CBI publishes consultation on ELTIF operational and disclosure requirements

Published: 03 November 2023

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On 1 November, the Central Bank of Ireland (CBI) published a consultation paper (CP155) setting out the specific operational and disclosure requirements that will be applied to ELTIFs as a condition of authorisation.  The consultation paper proposed to introduce a new ELTIF chapter in the CBI’s AIF Rulebook to support the establishment of ELTIFs in Ireland.

The consultation paper contains six sections outlining the CBI’s proposals on:

  • ELTIF restrictions and transparency requirements, including:
    • A restriction on the acquisition of shares carrying voting rights which would enable it to exercise significant influence over the issuing body.  This does not apply to investments in other funds and to investments in venture capital and private equity.
    • A restriction on raising capital from the public through the issue of debt securities, which does not prevent issuing of notes on a private basis to lending institutions for financing arrangements.
    • A requirement to specify in its constitutional document the maximum charge relating to the redemption or repurchase of units, as well as the conditions for the creation and cancellation of units or for contributions and withdrawal of partners’ capital.
    • The redemption or repurchase of ELTIF units at a price arrived at by dividing the net asset value of the ELTIF by the number of units outstanding; such price may be decreased by duties and charges.
    • Conditions for the establishment of side pockets.
    • Conditions for the establishment of umbrella ELTIFs.
  • Supervisory requirements ensuring that the ELTIF sets out the relevant information for investors regarding operational policies and processes, including:  
    • Circumstances in which the CBI must be notified or for which CBI approval must be sought.
    • Monthly returns to the Statistics Division of the CBI containing data on the ELTIFs performance.
  • Prospectus requirements and information that ELTIFs must disclose within a prospectus.
  • General operational requirements, including rules on distributions, fees, dealing requirements and financial resources.
  • Annual and half-yearly reports, including their publication and the information that they must contain.
  • Marketing of ELTIFs to retail investors, including the information that the ELTIF shall provide in the prospectus for Irish unitholders.
    • Where the ELTIF is constituted as an umbrella fund, it shall only market subfunds for which it has received specific approval from the Central Bank.

 

The Central Bank is seeking the views of stakeholders on the proposed chapter.  Feedback can be submitted to [email protected] until 13 December 2023.  

For more information, please contact Guillermo Pérez Molina, Private Credit Associate.