The Investor Money Regulations
Client Assets rules
The Central Bank of Ireland has published a new set of client asset rules for fund services providers. The Investor Money Regulations were brought into effect on 30th March 2015 by Statutory Instrument 105 of 2015. For those in scope, the new rules must be implemented by 1st April 2016.
The Investor Money Regulations apply to Irish fund service providers, including fund administration firms who own and operate bank accounts for the collection of investor subscription and redemption monies.
An equivalent regime has not been applied to such activity in the past, so this is entirely new for many firms. The core principles of the regulations are:
- Daily Calculation
- Risk management
- Investor money examination
The rules are clear that if the ‘collection account’ is an asset of the Investment Fund, then the rules do not apply, so an alternative ‘Fund Asset Regime’ may be an option for some firms depending on how their business, and their banking activity is structured.