Key fund updates
ELTIF, EuSEF, EuVECA, Companies Act 2014 and AIFMD
The finalised text of the ELTIF was published in the Official Journal of the EU on 19 May 2015. It will come into force 20 days later on 8 June 2015, and will be applicable from 9 December 2015.
The ELTIF is a type of alternative investment fund which will be regulated as part of the Alternative Investment Fund Managers Directive (AIFMD). It allows investors to invest into companies and projects that need long-term capital. ELTIFs will be capable of being marketed to all types of investor, including retail investors, using the AIFMD passport.
EuSEF & EuVECA
The Minister for Finance published two new Statutory Instruments on 20 May 2015 regarding two new European fund products – the European Union Social Entrepreneurship Funds (EuSEFs) and the European Union Venture Capital Funds (EuVECAs).
The Statutory Instruments are respectively the European Union (European Social Entrepreneurship Funds) Regulations 2015 and the European Union (European Venture Capital Funds) Regulations 2015, and they designate the Central Bank of Ireland as the competent authority for the EuSEF and the EuVECA. As each of these funds was established by EU Regulation rather than Directive, they are already applicable in Ireland without the need for any Irish legislation.
Both funds are part of the European Commission’s focus on developing additional financing for businesses outside traditional banking systems by permitting investment funds to invest in or lend to businesses. This focus also includes European Long Term Investment Funds. As each of these new funds are regulated under the AIFMD regime, they can avail of the AIFMD passport.
Companies Act 2014
The Companies Act 2014 ("the Act") came into effect on 1 June 2015. It consolidates the existing Companies Acts, simplifies Company Law and introduces some welcome reforms. The Act affects all Irish companies, including fund service providers such as administrators and depositaries, managers of both UCITS and AIFs, as well as investment companies.
All existing private companies will have to decide whether to become a company limited by shares (LTD), a designated activity company (DAC) or another type of company. Companies regulated by the Central Bank of Ireland ('CBI') however, will likely be required to re-register as a DAC.
We anticipate that the CBI will publish guidance on this matter.
The European Securities and Markets Authority published an updated version of its ‘Questions and answers on the application of the AIFMD’ on 12 May 2015. The updated sections are Section III on ‘Reporting to national competent authorities under Articles 3, 24 and 42’ and Section VII on ‘Calculation of leverage’.