The Minister for Finance, Michael Noonan TD, has signed an order to commence the Irish Collective asset-management Vehicles Act 2015

The Minister for Finance, Michael Noonan TD, has signed an order to commence the Irish Collective asset-management Vehicles Act 2015 in its entirety on 12 March.

Speaking today, Minister of State at the Department of Finance, Simon Harris TD said:

The ICAV Act was signed into law by the President on Wednesday 4 March.

ENDS

Collective investment funds are currently structured as:

• companies as UCITS under the Companies Acts, and as non-UCITS under Part XIII of the Companies Act 1990
• unit trusts under the Unit Trusts Act 1990
• investment limited partnerships under the Investment Limited Partnerships Act 1994
• common contractual funds under the Investment Funds, Companies and Miscellaneous Provisions Act 2005

The creation of this new corporate vehicle for investment funds outside the Companies Acts is a key Government commitment in the IFSC Strategy Statement. The structure is similar to those already in place many of our competitor jurisdictions including the Luxembourg and French “SICAV” and the UK Open Ended Investment Company (“OEIC”).

It will be known as the Irish Collective Asset-management Vehicle or “ICAV”.

The main provisions of the Bill are as follows:

• part 1 of the Bill deals with preliminary matters and contains definitions used throughout the bill as well as the power of the Central Bank of Ireland to make provision for the implementation of the ICAV regime. The power to make regulations and directions in relation to ICAVs (and other regulated financial service providers) is already set out in the Central Bank (Supervision and Enforcement) Act 2013. The ICAV will be a corporate entity, with limited liability for investors, formed by two or more persons and with a registered office in the State
• part 2 deals with formation, supervision and control of the ICAV. In particular, this part provides that an ICAV can only carry on business as an authorised collective investment scheme (either as an Undertaking for Collective Investment in Transferable Securities – “UCITS” – or an Alternative Investment Fund – “AIF”)
• part 3 deals with the shares of the ICAV and reflects provisions already in place for funds which are incorporated under existing company law. As with a Part XIII of the Companies Act 1990 investment company, the ICAV will be able to take investments and redeem investments, resulting in a fluid capital structure. The remainder of the provisions in this part concern the maintenance of the register of members and these also reflect established policy as set out in company law
• part 4 concerns the appointment, removal and conduct of directors and to a large extent mirrors provisions in companies legislation. The provisions include a prohibition on undischarged bankrupts acting as directors of ICAVS without Court approval; a prohibition on the making of directors’ loans; and the cross application of the rules concerning the restriction and disqualification of directors from company law
• part 5 concerns the meetings, including annual general and extraordinary general meetings of the ICAV. Of particular significance is the capacity of the board to dispense with the holding of an AGM but as a safeguard, 10% of the shareholders, or the auditor, can requisition the holding of an AGM
• part 6 sets out rules in relation to the registration of charges and priority. It also sets out rules in relation to debentures
• part 7 deal with the accounting, auditing and reporting requirements for the ICAV. The objective is to ensure that the annual reports and accounts of ICAVs will result in the equivalent information being made available as that by competitor investment fund entities in other jurisdictions. The accounts must give a “true and fair view” and the auditor, is required to confirm that the annual accounts give a “true and fair” view
• part 8 concerns the conversion of an existing collective scheme incorporated as an investment company or UCITs to an ICAV
• part 9 provides for the inward migration of foreign fund structures to become ICAVs (and vice versa)
• part 10 sets out provisions relating to the appointment of receiver and the winding up of an ICAV. In each case those rules which apply to an investment company shall cross apply to an ICAV with the necessary modifications
• part 11 deals with the striking from and if appropriate the restoration to the register of an ICAV
• part 12 contains provisions concerning the investigation, compliance and enforcement of the Bill. It sets out the penalties for offences under the Bill, and the division of enforcement responsibilities between the Central Bank and the Office of Corporate Enforcement (ODCE)
• part 13 sets out miscellaneous provisions, including provisions amending the Taxes Consolidation Act 1997 and the UCITs Regulations