing agreement.
16. (1) Where the feeder UCITS and the master UCITS have concluded an agreement in accordance with Regulation 80(1), the agreement between the auditors of the master UCITS and the feeder UCITS provides that the law of the Member State applying to that agreement in accordance with Regulation 82 shall also apply to the information-sharing agreement between both auditors and that both auditors agree to the exclusive jurisdiction of the courts of that Member State.
(2) Where the agreement between the feeder UCITS and the master UCITS has been replaced by internal conduct of business rules in accordance with Regulation 80(1)(
c
), the agreement between the auditors of the master UCITS and the feeder UCITS provides that the law applying to the information-sharing agreement between both auditors shall be that of the Member State in which the feeder UCITS is established or, where different, that of the Member State in which the master UCITS is established, and that both auditors agree to the exclusive jurisdiction of the courts of the Member State whose law is applicable to the information-sharing agreement.
PART 2
Liquidation, Merger or Division of master UCITS
17. A feeder UCITS authorised by the Bank shall submit to the Bank no later than 2 months after the date on which the master UCITS informed it of the binding decision to liquidate, the following
(
a
) where the feeder UCITS intends to invest at least 85 % of its assets in units of another master UCITS in accordance with Regulation 80(4)(
a
)—
(i) its application for approval for that investment,
(ii) its application for approval of the proposed amendments to its fund rules or instrument of incorporation,
(iii) the amendments to its prospectus and its key investor information in accordance with Regulations 92 and 102 respectively, and
(iv) the other documents required pursuant to Regulation 79(3);
(
b
) where the feeder UCITS intends to convert into a UCITS that is not a feeder UCITS in accordance with Regulation 80(4)(
b
)
(i) its application for approval of the proposed amendments to its fund rules or instrument of incorporation; and
(ii) the amendments to its prospectus and its key investor information in accordance with Regulations 92 and 102 respectively;
and
(
c
) where the feeder UCITS intends to be liquidated, a notification of that intention.
18. By way of derogation from paragraph 17, where the master UCITS informed the feeder UCITS of its binding decision to liquidate more than 5 months before the date at which the liquidation will start, the feeder UCITS shall submit to its competent authorities its application or notification in accordance with one of subparagraph (
a
), (
b
) or (
c
) of paragraph 17 at the latest 3 months before that date.
19. The feeder UCITS shall inform its unit-holders of its intention to be liquidated without undue delay.
20. (
a
) The Bank shall inform a UCITS within 15 working days following the complete submission of the documents referred to in Regulation 79(3), whether the required approvals have been granted.
(
b
) On receiving the Bank’s approval pursuant to subparagraph (
a
), the feeder UCITS shall duly inform the master UCITS.
(
c
) The feeder UCITS shall take necessary measures to comply with the requirements of Regulation 80 as soon as possible after the competent authorities have granted the necessary approvals pursuant to Regulation 79.
(
d
) Where the payment of liquidation proceeds of the master UCITS is to be executed before the date on which the feeder UCITS is to start to invest in a different master UCITS pursuant to Regulation 80(4) or in accordance with its new investment objectives and policy pursuant to Regulation 80(5), the Bank shall grant approval subject to the following conditions
(i) the feeder UCITS shall
(I) receive the proceeds of the liquidation in cash; or
(II) receive some or all of the proceeds of the liquidation as a transfer of assets in kind where the feeder UCITS so wishes and where the agreement between the feeder UCITS and master UCITS or the internal conduct of business rules and the binding decision to liquidate provide for it;
(ii) any cash held or received in accordance with this subparagraph may be re-invested only for the purpose of efficient cash management before the date on which the feeder UCITS is to start to invest either in a different master UCITS or in accordance with its new investment objectives and policy.
(
e
) Where sub-paragraph (
d
)(i)(II) applies, the feeder UCITS may realise any part of the assets transferred in kind for cash at any time.
21. A feeder UCITS authorised by the Bank shall submit to the Bank, not later than one month after the date on which the feeder UCITS received the information of the planned merger or division in accordance with the Regulation 80(5)(
a
), the following
(
a
) where the feeder UCITS intends to continue to be a feeder UCITS of the same master UCITS
(i) its application for approval thereof;
(ii) where applicable, its application for approval of the proposed amendments to its fund rules or instrument of incorporation; and
(iii) where applicable, the amendments to its prospectus and its key investor information in accordance with Regulations 92 and 102 respectively;
(
b
) where the feeder UCITS intends to become a feeder UCITS of another master UCITS resulting from the proposed merger or division of the master UCITS or where the feeder UCITS intends to invest at least 85% of its assets in units of another master UCITS not resulting from the merger or division—
(i) its application for approval of that investment,
(ii) its application for approval of the proposed amendments to its trust deed, deed of constitution or articles,
(iii) the amendments to its prospectus and its key investor information in accordance with Regulations 92 and 102 respectively, and
(iv) the other documents required pursuant to Regulation 79(3);
(
c
) where the feeder UCITS intends to convert into a UCITS that is not a feeder UCITS in accordance with Regulation 80(4)(
b
)—
(i) its application for approval of the proposed amendments to its fund rules or instrument of incorporation, and
(ii) the amendments to its prospectus and its key investor information in accordance with Regulations 92 and 102 respectively;
(
d
) where the feeder UCITS intends to be liquidated, a notification of that intention.
22. For the purpose of the application of subparagraphs (
a
) and (
b
) of paragraph 21 the following should be taken into account
(
a
) the expression “continues to be a feeder UCITS of the same master UCITS” refers to cases where
(i) the master UCITS is the receiving UCITS in a proposed merger, and
(ii) the master UCITS is to continue materially unchanged as one of the resulting UCITS in a proposed division.
(
b
) The expression “becomes a feeder UCITS of another master UCITS resulting from the merger or division of the master UCITS” refers to cases where—
(i) the master UCITS is the merging UCITS and, due to the merger, the feeder UCITS becomes a unit-holder of the receiving UCITS, and
(ii) the feeder UCITS becomes a unit-holder of a UCITS resulting from a division that is materially different to the master UCITS.
23. By way of derogation from paragraph 21, in cases where the master UCITS provided the information referred to in or comparable with Regulation 61 to the feeder UCITS more than 4 months before the proposed effective date, the feeder UCITS shall submit to the Bank its application or notification in accordance with one of subparagraph (
a
), (
b
), (
c
) or (
d
) of paragraph 21 at the latest 3 months before the proposed effective date of the merger or division of the master UCITS.
24. The feeder UCITS shall inform its unit-holders and the master UCITS of its intention to be liquidated without undue delay.
25. (
a
) The feeder UCITS shall be informed within 15 working days following the complete submission of the documents referred to in Regulation 79(3), whether the competent authorities have granted the required approvals.
(
b
) Upon receipt of the information that the competent authorities have granted approval according to subparagraph (
a
), the feeder UCITS shall inform the master UCITS of it.
(
c
) After the feeder UCITS has been informed that the competent authorities have granted the necessary approvals pursuant to Regulation 79, the feeder UCITS shall take the necessary measures to comply with the requirements of Article 64 of Directive 2009/65/EC without undue delay.
(
d
)(i) In the cases of Regulation 80(5) and 84(1), the feeder UCITS shall exercise the right to request repurchase and redemption of its units in the master UCITS in accordance with Article 45(1), and subparagraph 3 of Article 60(5), of Directive 2009/65/EC, where the competent authority of the UCITS has not granted the necessary approvals required pursuant to Article 22(1) of that Directive by the working day preceding the last day on which the feeder UCITS can request repurchase and redemption of its units in the master UCITS before the merger or division is effected.
(ii) The feeder UCITS shall also exercise this right in order to ensure that the right of its own unit-holders to request repurchase or redemption of their units in the feeder UCITS according to Article 64(1)(
d
) of Directive 2009/65/EC is not affected.
(iii) Before exercising the right referred to in clause (i), the feeder UCITS shall consider available alternative solutions which may help to avoid or reduce transaction costs or other negative impacts for its own unit-holders.
(
e
)(i) Where the feeder UCITS requests repurchase or redemption of its units in the master UCITS, it shall receive one of the following
(I) the repurchase or redemption proceeds in cash;
(II) some or all of the repurchase or redemption proceeds as a transfer in kind where the feeder UCITS so wishes and where the agreement between the feeder UCITS and the master UCITS provides for it.
(ii) Where clause(i)(II) applies, the feeder UCITS may realise any part of the transferred assets for cash at any time.
(
f
) The competent authorities of the feeder UCITS shall grant approval on the condition that any cash held or received in accordance with subparagraph (
e
) may be re-invested only for the purpose of efficient cash management before the date on which the feeder UCITS is to start to invest in the new master UCITS or in accordance with its new investment objectives and policy.
PART 3
Content of Information Sharing Agreement where Master UCITS and Feeder UCITS have different Trustees
26. The information-sharing agreement between the trustee of the master UCITS and the trustee of the feeder UCITS referred to in Regulation 81(1)(
a
) shall include the following
(
a
) the identification of the documents and categories of information which are to be routinely shared between both trustees, and whether such information or documents are provided by one trustee to the other or made available on request;
(
b
) the manner and timing, including any applicable deadlines, of the transmission of information by the trustee of the master UCITS to the trustee of the feeder UCITS;
(
c
) the coordination of the involvement of both trustees, to the extent appropriate in view of their respective duties under national law, in relation to operational matters, including
(i) the procedure for calculating the net asset value of each UCITS, including any measures appropriate to protect against the activities of market timing in accordance with Regulation 80(2);
(ii) the processing of instructions by the feeder UCITS to purchase, subscribe or request the repurchase or redemption of units in the master UCITS, and the settlement of such transactions, including any arrangement to transfer assets in kind;
(
d
) the coordination of accounting year-end procedures;
(
e
) what details of breaches by the master UCITS of the law and the fund rules or instrument of incorporation the trustee of the master UCITS shall provide to the trustee of the feeder UCITS and the manner and timing of their provision;
(
f
) the procedure for handling ad hoc requests for assistance from one trustee to the other; and
(
g
) identification of particular contingent events which ought to be notified by one trustee to the other on an ad hoc basis, and the manner and timing in which this will be done.
27. The irregularities referred to in Regulation 81(2) which the trustee of the master UCITS detects in the course of carrying out its function under these Regulations and which may have a negative impact on the feeder UCITS shall include, but are not limited to
(
a
) errors in the net asset value calculation of the master UCITS;
(
b
) errors in transactions for or settlement of the purchase, subscription or request to repurchase or redeem units in the master UCITS undertaken by the feeder UCITS;
(
c
) errors in the payment or capitalisation of income arising from the master UCITS, or in the calculation of any related withholding tax;
(
d
) breaches of the investment objectives, policy or strategy of the master UCITS, as described in its fund rules or instrument of incorporation, prospectus or key investor information; and
(
e
) breaches of investment and borrowing limits set out in national law or in the fund rules, instruments of incorporation, prospectus or key investor information.
PART 4
Content of Information Sharing Agreement where Master UCITS and Feeder UCITS have Different Auditors
28. The information-sharing agreement between the auditor of the master UCITS and the auditor of the feeder UCITS referred to in Regulation 82(1)(
a
) shall include the following
(
a
) the identification of the documents and categories of information which are to be routinely shared between both auditors;
(
b
) whether the information or documents referred to in subparagraph (
a
) are to be provided by one auditor to the other or made available on request;
(
c
) the manner and timing, including any applicable deadlines, of the transmission of information by the auditor of the master UCITS to the auditor of the feeder UCITS;
(
d
) the coordination of the involvement of each auditor in the accounting year-end procedures for the respective UCITS;
(
e
) identification of matters that shall be treated as irregularities disclosed in the audit report of the auditor of the master UCITS for the purposes of Regulation 82(2);
(
f
) the manner and timing for handling ad hoc requests for assistance from one auditor to the other, including a request for further information on irregularities disclosed in the audit report of the auditor of the master UCITS.
29. The agreement referred to in paragraph 1 shall include provisions on the preparation of the audit reports referred to in Regulations 82(2) and 93 and the manner and timing for the provision of the audit report for the master UCITS and drafts of it to the auditor of the feeder UCITS.
30. Where the feeder UCITS and the master UCITS have different accounting year-end dates, the agreement referred to in paragraph 28 shall include the manner and timing by which the auditor of the master UCITS is to make the ad hoc report required by Regulation 82(2)(
b
) and to provide it and drafts of it to the auditor of the feeder UCITS.
Regulation 89(2)
SCHEDULE 11
Information to be contained in prospectus
31. Management companies shall retain the necessary resources and expertise so as to effectively monitor the activities carried out by third parties on the basis of an arrangement with the management company, especially with regard to the management of the risk associated with those arrangements.
32. Management companies shall ensure that the performance of multiple functions by relevant persons does not and is not likely to prevent those relevant persons from discharging any particular function soundly, honestly, and professionally.
33. For the purposes laid down in paragraphs 30 to 32, management companies shall take into account the nature, scale and complexity of the business of the management company, and the nature and range of services and activities undertaken in the course of that business.
Administrative and accounting procedures — Electronic data processing
34. Management companies shall make appropriate arrangements for suitable electronic systems so as to permit a timely and proper recording of each portfolio transaction or subscription or redemption order in order to be able to comply with paragraphs 58 to 61.
