Funds industry faces client asset reform
Consultation Paper 71
The changes proposed in the Central Bank of Ireland’s consultation on client assets are likely to impact the funds industry. CP 71 proposes to develop a new regime for collection accounts operated by fund service providers as early as Q1 2014. Given the possible effect on daily processes and the high level of oversight afforded to client assets generally, it is important that firms understand the requirements now so that they can analyse the impact and take appropriate action.
Unravelling the new requirements from a contractual and technical perspective will take time. Alternatively, fund service providers may seek to adopt structures to remain out of scope. This carries both regulatory risk and the risk that many of these arrangements have yet to be tested by an insolvency situation.