Central Bank to streamline authorisation process for funds

The Central Bank of Ireland is planning a number of changes to the way that Irish investment funds are authorised to make the supervision process more effective and efficient, the regulator's director of markets Gareth Murphy told an industry conference in Dublin yesterday.

Mr Murphy said the Central Bank has decided to “remove the paper” from the process and make it electronic.

“Those of you who are submitting fund applications will soon see a dramatically different authorisation process,” Mr Murphy told delegates at the IFIA global funds conference. “It will be an electronic process with an online interface with the Central Bank. The turnaround times will be at least as good if not faster than before because of the efficiencies of the process.”

Mr Murphy said the bank has also streamlined the process. “We have taken a number of steps out of the process that we thought were redundant and, critically, from the point of view of my colleagues in funds supervision, this new platform will allow us to build a repository of authorisation data that can be combined with the data that we collect from our regular online regulatory returns.

“This will allow the Central Bank to supervise the large population of Irish funds more effectively and more efficiently by spotting outliers and identifying prospectus breaches - both of which are critical to effective funds supervision.”

There are currently just under 12,700 funds administered in Ireland, of which 5,619 are domiciled here.

Mr Murphy said the Central Bank is also looking at the governance of Irish funds, particularly the issue of individuals holding multiple directorships.

“Many of you will be aware that we have engaged with certain directors who have a large number of directorships,” he said. “The Central Bank is concerned that there is a concentration of directorships among a limited number of directors who have extensive directorial responsibilities in this jurisdiction, and perhaps elsewhere.

“The aim of this engagement is to challenge these directors in relation to their capacity to deliver on their directorial commitments and to manage their conflicts of interest. I have heard it said in certain quarters that there is an insufficient number of capable and experienced directors available. It is a view that I do not share. The Central Bank’s work in this area will continue.”

Mr Murphy said the Central Bank is also providing “extensive advice” to the department of finance on a new Irish Collective Asset-management Vehicle (ICAV) regime, which is a bespoke funds vehicle that is more tax efficient for US investors. This new structure was approved by the Government last December.

“We expect to be able to process ICAV authorisations within two weeks of the enactment of the ICAV legislation,” he said.