AIF RULEBOOK CONSULTATION
Today, 9 September 2025, the Central Bank published its highly anticipated consultation paper on proposed updates to the AIF Rulebook (“CP162”).
The proposed revisions to the AIF Rulebook represent the most significant and welcome development in the private fund space in Ireland since the publication of the original AIF Rulebook in 2013 and “will align the AIF Rulebook with the revised European rules [AIFMD II], take account of market developments, enhance regulatory effectiveness and provide additional clarity…”.
The consultation will close on 5 November 2025, following which the Central Bank will issue a feedback statement and a final version of the updated AIF Rulebook.
The revisions proposed by the Central Bank in CP162 provide important clarifications and updates on a range of issues:
- ensuring alignment with AIFMD II and the more recent changes to implement ELTIF 2.0;
- giving effect to the recommendations of the Irish Government’s Fund Sector 2030 Final Report supporting investments in private assets; and
- further clarifying and technical changes to aid the aim of greater certainty and clarity.
Some of the key proposals are:
- Loan origination
Deletion of the section of the AIF Rulebook containing Irish domestic rules on loan originating funds. Instead, the EU-wide regime for loan originating funds introduced under AIFMD II will be included in the Irish AIFM regulations that will transpose AIFMD II.
This represents a welcome harmonisation of the rules for loan originating funds across the EU and confirms that there will be no gold-plating of the AIFMD II rules.
It is also proposed to include provisions in the Rulebook permitting non-EU AIFMs to manage loan originating QIAIFs.
- Fund Financing Arrangements
Removal of the current restriction on the provision by QIAIFs of third-party guarantees. This will simplify how QIAIFs can agree the terms of subscription line financing and asset level financing across more complex private fund structures and fund families.
- Use of Intermediary Investment Vehicles
Simplification of the requirements applicable to QIAIFs that invest through subsidiaries and co-investment vehicles subject to appropriate prospectus disclosure, and initial and ongoing due diligence by the AIFM and related policies and procedures.
Removal of certain requirements relating to contractual arrangements and board composition of wholly-owned subsidiaries.
These changes will facilitate more efficient “below the fund” structuring.
- Other Changes to Respond to Market Developments
- Share class features: Enhancing provisions relating to typical private asset/alternative fund share class features (e.g., excuse and exclude provisions, stage investing, management participation, etc.), and side letter arrangements.
- Changes to offer period requirements for QIAIFs: Removing the existing initial offer period limit of two years and six months for closed-ended and open-ended with limited liquidity QIAIFs in favour of a requirement that the initial offer period is disclosed in the QIAIF’s prospectus.
- Capital commitments: Miscellaneous amendments to better align with capital commitment and drawdown structures.
- Liquidity Management Tools
Clarification of the requirements around the use of liquidity management tools and collation into a unified section of the AIF Rulebook, reflecting the requirements of AIFMD II.
- Half-Yearly Reports for AIFMs
Addition of requirement for AIFMs to produce a set of half-yearly reports covering the second half of the financial year.
UCITS CONSULTATION
The Central Bank also published a consultation paper proposing to repeal and replace the current Central Bank UCITS Regulations (“CP161”). CP161 aims to ensure that the UCITS regulatory framework in Ireland is aligned with the revised European framework and to incorporate other legacy updates.
The revised regulations would align domestic rules in relation to performance fees with the ESMA Guidelines on performance fees, which includes allowing crystallisation more than once per year under specific models, the possibility of performance reference periods shorter than the whole life of the fund (minimum 5 years) and allowing entities other than the depositary to verify performance fee calculations.
CONCLUSION
CP162 contains welcome reforms that recognise market standard features in different types of private asset and other alternative funds. CP161 contains various “passage of time” and other updates to the UCITS framework and clarifications on performance fee rules.
We are analysing the proposals in the consultations in detail. We will continue to keep you updated on developments as we near the finalisation of the updated regimes.
If you have any questions in relation to these developments, please get in touch with your usual Arthur Cox contact.