Central Bank publishes Feedback Statement to Consultation Paper CP152 – Own Funds requirements for UCITS Management Companies and AIFMs authorised for discretionary portfolio management services

The present Feedback Statement addresses responses to Consultation Paper 152 and outlines revisions to the own funds requirements for UCITS Management Companies and AIFMs. The Central Bank acknowledges stakeholders‘ concerns about the lack of detail in the proposal and aims to balance the costs for authorised entities with the benefits of appropriate and proportionate requirements.
The Central Bank has revised the own funds requirements for UCITS Management Companies and AIFMs, taking into account minor amendments. Transitional arrangements have been established, allowing firms to benefit from these arrangements until 30 June 2026. The Central Bank recognizes the need for firms to have adequate time to develop systems, policies, and processes and has extended the implementation period for UCITS Management Companies and AIFMs authorized on or before 27 November 2023 until 27 May 2024.
The document also addresses the calculation of the Risk to Client K-factor requirement, reporting frequency, and format of the Minimum Capital Requirement Report. Respondents generally agreed with the proposed manner of calculating the Risk to Client K-factors, but sought clarity on material changes in business models, AUM scope, and relevant definitions. The Central Bank has clarified the use of absolute values in the determination of the K-AUM additional own funds requirement and the application of K-COH only to AIFMs. It has also addressed concerns about the uncapped nature of the proposed calculation and provided a coefficient of 0.1% for the calculation of K-COH for cash trades.
Furthermore, the Central Bank has amended the Minimum Capital Requirement Report to reflect the Fixed Overhead Requirement set out in Article 13 of the IFR. It has also provided guidance on the frequency of submission and format of the report, while acknowledging operational and efficiency challenges arising from different reporting cycles within the same financial group. The CBI emphasizes the need for UCITS Management Companies and AIFMs to comply with the IFR Fixed Overhead Requirement and directs attention to the EBA Interactive Single Rulebook for further guidance.