35. Management companies shall ensure a high level of security during the electronic data processing as well as integrity and confidentiality of the recorded information, as appropriate.
Administrative and accounting procedures — Accounting procedures
36. (1) Management companies shall ensure the employment of accounting policies and procedures as referred to in Regulation 22 so as to ensure the protection of unit-holders.
(2) UCITS accounting shall be maintained in such a way that all assets and liabilities of the UCITS can be directly identified at all times.
(3) Where a UCITS has different sub-funds, separate accounts shall be maintained for each sub-fund.
37. Management companies shall have accounting policies and procedures established, implemented and maintained, in accordance with the accounting rules of the State, so as to ensure that the calculation of the net asset value of each UCITS is accurately effected, on the basis of the accounting, and that subscription and redemption orders can be properly executed at that net asset value.
38. Management companies shall establish appropriate procedures to ensure the proper and accurate valuation of the assets and liabilities of the UCITS, as consistent with the applicable rules referred to in Regulation 108 part of internal control mechanisms.
Internal control mechanisms — Control by senior management and supervisory function
39. When allocating functions internally, management companies shall ensure that senior management and, where appropriate, the supervisory function, are responsible for the management company’s compliance with its obligations under these Regulations.
40. The management company shall ensure that its senior management—
(
a
) is responsible for the implementation of the general investment policy for each managed UCITS, as defined, where relevant, in the prospectus, the fund rules or the instruments of incorporation of the investment company,
(
b
) oversees the approval of investment strategies for each managed UCITS,
(
c
) is responsible for ensuring that the management company has a permanent and effective compliance function, as referred to in paragraphs 45 to 47, even if this function is performed by a third party,
(
d
) ensures and verifies on a periodic basis that the general investment policy, the investment strategies and the risk limits of each managed UCITS are properly and effectively implemented and complied with, even if the risk management function is performed by third parties,
(
e
) approves and reviews on a periodic basis the adequacy of the internal procedures for undertaking investment decisions for each managed UCITS, so as to ensure that such decisions are consistent with the approved investment strategies,
(
f
) approves and reviews on a periodic basis the risk management policy and arrangements, processes and techniques for implementing that policy, as referred to in paragraphs 1 to 3 of Schedule 9, including the risk limit system for each managed UCITS.
41. The management company shall also ensure that its senior management and, where appropriate, its supervisory function shall—
(
a
) assess and periodically review the effectiveness of the policies, arrangements and procedures put in place to comply with the obligations in these Regulations, and
(
b
) take appropriate measures to address any deficiencies.
42. Management companies shall ensure that their senior management receives on a frequent basis, and at least annually, reports in writing on matters of compliance, internal audit and risk management indicating in particular whether appropriate remedial measures have been taken in the event of any deficiencies.
43. Management companies shall ensure that their senior management receives on a regular basis reports on the implementation of investment strategies and of the internal procedures for taking investment decisions referred to in subparagraphs (
b
) to (
e
) of paragraph 40.
44. Management companies shall ensure that the supervisory function, if any, receives on a regular basis written reports on the matters referred to in paragraph 43.
Internal control mechanisms — Permanent compliance function
45. (1) Management companies shall establish, implement and maintain adequate policies and procedures designed to detect any risk of failure by the management company to comply with its obligations under these Regulations, as well as the associated risks, and put in place adequate measures and procedures designed to minimise such risk and to enable the Bank to exercise its powers effectively.
(2) Management companies shall take into account the nature, scale and complexity of the business of the company, and the nature and range of services and activities undertaken in the course of that business.
46. Management companies shall establish and maintain a permanent and effective compliance function which operates independently and which has the following responsibilities
(
a
) to monitor and, on a regular basis, to assess the adequacy and effectiveness of the measures, policies and procedures put in place in accordance with paragraph 45, and the actions taken to address any deficiencies in the management company’s compliance with its obligations; and
(
b
) to advise and assist the relevant persons responsible for carrying out services and activities to comply with the management company’s obligations under these Regulations.
47. (1) In order to enable the compliance function referred to in paragraph 46 to discharge its responsibilities properly and independently, management companies shall ensure that the following conditions are satisfied
(
a
) the compliance function must have the necessary authority, resources, expertise and access to all relevant information;
(
b
) a compliance officer must be appointed and must be responsible for the compliance function and for any reporting on a frequent basis, and at least annually, to the senior management on matters of compliance, indicating in particular whether the appropriate remedial measures have been taken in the event of any deficiencies;
(
c
) the relevant persons involved in the compliance function must not be involved in the performance of services or activities they monitor; and
(
d
) the method of determining the remuneration of the relevant persons involved in the compliance function must not compromise their objectivity and must not be likely to do so.
(2) In situations where, in view of the nature, scale and complexity of its business, and the nature and range of its services and activities, a management company is able to demonstrate that that requirement is not proportionate and that its compliance function continues to be effective, it shall not be required to comply with clause (
c
) or (
d
) of subparagraph (1) of paragraph 46.
Internal control mechanisms — Permanent internal audit function
48. Management companies, where appropriate and proportionate in view of the nature, scale and complexity of their business and the nature and range of collective portfolio management activities undertaken in the course of that business, shall establish and maintain an internal audit function which is separate and independent from the other functions and activities of the management company.
49. The internal audit function referred to in paragraph 48 shall have the following responsibilities
(
a
) to establish, implement and maintain an audit plan to examine and evaluate the adequacy and effectiveness of the management company’s systems, internal control mechanisms and arrangements;
(
b
) to issue recommendations based on the result of work carried out in accordance with subparagraph (
a
);
(
c
) to verify compliance with the recommendations referred to in subparagraph (
b
);
(
d
) to report in relation to internal audit matters in accordance with paragraph 42.
Internal control mechanisms — Permanent risk management function
50. Management companies shall establish and maintain a permanent risk management function.
51. (1) The permanent risk management function referred to in paragraph 50 shall be hierarchically and functionally independent from operating units.
(2) However, the Bank may allow management companies to derogate from that obligation where the derogation is appropriate and proportionate in view of the nature, scale and complexity of the management company’s business and of the UCITS it manages.
(3) A management company shall be able to demonstrate that appropriate safeguards against conflicts of interest have been adopted so as to allow an independent performance of risk management activities and that its risk management process satisfies the requirements of Regulation 69.
52. The permanent risk management function shall—
(
a
) implement the risk management policy and procedures,
(
b
) ensure compliance with the UCITS risk limit system, including statutory limits concerning global exposure and counterparty risk in accordance with paragraphs 11 to 24 of Schedule 9,
(
c
) provide advice to the board of directors as regards the identification of the risk profile of each managed UCITS,
(
d
) provide regular reports to the board of directors and, where it exists, the supervisory function, on—
(i) the consistency between the current levels of risk incurred by each managed UCITS and the risk profile agreed for that UCITS,
(ii) the compliance of each managed UCITS with relevant risk limit systems,
(iii) the adequacy and effectiveness of the risk management process, indicating in particular whether appropriate remedial measures have been taken in the event of any deficiencies,
(
e
) provide regular reports to the senior management outlining the current level of risk incurred by each managed UCITS and any actual or foreseeable breaches to their limits, so as to ensure that prompt and appropriate action can be taken, and
(
f
) review and support, where appropriate, the arrangements and procedures for the valuation of OTC derivatives as referred to in paragraphs 25 to 28 of Schedule 9.
53. The permanent risk management function shall have the necessary authority and access to all relevant information necessary to fulfil the tasks set out in paragraph 52.
Internal control mechanisms — Personal transactions
54. Management companies shall establish, implement and maintain adequate arrangements aimed at preventing the following activities in the case of any relevant person who is involved in activities that may give rise to a conflict of interest, or who has access to inside information within the meaning of Regulation 2 of the Market Abuse (Directive 2003/6/EC) Regulations 2005 (
S.I. No. 342 of 2005
) or to other confidential information relating to UCITS or transactions with or for UCITS by virtue of an activity carried out by him on behalf of the management company
(
a
) entering into a personal transaction which fulfils at least one of the following criteria
(i) that person is prohibited from entering into that personal transaction;
(ii) it involves the misuse or improper disclosure of confidential information;
(iii) it conflicts or is likely to conflict with an obligation of the management company under these Regulations or the MIFID Regulations;
(
b
) advising or procuring, other than in the proper course of his employment or contract for services, any other person to enter into a transaction in financial instruments which, if a personal transaction of the relevant person, would be covered by subparagraph (
a
) or by points (
a
) or (
b
) of Article 25(2) of Commission Directive 2006/73/EC implementing Directive 2004/39/EC
15
of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive, or would otherwise constitute a misuse of information relating to pending orders;
15 OJ No. L 241, 02.09.2006, p. 26
(
c
) disclosing, other than in the normal course of his employment or contract for services and without prejudice to Article 3(
a
) of Directive 2003/6/EC of the European Parliament and of the Council of 28
January 2003
16
on insider dealing and market manipulation (market abuse), any information or opinion to any other person if the relevant person knows, or reasonably ought to know, that as a result of that disclosure that other person will or would be likely to take either of the following steps
16 OJ No. L96, 12.04.2003, p. 16
(i) to enter into a transaction in financial instruments which, where a personal transaction of the relevant person would be covered by subparagraph (
a
) or by point (
a
) or (
b
) of Article 25(2) of Directive 2006/73/EC, or would otherwise constitute a misuse of information relating to pending orders;
(ii) to advise or procure another person to enter into such a transaction.
55. (1) The arrangements required under paragraph 54 shall in particular be designed to ensure that
(
a
) each relevant person covered by paragraph 54 is aware of the restrictions on personal transactions, and of the measures established by the management company in connection with personal transactions and disclosure, in accordance with that paragraph;
(
b
) the management company is informed promptly of any personal transaction entered into by a relevant person, either by notification of that transaction or by other procedures enabling the management company to identify such transactions;
(
c
) a record is kept of the personal transaction notified to the management company or identified by it, including any authorisation or prohibition in connection with such a transaction.
(2) For the purposes of clause (
b
) of subparagraph (1), where certain activities are performed by third parties, the management company shall ensure that the entity performing the activity maintains a record of personal transactions entered into by any relevant person and provides that information to the management company promptly on request.
56. Paragraphs 54 to 55 shall not apply to the following kinds of personal transactions
(
a
) personal transactions effected under a discretionary portfolio management service where there is no prior communication in connection with the transaction between the portfolio manager and the relevant person or other person for whose account the transaction is executed; and
(
b
) personal transactions in UCITS or units in collective undertakings that are subject to supervision under the law of a Member State which requires an equivalent level of risk spreading in their assets, where the relevant person and any other person for whose account the transactions are effected are not involved in the management of that undertaking.
57. For the purposes of paragraphs 54 to 56, “personal transaction” shall have the same meaning as in Article 11 of Directive 2006/73/EC.
Internal control mechanisms — Recording of portfolio transactions
58. Management companies shall ensure, for each portfolio transaction relating to UCITS, that a record of information which is sufficient to reconstruct the details of the order and the executed transaction is produced without delay.
59. (1) The record referred to in paragraph 58 shall include—
(
a
) the name or other designation of the UCITS and of the person acting on account of the UCITS,
(
b
) the details necessary to identify the instrument concerned,
(
c
) the quantity,
(
d
) the type of the order or transaction,
(
e
) the price,
(
f
) for orders, the date and exact time of the transmission of the order and name or other designation of the person to whom the order was transmitted, or for transactions, the date and exact time of the decision to deal and execution of the transaction,
(
g
) the name of the person transmitting the order or executing the transaction,
(
h
) where applicable, the reasons for the revocation of an order, and
(i) for executed transactions, the counterparty and execution venue identification.
(2) For the purposes of clause (i) of subparagraph (1), an “execution venue” shall mean a regulated market, a multilateral trading facility, a systematic internaliser as referred to under Regulation 3(1) of the MIFID Regulations, or a market maker or other liquidity provider or an entity that performs a similar function in a third country to the functions performed by any of the foregoing.
Internal control mechanisms — Recording of subscription and redemption orders
60. Management companies shall take all reasonable steps to ensure that the received UCITS subscription and redemption orders are centralised and recorded immediately after receipt of any such order.
61. That record shall include information on the following
(
a
) the relevant UCITS;
(
b
) the person giving or transmitting the order;
(
c
) the person receiving the order;
(
d
) the date and time of the order;
(
e
) the terms and means of payment;
(
f
) the type of the order;
(
g
) the date of execution of the order;
(
h
) the number of units subscribed or redeemed;
(
i
) the subscription or redemption price for each unit;
(
j
) the total subscription or redemption value of the units;
(
k
) the gross value of the order including charges for subscription or net amount after charges for redemption.
Internal control mechanisms — record-keeping requirements
62. (1) Management companies shall ensure the retention of the records referred to in paragraphs 58 to 61 for a period of at least 5 years.
(2) However, the Bank may, in exceptional circumstances, require management companies to retain any or all of those records for a longer period, determined by the nature of the instrument or portfolio transaction, where it is necessary to enable the authority to exercise its supervisory functions under these Regulations.
63. (1) Following the termination of the authorisation of a management company, the management company shall retain records referred to in paragraph 62 for the outstanding term of the 5-year period.
