23/01/2026

UCITS VI introduces harmonised liquidity management tools, expands the scope of the delegation requirements under the UCITS Directive, and introduces additional requirements in respect of supervision of and reporting on delegates. These changes aim to align the UCITS Directive with Directive 2011/61/EU, as amended (“AIFMD”) standards and ensure robust investor protection while maintaining market efficiency.

This briefing focuses on the updates to the UCITS Directive under UCITS VI relating to the new rules on delegation, and their impact on reporting and authorisation requirements for Managers. For our briefing on the practical implications of the delegation changes for AIFMs under AIFMD, please  read our briefing on the Arthur Cox website: Delegation under AIFMD II: Practical implications for AIFMs.

For the latest on the RTS and Guidelines on liquidity management tools, please see: European Commission adopts technical standards on liquidity management tools under AIFMD and the UCITS Directive and ESMA publishes amended guidelines on liquidity management tools.

Expanded scope of delegation requirements under the UCITS Directive

The recitals to UCITS VI expressly recognise the importance of delegation in asset management and the amendments made to the delegation model under the UCITS Directive are to align it with the AIFMD framework. The scope of the delegation and oversight obligations on Managers under Article 13 of the UCITS Directive are expanded to capture not only the delegation of all functions listed in Annex II to the UCITS Directive but also the MiFID ‘top-up’ services referred to in Article 6(3) of the UCITS Directive. In addition, UCITS VI expressly sets out that the liability of Managers is not affected by the fact that it has delegated these functions or services to third parties. Managers are also required to notify national competent authorities (“NCAs”) before the delegation arrangements become effective.

The list of functions in Annex II comprise the following and are not changing under UCITS VI:

1 investment management;

2 administration:

  • legal and fund management accounting services;
  • customer inquiries;
  • valuation and pricing (including tax returns);
  • regulatory compliance monitoring;
  • maintenance of unit-holder register;
  • distribution of income;
  • unit issues and redemptions;
  • contract settlements (including certificate dispatch);
  • record keeping;

3 marketing.

The MiFID ‘top-up’ and other ancillary services under Article 6(3) comprise (5 and 6 in bold are added by UCITS VI):

  1. individual portfolio management;
  2. investment advice;
  3. safe-keeping and administration of shares and collective investment undertakings units;
  4. reception and transmission of orders relating to financial instruments;
  5. any other function or activity which is already provided by the Manager in relation to a UCITS that it manages, or in relation to services that it provides in accordance with the UCITS Directive, subject to any conflicts of interest being appropriately managed; and
  6. benchmark administration under the EU Benchmarks Regulation.

Accordingly, Managers will need to ensure that they review a potentially expanded universe of what are considered to be their delegates for UCITS VI purposes. They will then need to confirm that appropriate due diligence has been undertaken on those delegates, any required regulatory notifications have been made in connection with the appointment of those delegates and that any relevant contracts comply with the UCITS VI requirements.

As there is some uncertainty about the scope of certain activities connected to the administration function in Annex IIA, discussion at industry level is ongoing to ensure that activities such as tax and legal services are not inadvertently scoped into the delegation provisions.

Application of the UCITS Directive delegation requirements to non-EU delegates

UCITS VI adds a new obligation on Managers to ensure that the performance of the functions referred to in Annex II and the provision of the services referred to in Article 6(3) comply with UCITS VI. This obligation applies irrespective of the regulatory status or location of any delegate or sub-delegate of the Manager. In the context of the rules of conduct for Managers under Commission Directive 2010/43/EU implementing the UCITS Directive (best execution, for example), this means that Managers must ensure that non-EU investment managers must meet the same standards as would be required if the Manager performed the functions directly.

In September 2025, the European Securities and Markets Authority (“ESMA”) published the following Q&A on this topic, and a response is awaited from ESMA to provide further clarity on this:  

“It follows from Article 1(9)(b) and Article 2(4)(b) AIFMD II that the AIFM or UCITS management company shall ensure that the performance of the functions in Annex I or II of the respective directives, as well as the provision of the services referred to in Articles 6(4) or 6(3), complies with the requirements of AIFMD II.

Considering that portfolio management and risk management may be delegated to entities located in the EU or to regulated entities located in third countries, to which extent are delegates or subdelegates of AIFMs or UCITS management companies subject to the AIFMD and UCITS Directive”.

Managers will need to monitor any responses to this Q&A from ESMA and related guidance from NCAs to determine what, if any, changes will need to be made to contractual and oversight arrangements with delegates. 

Exception from delegation requirements under the UCITS Directive for arrangements with certain distributors

UCITS VI provides that a Manager is not considered to be delegating functions when entering into marketing or distribution agreements with third parties authorised under MiFID II or the EU Insurance Distribution Directive, irrespective of any distribution agreement between the Manager and the distributor.

