The Central Bank of Ireland has moved to regulate certain investments made by self-administered pension schemes.
In a recent statement* the bank announced that the Alternative Investment Fund Managers Directive (AIFMD) applies to Exempt Unit Trusts (EUT) as they are currently used in the pensions industry. Investments by self-administered pensions are often held by EUTs.
AIFMD became Irish law in July 2013. The directive essentially provides for the authorisation or registration of investment managers of funds which are not otherwise regulated. It also moves these funds into the regulated arena, imposing rules in relation to organisation, reporting, risk management etc. Critically, it requires that all Irish alternative investment funds (AIFs) appoint a regulated custodian to the assets.
AIFMD is a catch-all in terms of regulation for funds which hitherto were not regulated. While it does not appear to have been the intention of the directive to target EUTs as used by pension schemes, its broad wording has led the Central Bank to determine that they are covered.
In an upcoming blog we will look further at the ramifications of AIFMD for pensions and their investments.
* Feedback Statement on CP68: Consultation on types of alternative investment funds under AIFMD and unit trust schemes under the Unit Trust Act 1990 (including EUTs, REITs etc.)
*Please note this content is the view of the author and not of Independent Trustee Company