(2) Where the management company transfers its responsibilities in relation to the UCITS to another management company, arrangements shall made to ensure that such records for the past 5 years are accessible to that company.
64. The records shall be retained in a medium that allows the storage of information in a way accessible for future reference by the Bank, and in such a form and manner that the following conditions are met
(
a
) the Bank must be able to access them readily and to reconstitute each key stage of the processing of each portfolio transaction;
(
b
) it must be possible for any corrections or other amendments, and the contents of the records prior to such corrections or amendments, to be easily ascertained; and
(
c
) it must not be possible for the records to be otherwise manipulated or altered.
Conflict of interests: Criteria for the identification of conflicts of interest
65. For the purposes of identifying the types of conflict of interest that arise in the course of providing services and activities and whose existence may damage the interests of a UCITS, management companies shall take into account, by way of minimum criteria, the question of whether the management company or a relevant person, or a person directly or indirectly linked by way of control to the management company, is in any of the following situations, whether as a result of providing collective portfolio management activities or otherwise
(
a
) the management company or that person is likely to make a financial gain, or avoid a financial loss, at the expense of the UCITS;
(
b
) the management company or that person has an interest in the outcome of a service or an activity provided to the UCITS or another client or of a transaction carried out on behalf of the UCITS or another client, which is distinct from the UCITS interest in that outcome;
(
c
) the management company or that person has a financial or other incentive to favour the interest of another client or group of clients over the interests of the UCITS;
(
d
) the management company or that person carries on the same activities for the UCITS and for another client or clients which are not UCITS;
(
e
) the management company or that person receives or will receive from a person other than the UCITS an inducement in relation to collective portfolio management activities provided to the UCITS, in the form of monies, goods or services, other than the standard commission or fee for that service.
66. Management companies shall, when identifying the types of conflict of interests, take into account
(
a
) the interests of the management company, including those deriving from its belonging to a group or from the performance of services and activities, the interests of the clients and the duty of the management company towards the UCITS, and
(
b
) the interests of 2 or more managed UCITS.
Conflicts of interest policy
67. (1) Management companies shall establish, implement and maintain an effective conflicts of interest policy. That policy shall be set out in writing and shall be appropriate to the size and organisation of the management company and the nature, scale and complexity of its business.
(2) Where the management company is a member of a group, the policy shall also take into account any circumstances of which the company is or should be aware which may give rise to a conflict of interest resulting from the structure and business activities of other members of the group.
68. The conflicts of interest policy established in accordance with paragraph 67 shall include the following
(
a
) the identification of, with reference to the collective portfolio management activities carried out by or on behalf of the management company, the circumstances which constitute or may give rise to a conflict of interest entailing a material risk of damage to the interests of the UCITS or one or more other clients; and
(
b
) procedures to be followed and measures to be adopted in order to manage such conflicts.
Independence in conflicts management
69. The procedures and measures provided for in paragraph 68(
b
) shall be designed to ensure that relevant persons engaged in different business activities involving a conflict of interest carry on those activities at a level of independence appropriate to the size and activities of the management company and of the group to which it belongs and to the materiality of the risk of damage to the interests of clients.
70. (1) The procedures to be followed and measures to be adopted in accordance with paragraph 68(
b
) shall include the following where necessary and appropriate for the management company to ensure the requisite degree of independence
(
a
) effective procedures to prevent or control the exchange of information between relevant persons engaged in collective portfolio management activities involving a risk of a conflict of interest where the exchange of that information may harm the interests of one or more clients;
(
b
) the separate supervision of relevant persons whose principal functions involve carrying out collective portfolio management activities on behalf of, or providing services to, clients or to investors whose interests may conflict, or who otherwise represent different interests that may conflict, including those of the management company;
(
c
) the removal of any direct link between the remuneration of relevant persons principally engaged in one activity and the remuneration of, or revenues generated by, different relevant persons principally engaged in another activity, where a conflict of interest may arise in relation to those activities;
(
d
) measures to prevent or limit any person from exercising inappropriate influence over the way in which a relevant person carries out collective portfolio management activities; and
(
e
) measures to prevent or control the simultaneous or sequential involvement of a relevant person in separate collective portfolio management activities where such involvement may impair the proper management of conflicts of interest.
(2) Where the adoption or the practice of one or more of those measures and procedures does not ensure the requisite degree of independence, management companies shall adopt such alternative or additional measures and procedures which the Bank considers are necessary and appropriate for those purposes.
Management of activities giving rise to detrimental conflicts of interest
71. Management companies shall keep and regularly update a record of the types of collective portfolio management activities undertaken by or on behalf of the management company in which a conflict of interest entailing a material risk of damage to the interests of one or more UCITS or other clients has arisen or, in the case of an ongoing collective portfolio management activity, may arise.
72. Where the organisational or administrative arrangements made by the management company for the management of conflicts of interest are not sufficient to ensure, with reasonable confidence, that risks of damage to the interests of UCITS or of its unit-holders will be prevented, the senior management or other competent internal body of the management company shall be promptly informed in order for them to take any necessary decision to ensure that in any case the management company acts in the best interests of the UCITS and of its unit-holders.
73. The management company shall report situations referred to in paragraph 72 to investors by any appropriate durable medium and give reasons for its decision.
Strategies for exercise of voting rights
74. Management companies shall develop adequate and effective strategies for determining when and how voting rights attached to instruments held in the managed portfolios are to be exercised, to the exclusive benefit of the UCITS concerned.
75. The strategies referred to in paragraph 74 shall determine measures and procedures for—
(
a
) monitoring relevant corporate events,
(
b
) ensuring that the exercise of voting rights is in accordance with the investment objectives and policy of the relevant UCITS, and
(
c
) preventing or managing any conflicts of interest arising from the exercise of voting rights.
76. A summary description of the strategies referred to in paragraph 74 shall be made available to investors. Details of the actions taken on the basis of those strategies shall be made available to the unit-holders free of charge and on their request.
Regulation 35(7)
Schedule 6
Particulars of standard agreement between trustee and mangement company
77. Where the limits in this Part are exceeded for reasons beyond the control of a UCITS or as a result of the exercise of subscription rights, the UCITS shall adopt as a priority objective for its sales transactions the remedying of that situation, taking due account of the interests of its unit-holders.
PART 9
Master — Feeder Structures
Chapter 1
Scope and approval
Meaning of feeder UCITS and master UCITS, etc
78. (1) A feeder UCITS is a UCITS, or sub-fund thereof, which has been approved to invest, by way of derogation from Regulations 4(3)(
a
), 68, 70 and 74(2)(
a
)(iii), at least 85% of its assets in units of another UCITS or sub-fund thereof (the master UCITS).
(2)(
a
) A feeder UCITS may hold up to 15 % of its assets in one or more of the following
(i) ancillary liquid assets in accordance with subparagraph 2 of Regulation 68;
(ii) financial derivative instruments, which may be used only for hedging purposes, in accordance with Regulations 68(1)(
g
) and 69(2) to (4);
(iii) movable and immovable property which is essential for the direct pursuit of the business, if the feeder UCITS is an investment company.
(
b
) For the purposes of compliance with Regulation 69(2) to (4), the feeder UCITS shall calculate its global exposure related to financial derivative instruments by combining its own direct exposure under clause (ii) of paragraph (
a
) with either—
(i) the master UCITS’ actual exposure to financial derivative instruments in proportion to the feeder UCITS’ investment into the master UCITS, or
(ii) the master UCITS’ potential maximum global exposure to financial derivative instruments provided for in the master UCITS’ trust deed, deed of constitution or articles in proportion to the feeder UCITS investment into the master UCITS.
(3) A master UCITS is a UCITS, or a sub-fund thereof, which—
(
a
) has, among its unit-holders, at least one feeder UCITS,
(
b
) is not itself a feeder UCITS, and
(
c
) does not hold units of a feeder UCITS.
(4) The following derogations for a master UCITS shall apply
(
a
) where a master UCITS has at least 2 feeder UCITS as unit-holders, Regulation 4(3)(
a
) and (9)(
c
) shall not apply, giving the master UCITS the choice whether or not to raise capital from other investors;
(
b
) where a master UCITS does not raise capital from the public in a Member State other than that in which it is established, but only has one or more feeder UCITS in that Member State, Part 12 and the second subparagraph of Article 108(1) of Directive 2009/65/EC shall not apply.
Approval by Bank of investment of feeder UCITS
79. (1) The investment of a feeder UCITS authorised by the Bank into a given master UCITS which exceeds the limit applicable under Regulation 73(1) for investments into other UCITS shall be subject to prior approval by the Bank.
(2) The feeder UCITS shall be informed within 15 working days following the submission of a complete file of the documents referred to in paragraph (3), whether or not the Bank has approved the feeder UCITS investment into the master UCITS.
(3)(
a
) The Bank shall grant approval if the feeder UCITS, its trustee and its auditor, as well as the master UCITS, comply with all the requirements set out in this Part. For such purposes, the feeder UCITS shall provide the Bank with the following documents
(i) where the master UCITS is not authorised by the Bank—
(I) the fund rules of the master UCITS, and
(II) the prospectus and key investor information of the master UCITS;
(ii) the agreement between the feeder UCITS and the master UCITS or the internal conduct of business rules referred to in Regulation 80(1);
(iii) where applicable, the information to be provided to unit-holders referred to in Regulation 80(1);
(iv) where the master UCITS and the feeder UCITS have different trustees, the information-sharing agreement referred to in Regulation 80(1) between their respective trustees; and
(v) where the master UCITS and the feeder UCITS have different auditors, the information-sharing agreement referred to in Regulation 80(1) between their respective auditors.
(
b
) Where the master UCITS is established in a Member State other than the State, the feeder UCITS shall also provide an attestation by the competent authority of the master UCITS home Member State that the Master UCITS is a UCITS or a sub-fund thereof, which fulfils the conditions set out in Regulation 78(3)(
b
) and (
c
). Documents shall be provided by the feeder UCITS to the Bank in one of the State’s official languages.
Common provisions for feeder UCITS and master UCITS
80. (1)(
a
) A master UCITS authorised by the Bank shall provide the feeder UCITS with all the documents and information necessary for the feeder UCITS to meet the requirements laid down in these Regulations or, in the case of feeder UCITS established in a Member State other than the State, laid down in the Directive. For this purpose, both feeder UCITS and the master UCITS shall enter into an agreement.
(
b
) A feeder UCITS authorised by the Bank shall not invest in excess of the limit applicable under Regulation 73(1) in units of the master UCITS until the agreement referred to in the subparagraph (
a
) has become effective. That agreement shall be made available, on request and free of charge, to all unit-holders.
(
c
) In the event that both master UCITS and feeder UCITS are managed by the same management company, the agreement may be replaced by internal conduct of business rules ensuring compliance with the requirements set out in this paragraph.
(2) The master UCITS and the feeder UCITS shall take appropriate measures to coordinate the timing of their net asset value calculation and publication in order to avoid market timing in their units, preventing arbitrage opportunities.
(3) Without prejudice to Regulation 104, where a master UCITS temporarily suspends the repurchase, redemption or subscription of its units, whether at its own initiative or at the request of its competent authority, each of its feeder UCITS authorised by the Bank is entitled to suspend the repurchase, redemption or subscription of its units notwithstanding the conditions laid down in Regulation 104(2) within the same period of time as the master UCITS.
(4)(
a
) Where a master UCITS is liquidated, a feeder UCITS authorised by the Bank shall also be liquidated unless the Bank approves—
(i) the investment of at least 85% of the assets of the feeder UCITS in units of another master UCITS, or
(ii) the amendment of its trust deed, deed of constitution or articles in order to enable the feeder UCITS to convert into a UCITS which is not a feeder UCITS.
(
b
) Without prejudice to any of the Bank’s rules concerning compulsory liquidation, the liquidation of a master UCITS authorised by the Bank shall take place no sooner than 3 months after the master UCITS has informed all unit-holders and the competent authority of the feeder UCITS home Member State of the binding decision to liquidate.
(5)(
a
) Where a master UCITS merges with another UCITS or is divided into 2 or more UCITS, a feeder UCITS authorised by the Bank shall be liquidated unless the Bank grants approval to the feeder UCITS to—
(i) continue to be a feeder UCITS of the master UCITS or another UCITS resulting from the merger or division of the master UCITS,
(ii) invest at least 85% of its assets in units of another master UCITS not resulting from the merger or division, or
(iii) amend its trust deed, deed of constitution or articles in order to convert into a UCITS which is not a feeder UCITS.
(
b
) No merger or division of a master UCITS authorised by the Bank shall become effective, unless the master UCITS has provided all of the unit-holders and the competent authority of its feeder UCITS home Member State including the Bank, if the feeder UCITS is authorised by the Bank, with the information referred to, or comparable with that referred to, in Regulation 61 by 60 days before the proposed effective date.
(
c
) Unless the competent authority of the feeder UCITS home Member State (including the Bank), where a feeder UCITS is authorised by the Bank, has granted approval pursuant to subparagraph (
a
), the master UCITS shall enable the feeder UCITS to repurchase or redeem all units in the master UCITS before the merger or division of the master UCITS becomes effective.
