Central Bank to review hedge fund
THE CENTRAL Bank is set to begin consultations from tomorrow on new proposals to regulate hedge and private equity funds.
The bank is planning to implement the EU’s alternative investment fund managers’ directive, which aims to centralise non-retail investment vehicles such as private equity and hedge funds.
Typically, these funds are not as tightly regulated as those that offer investments to retail customers.
In a statement issued today, the bank says that it will set out a series of proposed changes to the current regime for the regulation of Irish funds in a draft Alternative Investment Funds Handbook.
This will consolidate current rules for non-retail funds into a single book and include a series of major changes to its existing approach.
The changes include a loosening of existing restrictions to allow retail investors to use the new regime to invest in “unlisted securities, derivatives and other asset classes to an extent which has not been possible for such investors up to now”, the bank says. In a major alteration, the bank is planning to end the current promotor approval process.
Instead, it plans to place additional reliance on the “alternative investment fund manager”, who must be appointed under the terms of the directive.
The consultation will also deal with the role of directors of such funds.
The Central Bank has already held talks with the investment industry about plans to implement the directive.
In light of these discussions and the need to have as much certainty as possible about the details of what the new regime will require, it has decided on a six-week consultation period.
Following the consultations, it will issue a response in early 2013 that will set out its position on the issues raised. It will publish its finalised rule book shortly after that.
The bank’s deputy governor, Matthew Elderfield, recently told a conference that some aspects of the Republic’s existing regulatory regime surpass the requirements of the new directive.
The value of Irish-domiciled assets recently passed the €1 trillion mark. Over €2 trillion in assets is administered here.