The Rulebook governs the authorisation and ongoing operation of Irish alternative investment funds (“AIFs”), including Retail Investor AIFs (“RIAIFs”), Qualifying Investor AIFs (“QIAIFs”), European Long-Term Investment Funds (“ELTIFs”), their managers (“AIFMs”) and their depositaries.
This briefing summarises the key changes of most practical relevance to fund managers and boards.
Liquidity management tools – a new framework
This is one of the most significant changes in the updated Rulebook, reflecting the recent AIFMD II (Directive 2024/927) (PDF 1.1 MB) reforms. A liquidity management tool (“LMT”) framework has been introduced across all open-ended fund structures.
Open-ended AIFs (including open-ended with limited liquidity) must disclose in their governing documents the selected LMTs and the terms and conditions for their activation and deactivation. When selecting the two minimum mandatory LMTs, the AIFM should consider choosing at least one quantitative-based LMT and at least one anti-dilution tool, reflecting ESMA’s guidelines. AIFs may also establish side pockets in certain circumstances, where provided for in their governing documents and disclosed to investors in advance.
Redemption gates
Specific operational mechanics for redemption gates are now codified. Where a redemption gate is activated, redemption requests on that dealing day must be reduced rateably and must be treated as received on subsequent dealing days until satisfied.
Suspension reporting
A new ongoing reporting obligation has been introduced. Suspension of subscriptions, redemptions, and NAV calculation must be reported immediately to the Central Bank, and if a suspension persists beyond 21 working days, updates must be provided to the Central Bank at each subsequent 21 working-day interval. In addition, under AIFMD II, an AIFM is required to notify the Central Bank, without delay, of the activation or deactivation of any of the other LMTs in a manner that is not in the ordinary course of business as envisaged in the AIF’s constitutional document.
Side pockets
The framework for side pocket share classes has been clarified and expanded. Side pockets may be established by physical or accounting segregation for assets whose features have significantly changed or become uncertain due to exceptional circumstances, provided they are provided for in the governing documents and disclosed to investors in advance. Physical segregation means that the side‑pocketed assets are legally and structurally separated into a distinct pool of assets, whereas with accounting segregation the assets remain in the same legal pool of assets, but are tracked separately in the AIF’s books and records. Previously, the Rulebook addressed only physically segregated side pockets.
Fund financing
A welcome change is the removal of the prohibition on AIFs acting as guarantor on behalf of third parties. This will simplify fund financing arrangements, especially where fund families or other structures rely on cross-collateralisation, which is a market standard. For more on the impact of this change, please see our recent update: Prohibition on Third Party Guarantees removed. In addition, the provision enabling QIAIFs and ELTIFs to issue debt instruments on a private basis to facilitate financing arrangements, has been expanded to include not just lending institutions but “other debt providers” as a source of this financing.
Move to EU loan origination regime
AIFMD II has introduced a harmonised EU regime for loan originating AIFs, replacing divergent national approaches, which means that the former standalone loan origination QIAIF regime (“L QIAIF”) and prescriptive domestic rules have been removed from the Rulebook. The removal of the restriction on granting loans provides the opportunity to establish loan originating RIAIFs for the first time. AIFs wishing to originate loans and loan originating AIFs will need to comply with the requirements of AIFMD II set out in the updated AIFM Regulations.
The Rulebook clarifies where a QIAIF that is a loan originating AIF has a registered or non-EU AIFM, the loan originating QIAIF must be closed-ended.
Preferential treatment arrangements/side-letters
The Central Bank has updated the Rulebook to clarify its expectations on preferential treatment granted via share classes. This recognises differentiation of QIAIF and ELTIF share classes on the basis of asset exposure, as well as subscription/redemption procedures, distribution policies or fee structure, hedging policies or other criteria provided that such preferential treatment is clearly disclosed in the prospectus, including a description of how the QIAIF will ensure the fair treatment of investors. The requirement for unitholders in a share class to be treated equally has been removed for QIAIFs and ELTIFs recognising that there can be differentiated or preferential treatment for shareholders in the same share class. Such preferential treatment is subject to the AIFM’s overarching obligation to treat all investors fairly.
Capital commitments
The Rulebook now includes capital commitments as a QIAIF subscription mechanism, formally recognising capital commitments as an alternative basis for participation in a QIAIF, providing that a QIAIF shall have a minimum capital commitment or minimum subscription of €100,000.
The Rulebook also provides detailed mechanics for capital commitment structures at share class level, including express provision for drawdown-based issuance at a price other than NAV, excuse and exclude provisions, stage investing, and management participation.
Charity share classes
The Rulebook provides QIAIFs with the ability to establish charity share classes that make distributions to charity, which did not exist under the previous Rulebook. Key conditions for such classes include that investors must actively elect to subscribe to such a share class, distributions may only be made to a charity that is approved, authorised, or registered in the relevant jurisdiction, clear disclosure that the charity (and not the investor) will benefit financially from distributions, and periodic reporting must include details of amounts distributed to charity.
Relaxation of the significant influence restriction
The Rulebook previously provided that a QIAIF could not acquire shares carrying voting rights which would enable it to exercise significant influence over the management of an issuing body. A carve-out applied to venture capital, development capital, and private equity QIAIFs whose prospectuses disclosed the intention to exercise legal and management control over underlying investments, but no equivalent carve-out was available to other fund types.
Now the Rulebook has removed this restriction entirely. QIAIFs are no longer subject to a prohibition on acquiring interests that carry significant influence over an investee entity, regardless of strategy. This change will benefit a broad range of strategies including direct lending, real assets, infrastructure, and hybrid strategies involving active ownership or board representation, which may not have fitted within the previous carve-out. It is worth noting that applicable company law, securities law, and mandatory bid and notification obligations continue to apply independently of this change.