(6) The requirements specified in Parts 1 and 2 of Schedule 10 shall have effect for the purposes of this Regulation.
Provisions applicable where master UCITS and feeder UCITS have different trustees
81. (1)(
a
) Where a master UCITS and a feeder UCITS have different trustees, those trustees shall enter into an information-sharing agreement in order to ensure the fulfilment of the duties of both trustees.
(
b
) A feeder UCITS authorised by the Bank shall not invest in units of a master UCITS until such agreement has become effective.
(
c
) Where it complies with the requirements laid down in this Part, a trustee of a master UCITS authorised by the Bank or of a feeder UCITS authorised by the Bank shall be not be found to be in breach of any rules that restrict the disclosure of information or relate to data protection where such rules are provided for in contract or in law, regulation or administrative provision. Such compliance shall not give rise to any liability on the part of such trustee or any person acting on its behalf.
(
d
) A feeder UCITS authorised by the Bank shall communicate to its trustee any information about the master UCITS which is required for the completion of the duties of the trustee.
(2) The trustee of a master UCITS authorised by the Bank shall immediately inform the Bank, the feeder UCITS and, where applicable, the trustee of the feeder UCITS about any irregularities it detects with regard to the master UCITS which are deemed to have a negative impact on the feeder UCITS.
(3) The requirements specified in Part 3 of Schedule 10 shall have effect for the purposes of this Regulation.
Provisions applicable where master UCITS and feeder UCITS have different auditors
82. (1)(
a
) Where the master UCITS and the feeder UCITS have different auditors, those auditors shall enter into an information-sharing agreement in order to ensure the fulfilment of the duties of both auditors, including the arrangements taken to comply with the requirements of paragraph (2).
(
b
) A feeder UCITS authorised by the Bank shall not invest in units of a master UCITS until such agreement has become effective.
(2)(
a
) In its audit report, the auditor of a feeder UCITS authorised by the Bank shall take into account the audit report of the master UCITS. The auditor of a feeder UCITS shall, in particular, report on any irregularities revealed in the audit report of the master UCITS and on their impact on the feeder UCITS.
(
b
) Where a master UCITS authorised by the Bank has a different accounting year to its feeder UCITS, the auditor of the master UCITS shall make an ad hoc report on the closing date of the feeder UCITS.
(3) Where it complies with the requirements laid down in this Part, an auditor of a master UCITS authorised by the Bank or of a feeder UCITS authorised by the Bank shall not be found to be in breach of any rules that restrict the disclosure of information or relate to data protection where such rules are provided for in contract or in law, regulation or administrative provision. Such compliance shall not give rise to any liability on the part of such auditor or any person acting on its behalf.
(4) The requirements specified in Part 4 of Schedule 10 shall have effect for the purposes of this Regulation.
Additional information to be contained in prospectus of feeder UCITS
83. (1) In addition to the information provided for in Schedule 11, the prospectus of a feeder UCITS authorised by the Bank shall contain the following information
(
a
) a declaration that the feeder UCITS is a feeder of a particular master UCITS and as such permanently invests 85% or more of its assets in units of that master UCITS;
(
b
) the investment objective and policy, including the risk profile and whether the performance of the feeder and the master UCITS are identical, or to what extent and for which reasons they differ, including a description of investment made in accordance with Regulation 78(2);
(
c
) a brief description of the master UCITS, its organisation, its investment objective and policy, including the risk profile, and an indication of how the prospectus of the master UCITS may be obtained;
(
d
) a summary of the agreement entered into between the feeder UCITS and the master UCITS or of the internal conduct of business rules pursuant to Regulation 80(1);
(
e
) how the unit-holders may obtain further information on the master UCITS and the agreement entered into between the feeder UCITS and the master UCITS pursuant to Regulation 80(1);
(
f
) a description of all remuneration or reimbursement of costs payable by the feeder UCITS by virtue of its investment in units of the master UCITS, as well as of the aggregate charges of the feeder UCITS and the master UCITS; and
(
g
) a description of the tax implications of the investment into the master UCITS for the feeder UCITS.
(2)(
a
) In addition to the information provided for in Schedule 12, the annual report of the feeder UCITS shall include a statement on the aggregate charges of the feeder UCITS and the master UCITS.
(
b
) The annual and the half-yearly reports of the feeder UCITS shall indicate how the annual and the half-yearly report of the master UCITS can be obtained.
(3) In addition to the requirements laid down in Regulations 94 and 102, the feeder UCITS shall send the prospectus, the key investor information referred to in Regulation 98 and any amendment thereto, as well as the annual and half-yearly reports of the master UCITS, to the Bank.
(4) A feeder UCITS shall disclose in any relevant marketing communications that it permanently invests 85% or more of its assets in units of such master UCITS.
(5) A paper copy of the prospectus, and the annual and half-yearly reports of the master UCITS, shall be delivered by the feeder UCITS to investors on request and free of charge.
Information to be provided to unit-holders by certain feeder UCITS
84. (1)(
a
) A feeder UCITS authorised by the Bank which already pursues activities as a UCITS, including those of a feeder UCITS of a different master UCITS, shall provide the following information to its unit-holders
(i) a statement that the Bank approved the investment of the feeder UCITS in units of such master UCITS;
(ii) the key investor information referred to in Regulation 98 concerning the feeder and the master UCITS;
(iii) the date when the feeder UCITS is to start to invest in the master UCITS or, if it has already invested therein, the date when its investment will exceed the limit applicable under Regulation 73(1); and
(iv) a statement that the unit-holders have the right to request within 30 days the repurchase or redemption of their units without any charges other than those retained by the UCITS to cover disinvestment costs. That right shall become effective from the moment the feeder UCITS has provided the information referred to in this paragraph.
(
b
) That information shall be provided at least 30 days before the date referred to in clause (iii) of subparagraph (
a
).
(2) A feeder UCITS authorised by the Bank which has notified the Bank of its intention to market its units in a host Member State shall provide the information referred to in paragraph (1) in the official language, or one of the official languages, of that feeder UCITS host Member State or in a language approved by their competent authorities. The feeder UCITS shall be responsible for producing the translation. That translation shall faithfully reflect the content of the original.
(3) A feeder UCITS authorised by the Bank shall not invest into the units of the given master UCITS in excess of the limit applicable under Regulation 73(1) before the period of 30 days referred to in paragraph (1)(
b
) has elapsed.
Feeder UCITS to monitor master UCITS, etc
85. (1) A feeder UCITS authorised by the Bank shall monitor effectively the activity of its master UCITS. In performing that obligation, the feeder UCITS may rely on information and documents received from the master UCITS or, where applicable, its trustee and auditor, unless there is reason to doubt their accuracy.
(2) Where, in connection with an investment in the units of the master UCITS, a distribution fee, commission or other monetary benefit is received by the feeder UCITS, its management company, or any person acting on behalf of either the feeder UCITS or the management company of the feeder UCITS, the fee, commission or other monetary benefit, as the case may be, shall be paid into the assets of the feeder UCITS.
Information to be supplied to Bank by master UCITS authorised by Bank, etc
86. (1) A master UCITS authorised by the Bank shall immediately inform the Bank of the identity of each feeder UCITS which invests in its units. Where the feeder UCITS is not authorised by the Bank, the Bank shall immediately inform the competent authority of the feeder UCITS home Member State of such investment.
(2) The master UCITS shall not charge subscription or redemption fees for the investment of the feeder UCITS into its units or the divestment thereof.
(3) The master UCITS shall ensure the timely availability of all information that is required in accordance with these Regulations, the Directive, other community law, Irish law, trust deed, deed of constitution or articles of the feeder UCITS and to the competent authority, the trustee and the auditor of the feeder UCITS.
Information to be given by Bank in relation to non-compliance, etc
87. (1) Where the master UCITS and the feeder UCITS are authorised by the Bank, the Bank shall immediately inform the feeder UCITS of any decision, measure, observation of non-compliance with the conditions of this Part or of any information reported pursuant to Regulation 135 with regard to the master UCITS or, where applicable, its trustee or auditor.
(2) Where the master UCITS is authorised by the Bank and the feeder UCITS is authorised in a different Member State, the Bank shall immediately communicate any decision, measure, observation of non-compliance with the conditions of this Part or information reported pursuant to Regulation 135 with regard to the master UCITS or, where applicable, its management company, trustee or auditor, to the competent authority of the feeder UCITS home Member State.
(3) Where the feeder UCITS is authorised by the Bank and the master UCITS is authorised in a different Member State and the Bank receives a communication from the competent authority of the master UCITS home Member State concerning any decision, measure, observation of non-compliance with the conditions of Chapter VIII of Directive 2009/65/EC or information reported pursuant to Article 106(1) of that Directive with regard to the master UCITS or, where applicable, its management company, depositary or auditor, it shall immediately inform the feeder UCITS.
PART 10
Obligations concerning Information to be provided to Investors
Chapter 1
Publication of prospectus and periodical reports
Information to be published by investment or management company
88. (1) An investment company and, for each of the common contractual funds and unit trusts it manages, a management company, shall publish the following
(
a
) a prospectus;
(
b
) an annual report for each financial year; and
(
c
) a half-yearly report covering the first 6 months of the financial year.
(2) The annual and half-yearly reports shall be published within the following time limits, with effect from the end of the period to which they relate
(
a
)4 months in the case of the annual report;
(
b
)2 months in the case of the half-yearly report.
Information to be included in prospectus and periodic reports
89. (1)(
a
) The prospectus shall include the information necessary for investors to be able to make an informed judgement of the investment proposed to them, and, in particular, of the risks attached thereto.
(
b
) The prospectus shall include, independent of the instruments invested in, a clear and easily understandable explanation of the fund’s risk profile.
(2) The prospectus shall contain at least the information provided for in Schedule 11, in so far as that information does not already appear in the trust deed, deed of constitution or articles annexed to the prospectus in accordance with Regulation 91(1).
(3) The annual report shall include a balance-sheet or a statement of assets and liabilities, a detailed income and expenditure account for the financial year, a report on the activities of the financial year and the other information provided for in Schedule 12 as well as any significant information which will enable investors to make an informed judgement on the development of the activities of the UCITS and its results.
(4)(
a
) Notwithstanding section 148(2) of the
Companies Act 1963
, an investment company to which Chapter 1 or 2 of Part 6 applies may, in respect of its individual accounts, opt to prepare those accounts in accordance with—
(i) an alternative body of accounting standards, and
(ii) section 149A of the
Companies Act 1963
,
as if the references in that section 149A to international financial reporting standards were references to that alternative body of accounting standards.
(
b
) In the application of subsections (4), (5) and (6) of
section 148
of the
Companies Act 1963
to an investment company which has opted under subparagraph (
a
) to prepare its accounts in accordance with an alternative body of accounting standards—
(i) the reference in that subsection (4) to international financial reporting standards shall be read as a reference to that alternative body of accounting standards, and
(ii) there shall be substituted for “IFRS”, in each place where it occurs in those subsections (4), (5) and (6), “ABAS” (which shall be read as referring to that alternative body of accounting standards).
(
c
) For the purposes of this Regulation, accounts shall not be regarded as having been prepared in accordance with an alternative body of accounting standards unless the accounts concerned would, were they to have been prepared by a company or undertaking registered in the relevant jurisdiction, be regarded as having been prepared in accordance with those standards.
(
d
) In this Regulation—
“alternative body of accounting standards” means standards that accounts of companies or undertakings shall comply with that are laid down by such body or bodies having authority to lay down standards of that kind in—
(i) United States of America,
(ii) Canada,
(iii) Japan, or
(iv) any other state or territory prescribed for the purposes of the section hereafter mentioned in this paragraph,
as are prescribed under the
Companies Act 1990
for the purposes of section 260A(4) of that Act;
“relevant jurisdiction” means the state or territory in which the alternative body of accounting standards concerned have effect.
(5) The half-yearly report shall include at least the information provided for in paragraphs 1 to 4 of Schedule 12. Where a UCITS has paid or proposes to pay an interim dividend, the figures shall indicate the results after tax for the half-year concerned and the interim dividend paid or proposed.
Provisions supplementary to Regulation 89
90. (1) The prospectus issued by a UCITS in accordance with Regulation 89 shall clearly disclose the categories of assets in which the UCITS is authorised to invest. Where a UCITS is authorised to engage in transactions in financial derivative instruments it shall include a prominent statement to this effect, indicating—
(
a
) whether these operations may be carried out for the purpose of hedging or with the aim of meeting investment goals, and
(
b
) the expected effect of these transactions on the risk profile of the UCITS.
(2) A UCITS which—
(
a
) invests principally in—
(i) deposits,
(ii) UCITS or other collective investment undertakings or both, or
(iii) financial derivative instruments,
or
(
b
) aims to replicate a stock or debt securities index in accordance with Regulation 71,
shall include a prominent statement drawing attention to its investment policy in its prospectus and, where necessary, any other marketing communications.
(3) When the net asset value of a UCITS is likely to have a high volatility due to its portfolio composition or the portfolio management techniques that may be used, a prominent statement drawing attention to this characteristic shall be included in its prospectus and, where necessary, any other marketing communications.
