Asset Management

Asset Management update - November 2016

Asset Management update

Loan origination funds

The Central Bank of Ireland has announced that it intends to amend the requirements for loan originating Qualifying Investor AIFs (“L-QIAIFs”) set out in the AIF Rulebook.

The Central Bank will update the AIF Rulebook to additionally permit L-QIAIFs to invest in “debt and equity securities of entities or groups to which the loan originating Qualifying Investor AIF lends or which are held for treasury, cash management or hedging purposes”. L-QIAIFs have been prohibited from engaging in activities other than lending and directly related operations.

The changes will come into effect from 3 January 2017.

ESMA publishes updated UCITS and AIFMD Q&A

On 21 November 2016 the European Securities and Markets Authority (ESMA) published an updated questions and answers document on the application of the Undertakings for the Collective Investment in Transferable Securities Directive (UCITS).

The Questions and Answers (Q&A) includes two new questions and answers on how investment limits should be applied where a UCITS wants to invest in an umbrella fund.

On 16 November 2016 ESMA) has published an updated Q&A on the application of the Alternative Investment Fund Managers Directive (AIFMD).

The Q&A includes two new questions and answers on the cross-border marketing of AIFs, clarifying issues around material changes of existing notifications, as well as two new questions and answers on the delegation of functions by an AIFM to AIFs or third parties.


ESMA issues guidelines on remuneration practices under UCITS and AIFMD

On 14 October 2016 ESMA published two sets of Guidelines: Guidelines on Sound Remuneration under UCITS (UCITS Remuneration Guidelines) and Guidelines on Sound Remuneration under the AIFMD (AIFMD Remuneration Guidelines).

UCITS Remuneration Guidelines

The UCITS Remuneration Guidelines provide clarity on the requirements under the UCITS Directive for management companies when establishing and applying a remuneration policy for key staff. The purpose of the Guidelines is to ensure a convergent application of these provisions and provide guidance on the governance of remuneration, requirements on risk alignment, and disclosure.

AIFMD remuneration guidelines

The AIFMD Remuneration Guidelines amend the current Guidelines on sound remuneration policies under the AIFMD (ESMA/2013/232). The amendment relates to the section of these Guidelines dealing with the application of the remuneration rules in a group context and is intended to acknowledge the potential outreach of the Capital Requirements Directive rules in a banking group.

ESMA published its final report on Guidelines on sound remuneration policies under the UCITS Directive and AIFMD in March of this year.


Keeping track of tax changes for internationally mobile employees

Across a number of countries, the way internationally mobile employees are taxed is being shaken-up. This follows the G20/OECD-led Base Erosion and Profit Shifting (BEPS) Action Plan recommendations set out earlier this year. This huge package of reforms is designed to bring tax liabilities more closely into line with the economic ‘substance’ of where and how value is created. For internationally mobile employees specifically, this may mean that corporate tax liabilities can arise in locations where the employee carries out activities, rather than just where they are legally employed or on the payroll. Find out more


Irish non executive travel expenses relief

The recently passed Finance Act 2016 includes an amendment  to provide relief to Irish non-executive directors that will in future be able to receive expenses for attending company meetings tax free. Under the amendment, non-executive directors will be able to receive tax-free expenses when travelling to company meetings without incurring a tax liability, providing their remuneration is under the €5,000 limit.

In last year’s Finance Act a new provision meant that foreign non-executive directors of Irish companies could receive some business travel expenses tax free but this was not extended to their Irish counterparts. This has now been remedied to an extent.

The expenses can be claimed tax free for attending company board meetings or other meetings where directors are attending in their official role. The relief will apply from January 1st, 2017.