Central Bank published 48th Edition of the AIFMD Q&A

The AIFMD Q&A, first published on 16 May 2013 by the Irish Central Bank, recently came out in its 48th Edition. This Q&A aims to address anticipated questions related to the implementation of the AIFMD, providing guidance until definitive positions and practices are established. Not intended for assessing regulatory compliance, the Q&A is accessible through ‚Markets Update‘ and the Central Bank website, subject to periodic updates. The Central Bank reserves the right to modify its approach to any covered matter at any time.
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The 48th Edition, released on 1 November 2023, introduces a new Q&A (ID 1156) outlining circumstances under which the Central Bank may exempt an investment limited partnership from the European Union (Qualifying Partnerships: Accounting and Auditing) Regulations 2019. Additionally, this edition expands the exemption from the loan origination regime, applicable to Alternative Investment Funds (AIFs) granting loans to subsidiaries (Q&A ID 1084), to include AIFs extending loans to co-investment vehicles where they hold a majority interest.
Here we would like to present the new/revised questions in full, together with a brief summary of their respective answer:
ID 1156
Q. I am the general partner of an AIF established as an Investment Limited Partnership under the Investment Limited Partnerships Act 1994. In accordance with Section 15(1) of the Investment Limited Partnerships Act 1994, the Central Bank may exempt an investment limited partnership from the provisions of European Union (Qualifying Partnerships: Accounting and Auditing) Regulations 2019 (S.I. No. 597 of 2019) (which repealed and replaced S.I. No. 396 of 1993), where its sole business is the investment of its funds in property with the aim of spreading investment risk and giving its partners the benefit of the management of its assets. In order to prepare financial statements of the investment limited partnership in accordance with GAAP or other accepted accounting standards, what steps should I take to obtain such an exemption?
A. General partners seeking exemption from Section 15(1) of the Investment Limited Partnerships Act 1994 must ensure their partnership’s sole business is property investment for risk diversification. Applications for authorization must confirm this, request exemption from specific requirements, and detail financial statement preparation. Exemptions obtained should be disclosed in prospectus documentation, including the basis for financial statement preparation. Existing partnerships can avail of the exemption by contacting fundsauthorisation@centralbank.ie. These guidelines enhance regulatory compliance, transparency, and accountability.
ID 1084
Q. I am a Qualifying Investor AIF and have established a subsidiary in accordance with the requirements of the Central Bank or invest through a co-investment vehicle where the AIF has a majority interest in the co-investment vehicle. Can I fund the activities of the subsidiary or co-investment vehicle by way of loan without seeking authorisation as a loan originating Qualifying Investor AIF?
A. Loans to wholly owned subsidiaries of Qualifying Investor Alternative Investment Funds (AIFs), in line with Central Bank requirements, do not violate the prohibition on loans applicable to most AIFs, excluding loan originating Qualifying Investor AIFs. Additionally, lending by a Qualifying Investor AIF to a co-investment vehicle, where the AIF holds a majority interest, is permissible and not considered a breach of the loan prohibition for AIFs, as long as the lending is ancillary to the AIF’s primary investment strategy.
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For access to prior versions of the AIFMD Q&A, interested parties can refer to THIS archive.