(4) The UCITS management company or investment company shall supply to a unit-holder, on request by him or her, supplementary information in relation to—
(
a
) the quantitative risk management limits applied by it,
(
b
) the risk management methods used by it, and
(
c
) the recent evolution of risks and yields for the main instrument categories with which the UCITS is involved.
Annexation of trust deed, etc. to prospectus, etc
91. (1) Subject to paragraph (2), the trust deed, deed of constitution or articles of an investment company shall form an integral part of the prospectus and shall be annexed thereto.
(2) The documents referred to in paragraph (1) need not be annexed to the prospectus provided that the investor is informed that, on request, he or she will be sent those documents or be informed of the place where, in each Member State in which the units are marketed, he or she may consult them.
(3)(
a
) A preliminary prospectus or similar documentation published by an investment company shall clearly state in a prominent position that—
(i) it does not constitute an offer or invitation to subscribe for or purchase units,
(ii) the document has not been approved or reviewed by the Bank,
(iii) it may not contain all relevant information and that the information contained therein is subject to change and should not be relied upon, and
(iv) the investment company to which it refers has not been authorised by the Bank.
(
b
) In the case of umbrella funds, the prospectus shall clearly state the charges applicable to switching of investments from one sub-fund to another.
Prospectus to be kept up to date
92. The essential elements of the prospectus shall be kept up to date.
Auditing of accounting information
93. The accounting information given in the annual report shall be audited by one or more persons empowered by law to audit accounts in accordance with the Companies Acts. The auditor’s report, including any qualifications, shall be reproduced in full in the annual report.
Prospectus, etc. to be sent to Bank, etc
94. A UCITS authorised by the Bank shall send its prospectus or any amendments thereto, as well as its annual and half-yearly reports, to the Bank. A UCITS shall provide that documentation to the competent authority of its management company’s home Member State on request.
Provision of prospectus, etc. to investors
95. (1) The prospectus and the latest published annual and half-yearly reports shall be provided to investors on request and free of charge.
(2) The prospectus may be provided in a durable medium or by means of a website. A paper copy shall be delivered to investors on request and free of charge.
(3) The annual and half-yearly reports shall be available to investors in the manner specified in the prospectus and in the key investor information referred to in Regulation 98. A paper copy of the annual and half-yearly reports shall be delivered to investors on request and free of charge.
Chapter 2
Publication of other information
Publication of price of units
96. (1) Subject to paragraph (2), a UCITS shall make public in an appropriate manner the issue, sale, repurchase or redemption price of its units each time it issues, sells, repurchases or redeems them, and at least twice a month.
(2) The Bank may, however, permit a UCITS to reduce the frequency to once a month on condition that such derogation does not prejudice the interests of the unit-holders.
Marketing communications to investors
97. All marketing communications to investors shall be clearly identifiable as such. They shall be fair, clear and not misleading. In particular, any marketing communication comprising an invitation to purchase units of UCITS that contains specific information about a UCITS shall make no statement that contradicts or diminishes the significance of the information contained in the prospectus and the key investor information referred to in Regulation 98. It shall indicate that a prospectus exists and that the key investor information referred to in Regulation 98 is available. It shall specify where and in which language such information or documents may be obtained by investors or potential investors or how they may obtain access to them.
Chapter 3
Key investor information
Drawing up of key information for investors
98. (1) An investment company and, for each of the common contractual funds and unit trusts it manages, a management company shall draw up a short document containing key information for investors. That document shall be referred to as “key investor information” in these Regulations. The words “key investor information” shall be clearly stated in that document.
(2) Key investor information shall include appropriate information about the essential characteristics of the UCITS concerned, which is to be provided to investors so that they are reasonably able to understand the nature and the risks of the investment product that is being offered to them and, consequently, to take investment decisions on an informed basis.
(3)(
a
) Key investor information shall provide information on the following essential elements in respect of the UCITS concerned
(i) identification of the UCITS;
(ii) a short description of its investment objectives and investment policy;
(iii) past-performance presentation or, where relevant, performance scenarios;
(iv) costs and associated charges; and
(v) risk/reward profile of the investment, including appropriate guidance and warnings in relation to the risks associated with investments in the relevant UCITS.
(
b
) Those essential elements shall be comprehensible to the investor without any reference to other documents.
(4) Key investor information shall clearly specify where and how to obtain additional information relating to the proposed investment, including but not limited to where and how the prospectus and the annual and half-yearly report can be obtained on request and free of charge at any time, and the language in which such information is available to investors.
(5) Key investor information shall be written in a concise manner and in non-technical language. It shall be drawn up in a common format, allowing for comparison, and shall be presented in a way that is likely to be understood by retail investors.
(6) Key investor information shall be used without alterations or supplements, except for translation, in all Member States where the UCITS is notified to market its units in accordance with Regulation 117.
Pre-contractual information, etc
99. (1) Key investor information shall constitute pre-contractual information. It shall be fair, clear and not misleading. It shall be consistent with the relevant parts of the prospectus.
(2) A person shall not incur civil liability solely on the basis of the key investor information, including any translation of such information, unless it is misleading, inaccurate or inconsistent with the relevant parts of the prospectus. Key investor information shall contain a clear warning in this respect.
Timing of provision of key investor information
100. (1) An investment company and, for each of the common contractual funds and unit trusts it manages, a management company, which sells UCITS directly or through another natural or legal person who acts on its behalf and under its full and unconditional responsibility shall provide investors with key investor information on such UCITS in good time before their proposed subscription of units in such UCITS.
(2) An investment company and, for each of the common contractual funds and unit trusts it manages, a management company, which does not sell UCITS directly or through another natural or legal person who acts on its behalf and under its full and unconditional responsibility to investors shall provide key investor information to product manufacturers and intermediaries selling or advising investors on potential investments in such UCITS or in products offering exposure to such UCITS upon their request. The intermediaries selling or advising investors or potential investors in UCITS shall provide key investor information to their clients or potential clients and comply with Regulation 76 of the MIFID Regulations and, where applicable, Regulation 77 of the MIFID Regulations.
(3) Key investor information shall be provided to investors free of charge.
Medium of provision of key investor information
101. (1) Investment companies and, for each of the common contractual funds and unit trusts they manage, management companies, may provide key investor information in a durable medium or by means of a website. A paper copy shall be delivered to the investor on request and free of charge.
(2) In addition, an up-to-date version of the key investor information shall be made available on the website of the investment company or management company.
UCITS to send key investor information to Bank, etc
102. (1) A UCITS shall send its key investor information and any amendments thereto to the Bank.
(2) The essential elements of key investor information shall be kept up to date.
PART 11General Obligations of UCITS
Borrowing of money by UCITS
103. (1) Subject to paragraphs (2) and (3), neither—
(
a
) an investment company, nor
(
b
) a management company or a trustee acting on behalf of a unit trust or a management company acting on behalf of a common contractual fund,
may borrow money.
(2) A UCITS may acquire foreign currency by means of a “back-to-back” loan.
(3) A UCITS may borrow—
(
a
) not more than 10% of its assets, in the case of an investment company, or not more than 10% of the value of the fund, in the case of a unit trust or a common contractual fund, provided that such borrowing is on a temporary basis, and
(
b
) not more than 10% of its assets, in the case of an investment company, provided that the borrowing is to make possible the acquisition of real property required for the purpose of its business; in this case, the borrowing and the borrowing referred to in subparagraph (
a
) shall not in total exceed 15% of the borrower’s assets.
(4) For the purpose of this Regulation, “assets” and “value of the fund”, in relation to a UCITS, means net assets of a UCITS.
Redemption, etc. at request of unit-holder
104. (1) Subject to Regulation 63(2), a UCITS shall redeem or repurchase units at the request of the unit-holder.
(2)(
a
)(i) Notwithstanding paragraph (1), a UCITS may in the cases and according to the procedure provided in its trust deed, deed of constitution or articles, temporarily suspend the repurchase or redemption of its units.
(ii) Suspension may be provided for only in exceptional cases where circumstances so require and suspension is justified having regard to the interest of the unit-holders.
(
b
) The Bank may require the suspension of the repurchase or redemption of units in the interests of the unit-holders or the public.
(
c
) A UCITS which acts in accordance with subparagraph (
a
)(i) shall without delay communicate its decision to the Bank and to the competent authorities of the Member States in which it markets its units.
Creation and cancellation of units of unit trust or common contractual fund
105. (1) The trustee of a unit trust shall create or cancel units in accordance with the conditions laid down in the trust deed and on receipt of a written instruction from the management company. The trustee may refuse to create or cancel some or all of such units if it is of the opinion that it is not in the interests of participants for such units to be created or cancelled, as the case may be. The management company of a common contractual fund shall create or cancel units in accordance with the conditions laid down in the deed of constitution of the common contractual fund.
(2) The trustee or, in the case of a common contractual fund, the management company shall not create or cancel units during any period in which redemption of units is suspended.
Issue of registered or bearer certificates
106. (1) The management company or the investment company or the trustee shall issue registered certificates or bearer securities representing one or more portions of the UCITS which it manages, or alternatively, in accordance with the provisions of the trust deed, deed of constitution or articles, shall issue written confirmations of entry in the register of units or fractions of units without limitation as to the splitting up of units.
(2) Rights attaching to fractions of units are exercised in proportion to the fraction of a unit held except for possible voting rights which can only be exercised by whole units.
(3) The certificates and bearer securities shall be signed by the management company or the investment company and by the trustee.
(4) Such signatures may be reproduced mechanically.
Winding up of investment company
107. (1) Without prejudice to any other powers of the Bank, the following conditions are prescribed for the purpose of subparagraph (ii) of paragraph (fa) of
section 213
of the
Companies Act 1963
(which relates to the power of the court to wind up an investment company on the grounds that it is just and equitable to do so)
(
a
) the petition for such winding up has been presented by the trustee;
(
b
) the trustee has notified the investment company of its intention to resign as such trustee and 6 or more months have elapsed since the giving of that notification without a trustee having been appointed to replace it;
(
c
) the court, in considering the said petition, has regard to—
(i) any conditions imposed under Regulation 123 in relation to the resignation from office of such a trustee and the replacement by it of another trustee, and
(ii) whether a winding up would best serve the interests of unit-holders in the company;
and
(
d
) the petition for such winding up has been served on the company (if any) discharging, in relation to the investment company, functions of a company referred to in conditions imposed under Regulation 123 as a “management company”.
(2) The trustee of the investment company concerned is specified for the purpose of paragraph (
g
) of
section 215
of the
Companies Act 1963
, in so far as that paragraph applies in relation to the presentation of a petition for the winding up of an investment company on the grounds mentioned in the paragraph.
Value of assets
108. (1) Unless otherwise provided for in the trust deed of a unit trust or the deed of constitution of a common contractual fund or in an investment company’s articles, the value of the assets of a UCITS shall be based, in the case of securities traded on a stock exchange or on a regulated market, on the last known stock exchange or market quotation unless such quotation is not representative. For securities not so quoted, and for securities which are so quoted but for which the latest quotation is not representative, the value shall be based on the probable realisation value which value shall be estimated with care and in good faith.
(2) The assets of a UCITS may only be purchased and sold at prices which are in conformity with the criteria set out in paragraph (1).
(3) The trust deed, the deed of constitution or the articles shall determine the frequency of the calculation of the issue and repurchase price.
Application of income
109. The trust deed, the deed of constitution or the articles shall lay down the conditions and manner of application of income.
Issue and redemption or repurchase of units
110. (1) Units shall be issued or sold at a price arrived at by dividing the net asset value of the UCITS by the number of units outstanding; such price may be increased by duties and charges.
(2) Units shall not be issued unless the equivalent of the net issue price is paid into the assets of the UCITS within the usual time limits. This shall not preclude the distribution of bonus units.
(3) Units shall be redeemed or repurchased at a price arrived at by dividing the net asset value of the UCITS by the number of units outstanding; such price may be decreased by duties and charges.
Loans or guarantees
111. (1) Without prejudice to Regulations 68 and 69, neither—
(
a
) an investment company, nor
(
b
) a management company or trustee acting on behalf of a unit trust or a management company of a common contractual fund,
may grant loans or act as a guarantor on behalf of third parties.
(2) Paragraph (1) shall not prevent such undertakings from acquiring transferable securities, money market instruments or other financial instruments referred to in Regulation 68(1)(
e
), (
g
) and (
h
) which are not fully paid.
Uncovered sales of transferable securities, etc
112. Neither—
(
a
) an investment company, nor
(
b
) a management company or trustee acting on behalf of a unit trust or a management company of a common contractual fund,
may carry out uncovered sales of transferable securities, money market instruments or other financial instruments referred to in Regulation 68(1)(
e
), (
g
) and (
h
).
Umbrella funds
113. Where a UCITS is constituted as an umbrella fund, each sub-fund of the UCITS shall comply with the regulations and conditions governing UCITS.
Remuneration and expenditure
114. (1) The trust deed or the deed of constitution shall prescribe the remuneration and the expenditure which the management company is empowered to charge to a unit trust or a common contractual fund and the method of calculation of such remuneration.
(2) The articles shall prescribe the nature of the cost to be borne by the investment company.
