S.I. No. 629 of 2023

S.I. No. 629 of 2023 – European Union (Undertakings for Collective Investment in Transferable Securities) (Amendment) Regulations 2023, outlines regulatory amendments enacted by the Minister for Finance in accordance with the powers vested in him by section 3 of the European Communities Act 1972.
The purpose of these amendments is to align the UCITS Regulations with EU Directive 2009/65/EC (UCITS Directive) of the European Parliament and of the Council of 13 July 2009. This directive, amended by Directive 2014/91/EU of the European Parliament and of the Council of 23 July 2014, serves as the foundational framework for the UCITS Regulations, ensuring compliance with EU standards.
The focal point of the amendments resides in Regulation 37 of the European Union (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (S.I. No. 352 of 2011). Specifically, paragraph (5) of Regulation 37 undergoes modification, with the substituted text addressing circumstances surrounding the insolvency of the depositary and any third party involved in the custody of UCITS assets within the Union. In such cases, the revised regulation asserts that the assets of a UCITS held in custody become inaccessible for distribution, redistribution, or realization for the benefit of creditors associated with the depositary and the aforementioned third party, in alignment with EU regulatory objectives.
This regulatory intervention is positioned to fortify the protection of UCITS assets, especially in scenarios involving insolvency, thereby mitigating potential risks and ensuring the orderly functioning of the financial system. By stipulating the unavailability of UCITS assets for the benefit of creditors in the described circumstances, the amendment seeks to safeguard the interests of investors and maintain the integrity of the UCITS framework within the broader context of European financial regulations. The overarching goal is to contribute to the stability and resilience of the financial markets by aligning national regulations with the evolving landscape of EU directives.
The amendments, encapsulated in S.I. No. 629 of 2023, underscore the ongoing commitment of regulatory authorities to adapt and refine financial frameworks in response to dynamic EU directives. This regulatory diligence is vital in maintaining harmonization with European standards, fostering investor confidence, and upholding the principles of financial stability and consumer protection. The meticulous attention to detail in amending specific regulations reflects the intricate interplay between national legislation and supranational directives, underscoring the nuanced approach required for effective financial regulatory management.