Central Bank of Ireland publishes revised Irish UCITS rules

The Central Bank of Ireland has finalised its revised UCITS domestic framework, introducing updates that are relevant to UCITS management companies, depositaries and other fund service providers.

The revised UCITS framework includes:

• updated UCITS regulations (2026 UCITS Regulations)

• updated guidance on performance fees of UCITS and certain types of retail investor AIFs

• a feedback statement to Consultation Paper 161

In this update, our Investment Funds experts in Ireland provide an outline of the framework's key measures and the regulatory changes that stakeholders should have on their radar.

Updates to the UCITS framework

The UCITS framework follows CP161, to which various stakeholders, including Irish Funds, made submissions and forms part of the Central Bank's wider programme of transposing EU Directive 2024 / 927 (UCITS VI). While many of the amendments consolidate existing rules, the UCITS framework also introduces substantive changes relevant to UCITS management companies, depositaries and other service providers.

Key changes in the 2026 UCITS Regulations

Liquidity management tools

The responsible person must now consider selecting at least one anti-dilution tool and one quantitative-based tool from Annex IIA of the UCITS Directive, which sets out the permitted liquidity management tools (LMTs).

The requirement to notify the Central Bank when LMTs are activated or deactivated outside the ordinary course of business has been removed. This will now be reported via the Daily Investment Funds Return. Certain provisions have also been removed to avoid duplication, including the 10% redemption gate threshold, swing pricing provisions and anti-dilution levy language.

UCITS ETFs now on a statutory footing

Certain elements of the UCITS Q&A have been incorporated into statute. These include the use of the “UCITS ETF” identifier at sub-fund or share class level and the ability of UCITS ETFs to apply different dealing deadlines for cash and in-kind dealing without a derogation.

Redemption charges

Where an Irish UCITS proposes to apply a redemption charge, this must now be disclosed prominently in the prospectus. Note that a redemption charge is distinct from a redemption fee, which accounts for the cost of liquidity to meet the redemption.

Exchange of assets on redemption

Irish UCITS may now settle redemptions through an exchange of assets (rather than the previous, narrower term “exchange of securities”) as part of their redemption policy. This allows for the exchange of a wider range of asset types. Importantly, this exchange mechanism remains separate from redemptions-in-kind, which continue to operate as a separate process.

NAV-based fee disclosure

A new obligation requires disclosure of the maximum fees payable for any recurring fees calculated by reference to NAV and deducted from fund assets (for example, NAV-based research fees). The feedback statement clarified that distribution, paying agent and representative agent fees may still be disclosed at normal commercial rates.

Connected party transactions

The existing rules now extend to transactions between the UCITS and any shareholder. However, they do not apply to an investor’s transactions in its own units (such as subscriptions, redemptions, conversions or dividends).

Management companies

Management companies must now have “adequate” (rather than “sufficient”) resources to manage and monitor services. The requirement for minimum residency requirements for directors and designated persons of UCITS management companies has been retained, with the Central Bank of Ireland having discretion to impose additional requirements at the point of authorisation based on the nature, scale and complexity of the firm.

Changes to the performance fee framework

The updated performance fee guidance and the 2026 UCITS Regulations and updated performance fee guidance introduce the following changes:

• Increased flexibility on verification: verification of performance fee calculations may now be carried out by the depositary or by a competent person appointed by the responsible person and approved by the depositary

• Shorter reference periods: the performance reference period may now be set at less than the life of the fund, subject to a minimum of five years on a rolling basis

• More frequent crystallisation: high water mark (HWM), high-on-high rate (HoH) and fulcrum fee models may crystallise more frequently than annually in certain circumstances -these include whole-life, non-resettable HWM / HoH models, fulcrum / symmetrical fee models and crystallisation on wind-up, merger or redemption

• Single investor calculation: performance fees may be calculated on a single investor / unitholder basis

Next steps for funds and service providers

Funds, management companies and depositaries should review existing documentation, policies and procedures against the UCITS framework.

Fund documentation may, in many cases, need to be reviewed and updated to reflect:

• any NAV-based fee arrangements

• clarification on redemption charges

• LMT disclosures

• revised performance fee methodology, where relevant

Any change to an existing fund’s performance fee methodology will require consideration of shareholder notification and / or approval requirements.

Constitutional documents may need to be updated where a fund intends to use the new exchange of assets mechanism on redemption or side pockets.

Internal governance documentation and policies should be reviewed for consistency.

How Ogier can help

For advice on structuring UCITS in Ireland, our Investment Funds team can help. We provide structuring advice, manage regulatory authorisations, service provider appointments, cross border marketing and merger and restructuring assistance across the full spectrum of UCITS strategies, including equity, fixed income, ETFs (including active ETFs), money market funds, balanced and absolute returns. 

For further information, contact the team.

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Disclaimer

This client briefing has been prepared for clients and professional associates of Ogier. The information and expressions of opinion which it contains are not intended to be a comprehensive study or to provide legal advice and should not be treated as a substitute for specific advice concerning individual situations.

Regulatory information can be found under Legal Notice