PART 12
Special Provisions Applicable to UCITS which Market their Units in Member States other than those in which they are established
UCITS authorised in another Member State may market units in the State without imposition of additional requirements, etc
115. (1) UCITS that are authorised in another Member State shall be able to market their units within the State without the imposition of any additional requirements upon notification in accordance with Regulation 117 in respect of the scope of these Regulations.
(2) The Bank shall ensure that complete information on the laws, regulations and administrative provisions which do not fall within the scope of these Regulations and which are specifically relevant to the arrangements made for the marketing of units of UCITS, established in another Member State, within the State is easily accessible by electronic means. That information shall be made available in English and shall be provided in a clear and unambiguous manner and be kept up to date.
(3) For the purposes of this Part, a UCITS shall include sub-funds thereof.
(4) The requirements specified in Schedule 13 shall have effect for the purposes of this Regulation.
Provision of facilities in relation to unit-holders
116. A UCITS which markets its units in the State shall satisfy the Bank that adequate measures have been taken to ensure that facilities are available in the State for making payments to unit-holders, repurchasing or redeeming units and making available the information which UCITS are required to provide.
Notification requirements
117. (1)(
a
) Where a UCITS authorised by the Bank proposes to market its units in a Member State other than the State, it shall first submit a notification letter to the Bank.
(
b
) The notification letter shall include information on arrangements made for marketing units of the UCITS in the host Member State, including, where relevant, in respect of share classes. In the context of Regulation 26(1), it shall include an indication that the UCITS is marketed by the management company that manages the UCITS.
(2) A UCITS shall enclose with the notification letter, as referred to in paragraph (1), the latest version of the following
(
a
) its fund rules or its instruments of incorporation, its prospectus and, where appropriate, its latest annual report and any subsequent half-yearly report translated in accordance with Regulation 118(1)(
b
)(iii) and (iv); and
(
b
) its key investor information referred to in Regulation 98, translated in accordance with Regulation 118(1)(
b
)(iii) and (iv).
(3)(
a
) The Bank shall verify whether the documentation submitted by the UCITS in accordance with paragraphs (1) and (2) is complete.
(
b
) The Bank shall transmit the complete documentation referred to in paragraphs (1) and (2) to the competent authority of the Member State in which the UCITS proposes to market its units, not later than 10 working days of the date of receipt of the notification letter accompanied by the complete documentation provided for in paragraph (2). The Bank shall enclose with the documentation an attestation that the UCITS fulfils the conditions imposed by these Regulations.
(
c
) Upon the transmission of the documentation, the Bank shall immediately notify the UCITS about the transmission. The UCITS may access the market of the UCITS host Member State as from the date of that notification.
(4) The notification letter referred to in paragraph (1) and the attestation referred to in paragraph (3) shall be provided in the English language, unless the Bank and the host Member State concerned agree to that notification letter and that attestation being provided in an official language of both Member States.
(5) Where the competent authority of another Member State is transmitting the documents referred to in Article 93 of Directive 2009/65/EC, the Bank shall accept the electronic transmission and filing of those documents.
(6) For the purpose of the notification procedure set out in Article 93 of Directive 2009/65/EC and where a UCITS authorised in another Member State proposes to market its units in the State, the Bank shall not request any additional documents, certificates or information other than those provided for in that Article.
(7) The Bank shall ensure that the competent authority of the UCITS host Member State have access, by electronic means, to the documents referred to in paragraph (2) and, if applicable, to any translations of such documents. The Bank shall ensure that the UCITS, authorised by the Bank, keeps those documents and translations up to date. The UCITS shall notify any amendments to the documents referred to in paragraph (2) to the competent authority of the UCITS host Member State and shall indicate where those documents can be obtained electronically.
(8) In the event of a change in the information regarding the arrangements made for marketing communicated in the notification letter in accordance with paragraph (1), or a change regarding share classes to be marketed, the UCITS shall give notice in writing of such change to the competent authority of the host Member State before implementing the change.
(9) The requirements specified in Schedule 14 shall have effect for the purposes of this Regulation.
Information for investors in host Member State
118. (1)(
a
) Where a UCITS, authorised by the Bank, markets its units in a UCITS host Member State, it shall provide to investors within the territory of such Member State all information and documents which it is required pursuant to Part 10 to provide to investors in the State.
(
b
) Such information and documents shall be provided to investors in compliance with the following
(i) without prejudice to Part 10, such information or documents shall be provided to investors in the way prescribed by the laws, regulations or administrative provisions of the UCITS host Member State;
(ii) key investor information referred to in Regulation 98 shall be translated into the official language, or one of the official languages, of the UCITS host Member State or into a language approved by the competent authority of that Member State;
(iii) information or documents other than key investor information referred to in Regulation 98 shall be translated, at the choice of the UCITS, into the official language, or one of the official languages, of the UCITS host Member State, into a language approved by the competent authority of that Member State or into a language customary in the sphere of international finance; and
(iv) translations of information or documents under clauses (ii) and (iii) shall be produced under the responsibility of the UCITS and shall faithfully reflect the content of the original information.
(
c
) Where a UCITS authorised in another Member State markets its units in the State, it shall distribute within the State in at least one of the State’s official languages all information and documents which are required to be published under these Regulations. Translations of information or documents shall be produced under the responsibility of the UCITS and shall faithfully reflect the content of the original information.
(2) The requirements set out in paragraph (1) shall also be applicable to any changes to the information and documents referred therein.
(3) The frequency of the publication of the issue, sale, repurchase or redemption price of units of UCITS authorised by the Bank according to Regulation 96 shall be subject to the laws, regulations and administrative provisions of the State.
Legal form of designation of UCITS
119. For the purpose of pursuing its activities, a UCITS may use the same reference to its legal form (such as investment company, unit trust or common contractual fund) in its designation in the State as it uses in the Member State where it is authorised.
Power of Bank to prohibit marketing
120. The Bank may prohibit the marketing in the State of the units of a UCITS authorised in another Member State if it fails to comply with the provisions of this Part. Any decision taken by the Bank in this regard shall be notified to the UCITS concerned and to the competent authority of the Member State in which the UCITS is authorised.
PART 13
Provisions Concerning Authorities Responsible for Authorisation and Supervision
Establishment of Bank as competent authority
121. (1) The Bank is the competent authority in the State for the purposes of the Directive and these Regulations and shall have all the powers necessary for the performance of its functions.
(2) The Bank may arrange for its functions as a competent authority to be performed by any constituent part of the Bank or by any officer or employee of the Bank. Nothing in these Regulations precludes the Bank from being assisted in, or advised on, the discharge of those functions by any such constituent part, officer or employee.
Liability of Bank and the State
122. (1)(
a
) The authorisation of a UCITS by the Bank shall not constitute a warranty as to the performance of a UCITS and neither the Bank nor the State shall be liable for the performance or default of a UCITS.
(
b
) Neither the Bank nor any of its employees or officers or any member of its Board shall be liable in damages for anything done or omitted in the discharge or purported discharge of any of its functions under these Regulations unless it is shown that the act or omission was in bad faith.
(2) The authorisation, supervision, regulation or revocation of authorisation of a management company under these Regulations shall not constitute a warranty as to the solvency or performance of such management company and neither the Bank nor the State shall be liable in respect of any loss or losses incurred through the insolvency, default or performance of the management company.
Powers of Bank
123. (1) The Bank shall have all supervisory and investigatory powers that are necessary for the exercise of their functions. Such powers shall be exercised—
(
a
) directly,
(
b
) in collaboration with other authorities,
(
c
) under the responsibility of the competent authorities, by delegation to entities to which tasks have been delegated, or
(
d
) by application to the courts.
(2) Under paragraph (1), the Bank shall have the power, at least, to—
(
a
) access any document in any form and receive a copy of such document,
(
b
) require any person to provide information and, if necessary, to summon and question a person with a view to obtaining information,
(
c
) carry out on-site inspections,
(
d
) require existing telephone and existing data traffic records,
(
e
) require the cessation of any practice that is contrary to the provisions adopted in the implementation of these Regulations,
(
f
) request the freezing or the sequestration of assets,
(
g
) request the temporary prohibition of professional activity,
(
h
) require authorised investment companies, management companies or trustees to provide information,
(
i
) adopt any type of measure to ensure that investment companies, management companies or trustees continue to comply with the requirements of these Regulations or the Directive,
(
j
) require the suspension of the issue, repurchase or redemption of units in the interest of the unit-holders or of the public,
(
k
) withdraw the authorisation granted to a UCITS, a management company or a trustee,
(
l
) refer matters for criminal prosecution, and
(
m
) allow auditors or experts to carry out verifications or investigations.
(3) The Bank may impose such supervisory and reporting requirements or conditions relating to the business of a management company, investment company or trustee to which these Regulations apply as the Bank considers appropriate and prudent from time to time for the purposes of the orderly and proper regulation of UCITS in accordance with these Regulations.
(4) Requirements or conditions imposed under paragraph (3) may be imposed generally or on a particular management company, investment company or trustee or by reference to particular groups or classes of management company, investment company or trustee as the Bank considers appropriate and prudent for the purposes of the orderly and proper regulation of UCITS in accordance with these Regulations.
(5) Without prejudice to paragraphs (3) and (4), requirements or conditions imposed by the Bank on one or more UCITS may make provision for any or all of the following matters
(
a
) the prudential requirements of the investment policies of the UCITS;
(
b
) prospectuses and other information disseminated by the UCITS;
(
c
) such other supervisory and reporting requirements and conditions relating to its business as the Bank considers appropriate and prudent to impose on the UCITS from time to time for the purposes of its or their orderly and proper regulation
(
d
) with respect to the collective portfolio management activity of management companies and investment companies that do not designate a management company
(i) prudential rules and
(ii) a code of conduct.
(6) A UCITS shall comply with any requirements or conditions relating to its authorisation or business imposed by the Bank.
(7) Supervisory and reporting requirements and conditions imposed under paragraph (3), including conditions relating to the investment policies of UCITS, may be additional to or stricter than those contained in these Regulations.
Register of authorised UCITS
124. (1) The Bank shall, within 21 days after the date of the authorisation of a UCITS or management company, publish a notice to that effect in Iris Oifigiúil.
(2) The Bank shall maintain a register or registers of all UCITS and management companies which it has authorised under these Regulations and whose authorisation has not been revoked.
(3) The Bank shall also maintain a register or registers of management companies providing services or which have a branch in the State of which the Bank has been informed by a competent authority in another member State in accordance with the Directive.
(4) The Bank shall revise these registers at such intervals as the Bank deems appropriate but not less frequently than once a year. The Bank shall publish these registers which may be held in electronic form.
(5) The registers of management companies shall include the names, addresses and contact details of all management companies and such other particulars as the Bank may decide from time to time.
(6) In the case of a management company these registers shall include details of the services which the management company has been authorised to provide.
(7) The Bank shall arrange that registers of all UCITS and management companies, or a copy or copies thereof, shall be open for inspection in a single location by any member of the public at all reasonable times on the payment of such fee as the Bank may specify or approve.
Keeping of books and records
125. (1) Every management company, investment company or trustee of a UCITS shall keep at an office or offices within the State such books and records (including accounts) as may be specified from time to time by the Bank in the due discharge by the Bank of its statutory functions and shall notify the Bank of the address of every office at which any such book or record is kept for the purposes of this Regulation.
(2) Different books and records may be specified by the Bank for the purposes of this Regulation in relation to different UCITS.
(3) A responsible authority may, in writing, appoint a qualified person to exercise the powers conferred by paragraph (4).
(4)(
a
) To enable the Bank to perform its statutory functions, an authorised person may, on producing the person’s authorisation, at any reasonable time, inspect and take copies of, and make such enquiries as the person considers necessary in relation to—
(i) the records kept under this Regulation by the management company, investment company or trustee of an authorised UCITS, and
(ii) any accounting records relating to the management company, investment company or trustee and kept under the Companies Acts, and
(iii) any other documents relating to the business of the UCITS.
(
b
) For those purposes the authorised person may enter any office to which paragraph (1) relates and any other place where the person reasonably believes any such records are kept.
(5) A person who has possession of, or control over, records referred to in paragraph (4) shall, at the request of an authorised person—
(
a
) produce the records to that person and permit that person to inspect and take copies of them,
(
b
) give any information that that person reasonably requires with respect to the records, and
(
c
) give such other assistance and information to that person as is reasonable in the circumstances.
(6) Paragraphs (4) and (5) apply to every management company, investment company and trustee of a UCITS. When an inspection of the management company, investment company or trustee of a UCITS is being or proposed to be undertaken, those paragraphs (other than paragraph (4)(
a
)) also apply to—
(
a
) every associated enterprise of the management company, investment company and trustee, and
(
b
) any other person,
if an inspection of the accounts or other records of that enterprise or other person is, in the opinion of the Bank, materially relevant to the proper appraisal of the business of the UCITS.
(7) Books and records kept pursuant to this Regulation shall—
(
a
) be in addition to any books or other records to be kept by or under any other enactment, and
(
b
) be retained for at least such period as the Bank may specify in respect of any such book or record.