It is hoped that the Central Bank of Ireland will align its Cross Industry Guidance on Outsourcing with this approach so that such arrangements will not be considered a delegation of functions for the purposes of the Central Bank guidance. Managers should review their relationships with EU-based distributors, placement agents and other similar service providers to determine what, if any, changes might need to be made to contractual arrangements to reflect this position.

European Commission delegated measures

UCITS VI directs the European Commission to adopt delegated measures in respect of the UCITS Directive specifying: (i) the conditions for fulfilling the delegation requirements which must be met by Managers under Article 13(1) of the UCITS Directive; and (ii) the conditions under which a Manager is to be deemed to have delegated its functions to the extent that it becomes a letter-box entity and can no longer be considered to be the Manager of the UCITS or the provider of the services referred to in Article 6(3), as set out in Article 13(2).

Managers will need to monitor the adoption of these delegated measures and carry out additional reviews of the Manager’s delegation arrangements once adopted and implement any necessary remediation steps following this review.

Additional information on delegates to be provided at authorisation stage for Managers

At authorisation stage, Managers must provide their NCA with additional information in relation to their delegation arrangements, including at least the following:

1 Details of the delegates

  • the legal name and relevant identifier
  • jurisdiction of establishment
  • where relevant, supervisory authority of the delegate

2 A description of the human and technical resources the Manager uses to monitor the delegated activity.

3 In respect of the UCITS it manages or intends to manage:

  • a brief description of the delegated portfolio and risk management functions;
  • whether such delegations amount to a full or partial delegation;

4 A description of the periodic due diligence measures used to monitor the delegated activity (collectively, the “Authorisation Delegate Information”).

Although the Authorisation Delegate Information is limited to new applications for authorisation by Managers under UCITS VI, Managers that have delegated one or more of the Annex II functions or Article 6 services should assess whether the Authorisation Delegate Information requires more or different disclosure than what was previously provided to their NCA and remediate any gaps identified so that they can, if requested, provide their NCA with the same level of information that would be required of a new applicant in respect of the Authorisation Delegate Information. It remains to be seen whether the Central Bank will insist on Managers updating their existing business plans to include the Authorisation Delegate Information.

Ongoing delegation reporting obligations

UCITS VI introduces reporting obligations for Managers under the new Article 20a which are not due to be transposed until 16 April 2027. These requirements are expected to result in a material increase in the level of reporting by Managers to NCAs, including reporting on:

  • the markets and instruments in which the Manager trades on behalf of the UCITS it manages;
  • the arrangements for managing the liquidity of the UCITS;
  • the current risk profile of the UCITS, including the market risk, liquidity risk, counterparty risk, other risks including operational risk, and the total amount of leverage employed by the UCITS;
  • the results of stress testing performed in accordance with the UCITS Directive; and
  • the list of Member States in which the units of the UCITS are marketed.

In addition, UCITS VI adds new requirements for Managers to report on their delegation and sub-delegation arrangements concerning portfolio management or risk management functions. The full list of information required to be reported under Article20a(d) is set out below:

  1. information on the delegates, specifying their name and domicile or registered office or branch, whether they have any close links with the Manager, whether they are authorised or regulated entities for the purposes of asset management, their supervisory authority, where relevant, and including the identifiers of the delegates that are necessary to connect the information provided to other supervisory or publicly available data sources;
  2. the number of full-time equivalent human resources employed by the Manager for performing day-to-day portfolio management or risk management tasks within that Manager;
  3. a list and description of the activities concerning portfolio management and risk management functions which are delegated;
  4. where the portfolio management function is delegated, the amount and percentage of the UCITS’ assets which are subject to delegation arrangements concerning the portfolio management function;
  5. the number of full-time equivalent human resources employed by the Manager to monitor the delegation arrangements;
  6. the number and dates of the periodic due diligence reviews carried out by the Manager to monitor the delegated activity, a list of issues identified and, where relevant, of the measures adopted to address those issues and the date by which those measures are to be implemented here sub-delegation arrangements are in place, the information required under points 1, 3 and 4 in respect of the sub-delegates and the activities related to the portfolio management and risk management functions that are sub-delegated;
  7. the commencement and expiry dates of the delegation and sub-delegation arrangements.

ESMA will publish regulatory technical standards (“RTS”) relating to these UCITS VI reporting obligations in due course. 

Should you need any assistance assessing the delegation requirements, or indeed anything stemming from the application of AIFMD II or UCITS VI to Irish AIFMs or Managers, please do not hesitate to reach out to any of our team who can assist.