Intermediary investment vehicles
The Rulebook now contains a more flexible framework for the use of SPVs, subsidiaries, aggregators, co-investment vehicles and other intermediary investment vehicles subject to appropriate disclosure to QIAIF investors and due diligence, oversight and monitoring being carried out on such vehicles by the relevant AIFM. These broader simplifications help to align QIAIFs with market standard private asset structures.
Previously, the Rulebook imposed a series of prescriptive conditions on QIAIF subsidiaries that have not been carried forward, including the requirement for prior Central Bank approval for the establishment of each subsidiary, the requirement that the directors of the QIAIF form a majority of the board of directors of the subsidiary, the prohibition on the subsidiary appointing any third parties or entering into any contractual arrangements unless the QIAIF itself was a party to such appointments or arrangements and the requirement that the constitutional document of the QIAIF to provide expressly for the ability of the QIAIF to establish subsidiaries. These changes will make it more straightforward to operate subsidiaries with their own governance and contractual arrangements.
Fund of fund/master-fund structures
The definition of a “Category 1 investment fund”, which is relevant to the rules on investment by AIFs in other funds, has been expanded. “Category 1 investment fund” now includes certain funds authorised by the Hong Kong Securities and Futures Commission, in addition to EU/EEA UCITS, Guernsey, Jersey, Isle of Man, and other funds previously included. This widens the range of funds in which a RIAIF can invest more than 30%, or a QIAIF more than 50%, of its net assets without the need to satisfy the more onerous Category 2 conditions, including confirming to the Central Bank that the target fund complies in all material respects with the equivalent Rulebook provisions.
Performance fee verification
The Central Bank has updated its approach to performance fee verification, meaning that an AIF, be it RIAIF, QIAIF or ELTIF, must ensure that the depositary, or approved competent person, verifies that procedures have been effectively implemented to ensure that performance fees are calculated in accordance with the AIF’s governing documents. The relevant AIFM must provide the depositary/competent person with all necessary information regarding the calculation of the performance fee in advance of any such fees being paid. Previously, there were no requirements around the procedures involved.
Registered AIFMs and Non-EU AIFMs managing QIAIFs – new provisions
The May 2026 Rulebook introduces a dedicated section in the QIAIF chapter addressing the obligations of QIAIFs managed by registered AIFMs or non-EU AIFMs, which did not appear as a consolidated set of provisions in the March 2024 version.
Where a QIAIF has a registered AIFM, the registered AIFM must comply with specified provisions of the AIFM Regulations, including general principles, delegation, liquidity management, valuation, and certain transparency obligations (with limited carve-outs). Loan originating QIAIFs with a registered AIFM must be closed-ended and comply with the loan originating AIF provisions in the AIFM Regulations. A QIAIF with a registered AIFM must have a single depositary appointed.
Parallel requirements apply where a QIAIF has a non-EU AIFM, including compliance with specified AIFM Regulations provisions, appointment of a single depositary, and compliance with specified AIFMD Level 2 provisions.
Expanded depositary scope
The scope of Chapter 5 (Depositaries) has been made more explicit in the May 2026 Rulebook. It now expressly applies to depositaries of AIFs with authorised AIFMs, Professional Investor Funds with registered AIFMs, QIAIFs with registered AIFMs, and QIAIFs with non-EU AIFMs, with specified applicability differences depending on the relevant authorisation date and AIFM status.
The provisions for Depositaries of Assets other than Financial Instruments (“DAoFIs”) have also been expanded and formalised. DAoFI applicants must be Irish-incorporated and authorised as an investment business firm, and must demonstrate capacity, policies, and systems sufficient to meet the applicable safekeeping and oversight obligations and to oversee the AIFM and its delegates. DAoFIs must meet the Chapter 5 minimum capital requirements and may cover professional liability risks through additional own funds or professional indemnity insurance, which must be reviewed at least annually.
Regulatory reporting changes
The detailed prescribed monthly and quarterly reporting obligations for AIFs that were set out in the March 2024 Rulebook have been removed from the body of the Rulebook. AIFs are now required to submit periodic returns in accordance with the requirements set out on the Central Bank’s website. This represents a shift towards more flexible, website-based regulatory reporting guidance. Managers should ensure they are monitoring the Central Bank’s website for any updates to reporting specifications.
Next steps
We recommend that managers and fund boards pursue the following steps:
LMT compliance
Governing documents, prospectuses, and operational procedures – including suspension reporting procedures to reflect the new 21 working-day interval update obligation – should be reviewed and updated to ensure full compliance with the LMT framework. Given the AIFMD II implementation deadline and applicable grandfathering periods, managers should already have completed this exercise or have an active work programme in place to do so.
Fund finance arrangements
Managers should review existing and proposed fund finance arrangements, including subscription lines, NAV facilities, and asset-level financing, in light of the updated Rulebook provisions.
Intermediary investment vehicles
Managers utilising or considering the use of SPVs, aggregators, subsidiaries, or co-investment vehicles should review their structures against the new intermediary investment vehicle framework, including prospectus disclosure, due diligence policies, and ongoing oversight and monitoring obligations.
For funds investing into other funds
Verify whether the Category 1 definition expansion (now including certain Hong Kong SFC-authorised funds) is relevant and update prospectus disclosures as required.
Performance fees
Review performance fee verification procedures.
Monitor the Central Bank website: For updated regulatory reporting specifications
We expect the Central Bank to issue updated AIFMD Q&A and guidance, reflecting the new requirements, shortly. As flagged previously, the Central Bank has indicated that a broader review of the AIF framework is expected to take place in the coming year with a view to converting the Rulebook into a set of regulations.