(8) In this Regulation—
“associated enterprise”, in relation to the management company, investment company or trustee of a UCITS, means—
(
a
) a holding company of the management company, investment company or trustee,
(
b
) a subsidiary company of the management company or investment company or trustee,
(
c
) a company that is a subsidiary of a body corporate, where the management company, investment company or trustee is also a subsidiary of the body corporate, but neither company is a subsidiary of the other,
(
d
) any other body corporate that is not a subsidiary of the management company, investment company or trustee but in respect of which the management company, investment company or trustee is beneficially entitled to more than 20% in nominal value of either the allotted share capital or of the shares carrying voting rights (other than voting rights that arise only in specified circumstances) in that other body corporate, or
(
e
) a partnership in which the management company, investment company or trustee has an interest, and whose business is or, at the relevant time, was, in the opinion of the Bank, materially relevant to any inspection of the management company, investment company or trustee being carried out or proposed to be carried out under this Regulation;
“authorised person” means a person appointed under paragraph (3);
“holding company” has the meaning given to it by
section 155
of the
Companies Act 1963
;
“qualified person” means—
(
a
) a Director, officer or employee of the Bank, or
(
b
) in relation to any particular inspection (including a proposed inspection), any other person who in the opinion of the responsible authority possesses appropriate qualifications or experience to carry out the inspection to which this Regulation relates, or any part of that inspection;
“records” includes books and any other documents and—
(
a
) any information kept in a non-legible form (whether electronically or otherwise) that is capable of being reproduced in a legible form, and
(
b
) the electronic or other means by which the information is capable of being reproduced;
“responsible authority” means the Governor of the Bank;
“statutory functions” means functions under these Regulations;
“subsidiary company” has the meaning given by
section 155
of the
Companies Act 1963
.
Furnishing of information to Bank
126. (1) A management company, an investment company and a trustee shall each furnish the Bank—
(
a
) at such times as the Bank may specify from time to time, such information and returns concerning the business to which the authorisation relates or the carrying on of a business as aforesaid by such person, as the case may be, as the Bank may specify from time to time, being information and returns which the Bank considers it necessary to have for the due performance of its statutory functions; and
(
b
) within such period as the Bank may specify, any information and returns (not being information or returns specified under paragraph (
a
) of this Regulation) concerning the business to which the authorisation relates or the carrying on of a business as aforesaid by such person, as the case may be, that the Bank may request in writing, being information and returns which the Bank considers it necessary to have for the due performance of its statutory functions.
(2) Paragraph (1) shall apply to the business of an associated enterprise to the extent only that the information and returns sought by the Bank are, in the opinion of the Bank, materially relevant to the proper appraisal of the business of the holder of the authorisation to which the associated enterprise relates.
Application by Bank to High Court
127. (1) Where, on an application made in a summary manner by the Bank, the court is of the opinion that there has occurred or is occurring a failure by an authorised UCITS to comply with a requirement or condition imposed by virtue of these Regulations the court may, by order, prohibit the continuance of the failure by the UCITS concerned.
(2) The court when considering the matter may make such interim or interlocutory order as it considers appropriate.
(3) Where the court is satisfied, because of the nature or the circumstances of the case or otherwise in the interests of justice, that it is desirable, the whole or any part of the proceedings under this Regulation may be heard otherwise than in public.
Replacement of management company or trustee
128. (1) Without prejudice to
section 8
of the
Unit Trusts Act 1990
, the Bank may replace a management company or trustee with another management company or trustee where—
(
a
) it is satisfied that the management company or trustee has failed to demonstrate the competence, probity or experience in the discharge of its functions reasonably required of it,
(
b
) it is satisfied that the management company or trustee is not of sufficiently good repute,
(
c
) it is satisfied that it is undesirable in the interests of the unit-holders that the management company or trustee remain as management company or trustee, or
(
d
) without prejudice to subparagraph (
c
), it is satisfied that the management company or trustee—
(i) has contravened any provision of these Regulations,
(ii) in purported compliance with any such provision, has furnished the Bank with false, inaccurate or misleading information, or
(iii) has contravened any prohibition or requirement imposed under these Regulations.
(2) Upon replacement by the Bank under this Regulation of a management company or trustee, the management company or trustee shall cease to act for the UCITS, and the powers and duties of the management company or trustee shall be exercised and carried out by the new management company or trustee, as the case may be.
(3) The Bank may, by application to the court, seek such interim or interlocutory relief preventing a management company or trustee from acting as such or appointing a person to carry out their functions and the court on such application, having regard to the matters specified in paragraph (1) and the protection of the unit-holders, may make such order as it deems appropriate.
(4) Where the Bank proposes to replace the management company or trustee, it shall give the management company or trustee notice of its intention to do so, which notice shall contain a statement of the reasons for which the Bank proposes to act and of the right of the management company or trustee under paragraph (5) to make representations.
(5) A management company or trustee on whom a notice is given under paragraph (4) may, within 15 days from the date on which such notice is given, make representations in writing to the Bank.
(6) The Bank shall have regard to any representations made to it in accordance with paragraph (5) in determining whether or not to replace the management company or trustee.
Revocation of authorisation
129. (1) The Bank may revoke the authorisation of a UCITS if it appears to the Bank—
(
a
) that any of the requirements for the authorisation of the UCITS are no longer satisfied,
(
b
) that it is undesirable in the interests of the unit-holders or potential unit-holders that the UCITS should continue to be authorised,
(
c
) without prejudice to subparagraph (
b
), that the management company or investment company or trustee of the UCITS has seriously or systematically contravened any provision of these Regulations or, in purported compliance with any such provision, has furnished the Bank with false, inaccurate or misleading information or has contravened any prohibition or requirement imposed under these Regulations, or
(
d
) that the UCITS has not made use of the authorisation within 12 months of the date on which it was authorised under these Regulations, or has failed to operate as a UCITS for a period of more than 6 months.
(2) For the purposes of making a determination to revoke the authorisation of a UCITS pursuant to subparagraph (1)(
b
), the Bank may take into account any matter relating to—
(
a
) the unit trust, common contractual fund, management company, investment company or trustee,
(
b
) a director or controller of the management company, investment company or trustee, or
(
c
) any person employed by or associated with the management company, investment company or trustee in connection with the UCITS.
(3) The Bank may revoke the authorisation of a UCITS at the request of the management company or investment company or trustee of the UCITS. However, it may refuse to do so if it considers that any matter concerning the UCITS should be investigated as a preliminary to a decision on the question of whether the authorisation should be revoked or that revocation would not be in the interests of the unit-holders.
Notice of intention to revoke
130. (1) Where the Bank proposes to revoke the authorisation of a UCITS otherwise than at the request of the management company, investment company or trustee of the UCITS, it shall give the applicants or, as the case may be, the management company, investment company or trustee of the UCITS, as the case may be, notice in writing of its intention to do so, stating the reasons for which it proposes to act and giving particulars of the rights conferred by paragraph (2).
(2) A management company, investment company or trustee on whom a notice is served under paragraph (1) may, within 15 days of the date of service, make representations in writing to the Bank.
(3) The Bank shall have regard to any representations made in accordance with paragraph (2) in determining whether to refuse the application or revoke the authorisation, as the case may be.
Directions by Bank
131. (1) Where the Bank is of the opinion that—
(
a
) it is in the public interest to do so,
(
b
) it is in the interests of the orderly and proper regulation of UCITS,
(
c
) any of the requirements for authorising a UCITS are no longer satisfied, or
(
d
) the management company, investment company or trustee of such a UCITS—
(i) has become or is likely to become unable to meet its obligations to its creditors,
(ii) has contravened any provision of these Regulations, or has failed to comply with any condition or requirement imposed under these Regulations by the Bank, or in purported compliance with any such provision, has provided the Bank with information that it knows to be false, inaccurate or misleading,
(iii) is not maintaining adequate capital resources having regard to the volume and nature of its business, or
(iv) no longer complies with the capital or other financial requirements imposed by the Bank from time to time,
the Bank may give a direction in writing to the management company, investment company or trustee requiring it to take such steps (including the winding-up of the UCITS or the suspension of the issue or redemption of units of the UCITS, or both) from a date specified in that direction until such further date as is specified in that direction, or in another direction, as the Bank considers necessary in the interests of the orderly and proper regulation of UCITS or for the protection of unit-holders or creditors of the UCITS.
(2) Where a direction under paragraph (1) affects a particular UCITS, the UCITS shall immediately notify its unit-holders of the terms of the direction.
(3) The revocation of the authorisation of a UCITS does not affect the operation of a direction given under paragraph (1) that is then in force. A direction may be given under that paragraph in relation to a UCITS whose authorisation has been revoked so long as a direction under that paragraph was already in force at the time of revocation.
(4) For the purposes of paragraph (1), the Bank may take into account any matter relating to the UCITS, management company, investment company, trustee or any person employed by or associated with the management company, investment company or trustee in connection with the UCITS.
(5) The Bank may revoke a direction under paragraph (1) unless an order under paragraph (10) has been made in respect of that direction.
(6) A direction of the Bank given under paragraph (1) is an appealable decision for the purposes of Part VIIA of the
Central Bank Act 1942
(No. 22 of 1942) at the instance of—
(
a
) a management company, investment company or trustee to which the direction relates, or
(
b
) any creditor who is affected by the direction.
(7) A direction given under paragraph (1) ceases to have effect—
(
a
) when the period specified in the direction expires,
(
b
) if, on the hearing of an appeal against the direction by the Irish Financial Services Appeals Tribunal, the Tribunal confirms the direction but varies the period, when that period expires, or
(
c
) on the making of a winding-up order in respect of the UCITS, or with the sanction of the court, the dissolution of the UCITS, whichever occurs first.
(8) Where the Bank is of the opinion that, even if the management company, investment company or trustee concerned appears to be able to meet its obligations to its creditors, the circumstances giving rise to the direction are likely to continue to exist after the giving of direction, it may give a further direction in writing to the UCITS or management company or trustee as the case may be requiring it—
(
a
) to prepare, in consultation with the Bank, a scheme for the orderly termination of its business and the discharge of its liabilities, and
(
b
) to submit the scheme to the Bank for its approval within 3 months after its preparation.
(9) Where a management company, investment company or trustee of a UCITS—
(
a
) has failed, or is failing, to comply with a direction given by the Bank under paragraph (8), or
(
b
) has failed, or is failing, to comply with a scheme approved by the Bank under that paragraph, the court may, on the application of the Bank, make such order as it considers appropriate (including an order of committal or a winding-up order on the grounds that it is just and equitable that the UCITS, management company or trustee be wound up).
(10) The court may, on application under paragraph (9) hear evidence from creditors, and the court may make such interim or interlocutory order, as it considers appropriate.
(11) While a direction under paragraph (1) is in force—
(
a
) the UCITS to which it relates may not be dissolved, and
(
b
) the court may, by order, restrain any disposal of the assets of the UCITS on the ground that such a disposal could have the effect of perpetrating a fraud on the UCITS, its creditors or unit-holders.
Penalties
132. (1) An investment company, proposed management company or management company which, or a trustee or any person who, contravenes any provision of these Regulations is guilty of an offence.
(2) An auditor who contravenes any provision of these Regulations is guilty of an offence.
(3) A person who contravenes the conditions of professional secrecy imposed by these Regulations is guilty of an offence.
(4) A person who, in purported compliance with a provision of these Regulations or a requirement under these Regulations—
(
a
) knowingly or recklessly provides an answer or explanation, makes a statement, or produces information, to the Bank that is false or misleading in a material particular, or
(
b
) knowingly omits or withholds material information from the Bank,
is guilty of an offence.
(5) A person who destroys, mutilates or falsifies, or is privy to the destruction, mutilation or falsification of, any record or document required under these Regulations, or makes or is privy to the making of a false entry therein, is guilty of an offence.
(6) It shall be a defence for a person prosecuted for an offence under paragraph (5) to prove that he or she had no intention to defeat the law.
(7) A person who fraudulently disposes of, alters or makes an omission in any record or document referred to in paragraph (5), or who is privy to such disposal of, altering or making of an omission in any such record or document, is guilty of an offence.
(8) A person guilty of an offence under paragraph (1), (2), (3), (4), (5) or (7) is liable—
(
a
) on summary conviction, to a class A fine or imprisonment for a term not exceeding 6 months or both, or
(
b
) on conviction on indictment, to a fine not exceeding €500,000 or imprisonment for a term not exceeding 3 year or both.
(9) Summary proceedings in relation to an offence under these Regulations may be brought and prosecuted by the Director of Public Prosecutions or the Bank.
(10) Notwithstanding section 10(4) of the Petty Sessions (Ireland) Act 1851 (14 &15 Vict. c. 93), summary proceedings for an offence under these Regulations to which that provision applies may be instituted—
(
a
) within 12 months from the date on which the offence was committed, or
(
b
) within 6 months from the date on which evidence sufficient, in the opinion of the person instituting the proceedings, to justify the proceedings comes to that person’s knowledge,
whichever is the later, provided that no such proceedings shall be commenced later than 2 years from the date on which the offence concerned was committed.
(11) For the purposes of paragraph (10)(
b
), a certificate signed by or on behalf of the person initiating the proceedings as to the date on which evidence referred to in that paragraph came to his or her knowledge shall be evidence of that date and, in any legal proceedings, a document purporting to be a certificate under this paragraph and to be so signed shall be admitted as evidence without proof of the signature of the person purporting to sign the certificate, unless the contrary is shown.
