Oisin McClenaghan
Partner | Legal
Ireland
Oisin McClenaghan
Partner
Ireland
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Strengthening Ireland’s position in private assets and alternatives - Central Bank consultation on AIF Rulebook reforms
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The Central Bank of Ireland has proposed substantial enhancements to the Irish private assets, alternatives and direct lending regulatory framework. The changes will extend greater flexibility to investment managers when structuring their investment funds to better meet investors’ needs.
An eight-week consultation on reforms to the bank’s Alternative Investment Fund (AIF) Rulebook will end on 5 November 2025 and the updated AIF Rulebook is expected to become effective before the end of 2025.
In the Central Bank of Ireland’s own words, the "Central Bank is reinforcing Ireland’s position as a leading jurisdiction for the domiciliation of alternative investment funds. These changes will support greater investor choice, maintain high standards of investor protection, reduce systemic risk and enable continued innovation in fund structuring."
Summary of proposed changes
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Enhanced loan origination flexibilities: replacement of Irish direct lending requirements to align with the AIFMD II loan origination regime
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Substantial additional subsidiary and downstream structures flexibilities: additional flexibilities in connection with fund subsidiaries and downstream investment vehicles and conduits
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Simplification of financing arrangements: removal of restrictions on QIAIFs granting loans and acting as guarantors
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Greater side-letter flexibility: enhanced flexibility to extend preferential treatment to investors
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Regulatory streamlining: additional capital commitment flexibilities and share class structuring options, additional exemptions from minimum subscription requirements, additional investor voting rights options, simplification of valuation provisions relating to warehousing, consolidation of ancillary regulations and guidance and removal of obsolete provisions
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No gold plating: alignment with AIFMD II without any additional Irish requirements
Changes to the AIF Rulebook
The AIF Rulebook is the regulatory framework underpinning Ireland’s role as one of the world’s leading AIF domiciles.
The proposals are ambitious. They aim to align Ireland with Europe’s updated Alternative Investment Fund Managers Directive (AIFMD II) and the broader Savings and Investment Union (SIU) goals, while at the same time seeking to enhance Ireland’s appeal as a platform for private assets and long-term investment strategies.
For institutional investors allocating to private equity, private debt, infrastructure and real assets, this consultation is an important milestone. It demonstrates the Central Bank’s commitment to maintaining and enhancing Ireland's position as a leading global funds domicile.
It is expected that the changes to the AIF Rulebook may become effective by 31 December 2025, and in any event no later than 16 April 2026 – the AIFMD II implementation deadline.
Why this matters now
The Central Bank of Ireland's reforms provide international asset managers with a significantly enhanced Irish product range, helping them deliver their private assets and direct lending strategies to market with greater efficiency and flexibility.
The assets under management in Irish domiciled investment funds increased by 22% in the 12 months to 31 December 2024 and now stands at over €5 trillion. 42% of that increase is attributable to growth in Irish domiciled AIFs. The currently proposed enhancements are widely expected to lead to a continuation of that upward trajectory.
Widely welcomed by stakeholders, the updates align the Irish regulatory landscape with evolving European rules, avoid regulatory gold plating and address the needs of modern private asset and alternatives allocation strategies. Investor protections are pragmatically and comprehensively reinforced.
AIF Rulebook amendments
What’s changing for Irish QIAIFs under AIFMD II
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Key changes to the AIF Rulebook |
What is proposed |
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Loan origination |
Removal of the legacy Irish loan origination fund requirements (Loan Origination QIAIF regime), replaced with EU-wide AIFMD II loan origination rules. |
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Liquidity management tools (LMTs) |
Incorporation of AIFMD II LMT obligations including enhanced disclosures on selection and use. |
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Use of subsidiaries |
Replacement in full of Central Bank subsidiary rules with flexible disclosure and oversight driven regime. AIFs no longer required to be party to subsidiaries' contractual arrangements. Requirement to have certain overlapping directors at AIF and subsidiary level removed. |
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Funds acting as guarantor to third parties |
Deletion in full of restrictions on QIAIFs granting loans or acting as guarantors to third parties. |
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Minimum initial subscription requirements |
Capital commitment model accepted for €100,000 QIAIF minimum subscription requirement: can be met incrementally via capital calls. Broader exemptions to the €100,000 QIAIF minimum subscription requirement now provided for. AIFMs, group companies, advisers, consultants and secondees may all now avail of exemptions from the minimum threshold. |
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Side pocketing |
The requirement for a QIAIF to classify its liquidity profile as open-ended with limited liquidity to establish side pockets has been removed. Open ended QIAIFs may also establish side poc |
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Offer periods |
Removal of two-and-a-half-year cap on initial offer periods and replacement with disclosure-based approach. |
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Share classes |
The Central Bank of Ireland's guidance on share classes for closed-ended funds is being incorporated into the AIF Rulebook to explicitly enable all forms of QIAIFs to avail of these features when establishing share classes. |
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Side letters |
Additional side letter flexibilities are now provided for, subject to disclosure and no material disadvantage to other investors. |
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Significant influence |
Removal of restriction on QIAIFs, their GPs or their AIFMs from acquiring shares carrying voting rights which enable them to exercise significant influence over the management of the issuing body. This provision was already disapplied to private equity, venture capital and development capital funds but has now been disapplied to all QIAIFs, regardless of strategy, and replaced with a prospectus disclosure obligation. |
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Warehousing |
Alignment with the Central Bank's ELTIF requirement, namely the requirement that a QIAIF not pay more than the current market value for warehoused assets has been removed and replaced with enhanced prospectus disclosure obligations relating to fees, charges or interest payable. |
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Change of AIFM / depositary |
The current obligation for the constitutional document to specify the procedure for replacing a depositary and AIFM is being removed. |
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Connected parties |
Clarification that unitholders are subject to the connected parties' rules, except in relation to their subscription/redemption activity in the QIAIF. |
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Consistency |
Alignment of QIAIF and ELTIF chapters aims to ensure that the relevant provisions remain consistent. |
What should managers do now?
Certain fund types are likely to be particularly impacted by the changes and should take early legal advice to ensure alignment:
- Private credit and loan origination funds: the current loan origination QIAIF regime is being withdrawn and is being replaced in full by the AIFMD loan origination regime. Talk to us about early adoption opportunities
- Managers using subsidiaries or intermediaries: as oversight shifts to a disclosure-based regime, new flexibilities may be availed of and new disclosure obligations will need to be considered
- Private asset funds: given changes to capital commitments, offer periods and warehousing valuation requirements
How Ogier can help
Ogier in Ireland's Investment Funds team has been actively involved in the ongoing regulatory engagement process with the Central Bank of Ireland through leading roles in key industry association working groups. At Ogier, we are submitting comprehensive responses to the consultation.
Ogier can assist managers and other stakeholders in launching AIFMD II compliant loan origination and credit strategies, preparing responses to the consultation and advising on how the proposed changes may impact existing and future products. We continue to assist our clients and contacts in assessing the new opportunities now presented.
Contact your usual Ogier in Ireland contact or any of the below team members if you wish to discuss the changes and new opportunities.
About Ogier
Ogier is a professional services firm with the knowledge and expertise to handle the most demanding and complex transactions and provide expert, efficient and cost-effective services to all our clients. We regularly win awards for the quality of our client service, our work and our people.
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
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