Speaking at the Irish Fund Industry Association’s annual global fund conference in September, Kenny said his government is “committed to ensuring that the legal, regulatory and tax environment for a strong fund industry to operate” continues to exist.
The challenges faced by Ireland as a fund domicile, as well as other countries such as Luxembourg, relate to the current wording of the AIFMD Level II on fund delegation.
Specifically, the directive, as published by the EU Commission earlier this year, introduces rules which will essentially require an alternative asset manager to have its fund manager – that is, the team managing the assets – based in the same jurisdiction as where the fund is domiciled.
The introduction of this rule went against advice given by the European Securities and Markets Authority and, should it be put into law, would severely reduce the attractiveness of Ireland as a domicile for alternative funds, as well as other jurisdictions.
In reference to this threat, Kenny said Ireland, along with a number of other countries, had raised concerns with the EU Commission over the wording.
“What is required is the decision to balance regulation and delegation,” said Kenny.
“You can take it from me that the Government is serious in its intent to continue to press the Commission to understand that there are a number of alternatives that are appropriate that could be implemented that would not do down the regulatory impact of the monitoring capacity, but would also allow for the delegated issues that you deal with in the industry here,” he added.
The issue of fund domicile is, according to wealth manager Iain Tait, partner at London & Capital, one which is much more pertinent to advisers, with more attention now being given to diversifying domiciles.
