The Minister for Finance, Michael Noonan TD, today published the General Scheme of the Irish Collective Asset-management Vehicle (ICAV) Bill. The General Scheme (or “heads”) was approved for legal drafting by the Government at its meeting on Tuesday, 17 December.
Speaking this morning, the Minister for Finance said:
“This is a significant milestone in delivering a new corporate vehicle for investment funds which will be more suited to the needs of the global funds industry. The ICAV will help the Irish funds industry to compete for new sources of business. I intend to push ahead with the drafting of the Bill as a matter of priority””
ENDS
20 December, 2014
Notes for editors:
1. Background to the ICAV Heads of Bill
The IFSC Strategy Statement 2011-2016 commits the Government to the development of proposals for a new type of corporate vehicle for the funds industry aimed at enhancing the attractiveness of Ireland as a domicile for collective investment funds.
As the Secretary General of the Department of Finance, John Moran, highlighted at a recent conference on Funding for Growth, hosted by the Irish Stock Exchange, “We are, in close collaboration with the relevant stakeholders, creating a new funds structure which will streamline the way in which funds are established and operated. The ICAV proposal will minimise the administrative complexity and cost of establishing and maintaining collective investment schemes in Ireland and will allow us to maintain our competitive advantage as a funds domicile of choice in Europe.”
2. The Main Provisions of the Bill include:
Part 2, Incorporation, Registration and Authorisation (Heads 6 – 27 and Schedule 1) - deals with formation, supervision and control. In particular this part provides that when the Central Bank authorises a fund, this will result in the creation of the corporate investment fund. This Part also contains provisions dealing with the operation of segregated funds.
Part 3, Depositary (Heads 28 -29) - deals with the safe-keeping of the property of the ICAV, and its provisions are specifically tailored to the manner in which a depository has to be engaged to deal with this matter.
Part 4, Share Capital, Shares and certain other Instruments (Heads 30 – 41) - deals with the capital structure of the investment fund. As with a Part XIII investment company, the ICAV will be able to take investments and redeem investments, resulting in a variable capital structure. It also deals with shares – their issue and transfer etc. - and to a large extent mirrors how shares are used in companies.
Part 5, Corporate Governance (Head 42 - 66) - deals with the appointment of directors, secretaries and the holding of general meetings by ICAVs. These mirror, to a large extent, similar requirements applicable to companies.
Part 6, Duties of Directors and Other Officers (Heads 67 – 81A) the obligations placed on the ICAV to approve certain payments to the directors and the obligations on the directors to disclose information where a potential conflict may arise. This Part also deals with shadow directors and the prohibition of loans to directors.
Part 7, Financial Statements (Heads 82 – 95 & Schedules 6, 7 and 8) - deals with annual reports and accounts. The 6th Schedule deals specifically with matters relating to the appointment of auditors, in much the same manner as auditors are appointed by companies.
Part 8, Charges and Debentures (Head 96) - will deal with the manner in which charges and debentures are registered against the ICAV.
Part 9, Reorganisation, Acquisition, Merger and Division (Head 97 and Schedule 2) - deals with schemes of arrangement, mergers and divisions and other re-organisations that ICAVs can engage in. The approach adopted here is to set out in broad terms what ICAVs can engage in, again mirroring broadly what companies can do, but providing the Regulator with the means on introducing more detailed rules and regulations to govern such activity.
Part 10, Conversion and Migration (Heads 98 - 99 and Schedules 3, 4 and 5) - deals with conversions and migrations. Inward and outward migrations of ICAVs will be permitted. This mirrors provisions introduced in 2009 for Part XIII investment fund companies (Part XIII of the Companies Act 1990).
Part 12, Winding Up (Head 101) - deals with the appointment of liquidators. The provisions cross-apply the winding up provisions applicable to companies. The cross application mirrors the existing approach in respect of both building societies and credit unions for the winding up of those entities. This will ensure that the current restructuring of the Company Law provisions relating to winding up will be consistently applied to the ICAV structure.
Part 14, Enforcement (Heads 103 -104) is designed to identify the provisions relating to the powers etc. of enforcement available to the ODCE in Company law.
Part 15, Miscellaneous (Heads 105 – 106) will deal with any amendments to other legislation required by the enactment of this Bill.