(12) Where an offence under these Regulations is committed by a body corporate or by a person purporting to act on behalf of a body corporate or on behalf of an unincorporated body of persons, and is proved to have been committed with the consent or connivance, or to be attributable to any wilful neglect, of a person who, when the offence is committed, is—
(
a
) a director, manager, secretary or other officer of the body, or a person purporting to act in that capacity, or
(
b
) a member of the committee of management or other controlling authority of the body, or a person purporting to act in that capacity,
that person is taken to have also committed the offence and may be proceeded against and punished accordingly.
Collaboration with competent authorities in other Member States
133. (1)(
a
) The Bank shall cooperate with the competent authorities of other Member States whenever necessary for the purpose of carrying out their duties or of exercising their powers under these Regulations.
(
b
) The Bank shall cooperate with other competent authorities even in cases where the conduct under investigation does not constitute an infringement of any regulation in force in the State.
(2) The Bank shall immediately provide other competent authorities with the information required for the purposes of carrying out their duties under these Regulations or the Directive.
(3)(
a
) Where the Bank has good reason to suspect that acts contrary to the provisions of these Regulations and the Directive, are being or have been carried out by entities not subject to the Bank’s supervision on the territory of another Member State, it shall notify the competent authority of the other Member State thereof in as specific a manner as possible.
(
b
) Where the Bank receives notification of the nature described in subparagraph (
a
) from the competent authority of another Member State, it shall take appropriate action, shall inform the notifying competent authority of the outcome of that action and, to the extent possible, of significant interim developments.
(4) The Bank may request the cooperation of the competent authority of another Member State, or vice versa, in a supervisory activity or for an on-the-spot verification or in an investigation on the territory of the latter within the framework of their powers pursuant to these Regulations or the Directive. Where the Bank receives a request with respect to an on-the-spot verification or investigation, it shall—
(
a
) carry out the verification or investigation itself,
(
b
) allow the requesting authority to carry out the verification or investigation, or
(
c
) allow auditors or experts to carry out the verification or investigation.
(5)(
a
) Where the verification or investigation is carried out in the State by the Bank, the Bank may, upon request from the other competent authority, permit officials of the competent authority of the Member State which has requested cooperation to accompany the Bank’s officials carrying out the verification or investigation. The verification or investigation shall, however, be subject to the overall control of the Bank.
(
b
) Where the verification or investigation is carried out in the State by a competent authority of another Member State, the Bank may request that its own officials accompany the officials carrying out the verification or investigation.
(6) The Bank may refuse to exchange information as provided for in paragraph (2) or to act on a request for cooperation in carrying out an investigation or on-the-spot verification as provided for in paragraph (4), only where—
(
a
) such an investigation, on-the-spot verification or exchange of information might adversely affect the sovereignty, security or public policy of the State,
(
b
) judicial proceedings have already been initiated in respect of the same persons and the same actions before the authorities of the State, or
(
c
) final judgment in respect of the same persons and the same actions has already been delivered in the State.
(7) The Bank shall notify the requesting competent authority of any decision taken under paragraph (6). That notification shall contain information about the motives of the Bank’s decision.
(8) The Bank may bring to the attention of the European Securities and Markets Authority established by Regulation (EU) No. 1095/2010 of the European Parliament and of the Council of 24 November 2010 establishing a European Supervisory Authority (European Securities and Markets Authority), amending Decision No. 716/2009/EC and repealing Commission Decision 2009/77/EC
14
, situations where a request—
(
a
) to exchange information as provided for in Regulation 136 has been rejected or has not been acted upon within a reasonable time,
(
b
) to carry out an investigation or on-the-spot verification as provided for in Regulation 137 has been rejected or has not been acted upon within a reasonable time, or
(
c
) for authorisation for its officials to accompany those of the competent authority of the other Member State has been rejected or has not been acted upon within a reasonable time.
Reports by auditor of UCITS
134. (1) Where the auditor of a UCITS which has been authorised by the Bank—
(
a
) has reason to believe that the information provided to investors or to the Bank in the reports or other documents of the UCITS does not truly describe the financial situation and the assets and liabilities of the UCITS,
(
b
) has reason to believe that the assets of the UCITS are not or have not been invested in accordance with these Regulations or the prospectus or the trust deed or the deed of constitution or the articles,
(
c
) has reason to believe that there exist circumstances which are likely to affect materially the ability of the UCITS to fulfil its obligations to unit-holders or meet any of its financial obligations under these Regulations,
(
d
) has reason to believe that there are material defects in the financial systems and controls or accounting records of the UCITS,
(
e
) has reason to believe that any fact or decision concerning a UCITS is liable to—
(i) constitute a material breach of the laws, regulations or administrative provisions which lay down the conditions governing authorisation or which specifically govern pursuit of the activities of UCITS,
(ii) affect the continuous functioning of the UCITS, or
(iii) lead to a refusal by the auditor to certify the accounts of the UCITS or to the expression of qualifications by the auditor,
(
f
) has reason to believe that there are material inaccuracies in or omissions from any returns of a financial nature made by the UCITS to the Bank, or
(
g
) proposes to qualify any certificate which he or she is to provide in relation to financial statements or returns of the UCITS under the Companies Acts or these Regulations,
he or she shall report the matter to the Bank in writing without delay.
(2)(
a
) The auditor of an authorised UCITS shall report to the Bank any facts or decisions referred to in paragraph (1)(
e
) of which the auditor becomes aware while conducting an audit of an undertaking which has close links resulting from a control relationship with the UCITS concerned.
(
b
) For the purposes of this paragraph, “close links” includes, in addition to the definition in Regulation 3(1) of “close links”, an arrangement whereby 2 or more natural or legal persons are permanently linked to one and the same person by a control relationship.
(3) Where the auditor of a UCITS which has been authorised by the Bank proposes to resign or not to seek re-election or re-appointment as auditor, he or she shall notify the Bank in writing to that effect without delay.
(4) The auditor of an authorised UCITS shall, where requested by the Bank, furnish to the Bank a report stating whether in his or her opinion and to the best of his or her knowledge the UCITS has or has not complied with a specified obligation of a financial nature under these Regulations.
(5) Where the auditor of an authorised UCITS so requests, the Bank shall provide to the auditor details in writing of such returns of a financial nature to the Bank by the UCITS as the auditor requests for the purpose of enabling him or her to exercise his or her functions under these Regulations.
(6) The auditor of an authorised UCITS shall send to the UCITS a copy of any report made by him or her to the Bank under paragraph (1) or (4).
(7)(
a
) Whenever the Bank is of the opinion that the exercise of its functions under these Regulations or the protection of the interests of unit-holders or shareholders so requires, it may require the auditor of an authorised UCITS to supply it with such information as it may specify in relation to the audit of the business of the UCITS and the auditor shall comply with the requirement.
(
b
) The Bank may require that, in supplying information for the purposes of this paragraph, the auditor shall act independently of the authorised UCITS.
(8) No duty to which the auditor to an authorised UCITS may be subject shall be regarded as contravened and no liability to the UCITS, or its unit-holders, creditors or other interested parties, shall attach to the auditor by reason of his or her compliance with any obligation imposed on him or her or under these Regulations.
(9) Any communication made in good faith to the Bank by an auditor under paragraph (1)(
e
) or (2) shall not constitute a breach of any restriction on disclosure of information imposed by contract or by any legislative, regulatory or administrative provision and shall not involve the auditor in liability of any kind.
(10) The requirements of this Regulation shall apply, with all necessary modifications, to auditors of a management company.
Bank to give reasons for decisions, etc
135. (1) The Bank shall give reasons in writing for any decision to refuse authorisation, or any negative decision taken in the implementation of the general measures adopted in application of these Regulations or the Directive, and communicate them to applicants.
(2) Any decision taken under the laws, regulations or administrative provisions adopted in accordance with these Regulations shall be properly reasoned. The following decisions of the Bank are appealable decisions for the purposes of Part VIIA of the
Central Bank Act 1942
(
a
) a decision refusing an application for authorisation under Regulation 10(1) or (2) or 17(2);
(
b
) a failure to decide an application within the period prescribed by Regulation 11 or 17(11);
(
c
) a decision revoking or refusing an application to revoke an authorisation;
(
d
) a decision replacing or proposing to replace a management company or trustee under Regulation 128;
(
e
) a failure to communicate information to the competent authority of a host Member State under Regulation 27(2).
(3) Any of the following bodies may, in the interests of consumers and in accordance with national law, take action before the courts or competent administrative bodies to ensure that the national provisions for the implementation of the Directive are applied
(
a
) public bodies or their representatives;
(
b
) consumer organisations having a legitimate interest in protecting consumers;
(
c
) professional organisations having a legitimate interest in protecting their members.
(4) A decision by the Bank to refuse an authorised UCITS situated in another Member State permission to market its units in the State or to prohibit further marketing in the State is an appealable decision for the purposes of Part VIIA of the
Central Bank Act 1942
.
(5) A decision by the Bank acting as the competent authority of the host Member State is an appealable decision for the purposes of Part VIIA of the
Central Bank Act 1942
.
Exchange of information with other competent authorities
136. (1) In so far as it is necessary for the purpose of exercising their powers of supervision, the Bank shall exchange information with the other competent authorities regarding any measures taken pursuant to Regulation 32(5), which involves penalties imposed on a management company or restrictions on a management companys activities.
(2) The Bank shall, without delay, notify the competent authority of the UCITS home Member State of any problem identified at the level of the management company which may materially affect the ability of the management company to perform its duties properly with respect to the UCITS or of any breach of the requirements under Part 4.
(3) Where the Bank is the competent authority of the UCITS home Member State, the Bank shall, without delay, notify the competent authority of the management company’s home Member State of any problem identified at the level of the UCITS which may materially affect the ability of the management company to perform its duties property or to comply with the requirements of these Regulations.
(4) The Bank shall, without delay, notify the competent authority of a UCITS host Member State and, if the management company of a UCITS is established in another Member State, the competent authority of the management company’s home Member State of any decision to withdraw authorisation, or any other serious measure taken against a UCITS authorised by the Bank, or any suspension of the issue, repurchase or redemption of units imposed upon it.
Investigation by competent authority in another Member State of management company authorised by Bank
137. (1) A competent authority in another Member State authorised in that Member State to supervise a management company may, having notified the Bank, inspect or investigate the business of a management company authorised by the Bank which has a place of business in the State at that place of business or otherwise for the purpose of verifying any information of the type referred to in Regulations 133 and 136(1) in any one of the following manners
(
a
) by inspection of the management company, at that place of business or otherwise, by the authority concerned;
(
b
) by inspection of the management company, at that place of business or otherwise, by a person authorised in that capacity by the authority concerned;
(
c
) by a request from the authority concerned to the Bank to carry out the inspection on its behalf at that place of business or otherwise.
(2) This Regulation shall not affect the right of the Bank, in discharging its responsibilities under these Regulations, to inspect or investigate the business of a management company’s branch established within the State.
PART 14
Derogations, Transitional and Final Provisions
Transitional provisions applicable to existing investment firms and management companies
138. (1) Investment firms, as defined in Regulation 3(1) of the MIFID Regulations, authorised to carry out only the services provided for in Schedule 1, Part 1 (4) and (5) of those Regulations, may obtain authorisation under these Regulations to manage UCITS as management companies. In that case, such investment firms shall give up the authorisation obtained under the MIFID Regulations.
(2) A UCITS shall comply with Regulation 98, and the other provisions of these Regulations relating to key investor information referred to in that Regulation, before 1 July 2012.
(3) A UCITS authorised before 1 July 2011 shall, until it is in compliance with Regulation 98, and the other provisions of these Regulations relating to key investor information referred to in that Regulation, as required under paragraph (2), comply with the requirements specified in Schedule 15.
Revocations, etc
139. (1) The European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2003 (
S.I. No. 211 of 2003
), the European Communities (Undertakings for Collective Investment in Transferable Securities) (Amendment) Regulations 2003 (
S.I. No. 212 of 2003
), the European Communities (Undertakings for Collective Investment in Transferable Securities) (Amendment) (No. 2) Regulations 2003 (
S.I. No. 497 of 2003
), the European Communities (Undertakings for Collective Investment in Transferable Securities) (Amendment) (No. 4) Regulations 2003 (
S.I. No. 737 of 2003
) and the European Communities (Undertaking for Collective Investment in Transferable Securities) (Amendment) Regulations 2007 (
S.I. No. 832 of 2007
) are revoked.
(2) A reference in any other enactment to a provision of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations (
S.I. No. 211 of 2003
) revoked by paragraph (1) shall be construed as a reference to the corresponding provision of these Regulations as shown in Schedule 16.
(3) A reference in any other enactment to any of the Regulations revoked by paragraph (1) shall be construed as a reference to these Regulations.
(4) Notwithstanding paragraph (1), the provisions of these Regulations shall not affect any act or thing done or commenced (but not yet completed), pursuant to any of the Regulations revoked by that paragraph, prior to the coming into effect of these Regulations, including, without limitation, the terms or conditions of Bank authorisations granted pursuant thereto and any such act or thing shall continue to have effect or may be completed and have effect as if done or commenced pursuant to these Regulations.
Regulation 3(1)
SCHEDULE 1
Functions included in Activity of Collective Portfolio Management