Irish management companies: are you confident you have the correct governance structure in place?

Insights - What we think

By Conor Meehan, Managing Director, Fund Solutions (Ireland)

‘The Central Bank Ireland has been ramping up its oversight and clamping down on those FMCs who break its rules.’

An unstable governance structure can be the undoing of Irish fund management companies (FMC). It can negatively impact your ability to grow assets while materially impacting investors.

There is also growing pressure, scrutiny and expectation from the Central Bank of Ireland (CBI) to ensure FMCs are properly supporting investors. This includes CP86 which builds on guidance over delegate oversight, organisational effectiveness, directors’ time commitments, managerial functions, operational issues and procedural matters.

CBI has been ramping up its oversight and clamping down on those FMCs who break its rules by breaching investment fund regulations. The CBI has continued to establish its authority by penalising these companies, ultimately reminding the Irish industry that the FMC remains responsible for compliance with its regulatory obligations.

More about CP86

In October 2020, the CBI announced that all FMCs must be fully compliant with CP86 by the end of Q1 2021.

In December 2016, the CBI addressed substance requirements in their final rules and guidance on the effectiveness of fund management companies – which became effective on 1 July 2018.

Following the implementation of CP86, Self-Managed Investment Companies (SMIC) who applied for authorisation from the CBI were required to give greater time commitments from Designated Persons (DP) than before.

As many SMICs rely on external consultants to provide DPs, increased time commitments mean higher costs. For SMICs, the time commitments for DPs apply to the individual DP’s appointed by the SMIC, whereas for a third-party Management Company it applies to the Management Company itself.

Many UCITS and AIFs transitioned to a third-party Management Company to assist with the capability to meet the CBI’s substance requirements, rather than encounter any added complexity and cost.

The Central Bank of Ireland’s latest thematic review included updated guidance that all Irish fund management companies (FMC) must appoint a minimum of three full-time employees.

How can we help?

We provide full, continuous governance throughout the life of a fund.

In Ireland, we help our investment managers navigate regulatory requirements, governance changes, administration and oversight so they can focus on what they do best – manage investments and grow their assets.

Our core services in Ireland are Management Company, Alternative Investment Fund Manager and fund administration, including transfer agency.

As part of Link Group, we are a global leader in financial administration and one of Europe’s largest and longest running independent third-party Management Companies/Authorised Fund Managers.

We leverage this global scale and expertise to invest in our people and to utilise best-in-class technology to directly benefit our Irish clients. This helps us to minimise risk and improve operational processes for our clients while providing exceptional service quality.

Our local dedicated subject matter experts – including our Designated Persons (DP) covering all six management functions – are ready to support you at every step of your and your investors’ journey.

Our DPs are leading experts you can trust for every major element of fund management – including fund risk management, distribution & capital and financial management, operational risk, regulatory compliance and investment management.

Technology

We have invested AU$250m every year to deliver robust, secure and scalable technology design. Our scale allows us to invest in our people and to utilise the best-in-class in-house and industry technology.

One of the platforms we use to support investment managers is Confluence’s cloud-based portfolio analytics solution, Revolution.

Revolution offers a best-in-class platform for investment management, risk analysis and oversight.

The platform provides us with 360-degree oversight on every fund that we oversee – improving our performance measurement, attribution and risk analysis capabilities. Allowing us to stay ahead of the curve for analysing data and ensuring investor confidence.

Data is fed directly from the fund administration system – the official books and records of the fund. This ensures we are always reviewing the latest data, calculating up-to-date risk and performance numbers.

Administration systems

Our other administration systems include:

  • Liquidity monitoring (Ice Vantage)
  • Transfer agency (HWM Mantra)
  • Fund accounting (FIS InvestOne)
  • Reconciliations (Fund Recs)
  • IBP Monitoring (StatPro SPC)

As your partner, you can rely on us to stay ahead of the curve in regulation and governance.

Contact us to find out how we can help you protect your company from regulatory and reputational risk.

Conor Meehan

Managing Director, Fund Solutions (Ireland)

Tel: +353 1 224 0527

Email: Conor Meehan