Note: A distinction has been made between Irish domiciled funds, which are regulated by the Irish Central Bank (Irish regulated funds), which may or may not be listed on the Irish Stock Exchange (ISE), and non-domiciled listed funds which are regulated by the Irish Stock Exchange (listed foreign funds).
Key administration responsibilities including NAV calculation, transfer agency, maintenance of accounting records, including responsibility and review of the financial statements must be based in Ireland. Dividends must be issued from the country.
There is no requirement for listed foreign funds (as defined above) to maintain their books and records in Ireland.
Irish regulated funds are required to produce annual and semi-annual financial statements under the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 2011, the Unit Trusts Act, 1990, the Companies Acts, 1963 to 2012 or the Investment Limited Partnership Act, 1994.
The Irish Stock Exchange listing rules (section 5.23) require all listed funds (foreign and Irish) to issue annual and semi-annual financial statements.
However, qualifying investor funds have been exempted from producing semi-annual financial statements.
For Irish corporate vehicles, the directors are responsible for the preparation of the financial statements and two directors are required to sign the directors' report and financial statements. For unit trusts and common contractual funds, the manager takes responsibility for the preparation of the statements, and two directors of the manager should sign the financial statements. The partners of an investment limited partnership are responsible for the preparation of the financial statements.
For listed foreign funds, responsibility is determined by the law of the country of domicile of the funds.
Irish regulated funds can choose their own year-end. Once chosen, they cannot alter the year-end without the prior approval of the Central Bank of Ireland (the Central Bank).
For all listed funds, the first annual report must be for a period not exceeding 18 months from the date of first issue of units. An interim report must be produced for the first six months of operation, and thereafter semi-annually.
Where the first period exceeds 14 months, an interim report for the second six-month period must be prepared. If the listed fund wishes to change its year-end, it must receive prior approval of the ISE.
The financial statements are required to provide comparative information. The information must be the equivalent information in the preceding accounting period.
The reporting or presentation currency is generally specified in the prospectus of the fund. It can be any legal currency in existence at the end of the financial year. A fund's measurement currency is determined by the relevant accounting standard rules.
Although there are rules on what constitutes acceptable accounting standards (see section 1.4 of this document), there are no accounting publications specific to the funds industry issued by the accounting bodies in Ireland. An industry body, the Irish Funds Industry Association, occasionally publishes guidance papers dealing with specific accounting topics – these are non-mandatory.
Funds-specific Irish legislation sets out certain presentation and disclosure requirements for financial statements. Also, The Central Bank publishes Notices (UCITS and non-UCITS) includes additional requirements. Corporate entities must also comply with certain accounting provisions of the Companies Acts 1963 to 2012.
All listed funds must comply with disclosure requirements contained within the Exchange’s listing rules.
There are no provisions in legislation for short-form accounts.
For Irish regulated corporate entities, financial statements must be prepared for the company as a whole and information on each sub-fund should be included within the company’s financial statements. There is no ability to produce separate financial statements for each sub-fund.
For Irish regulated unit trust umbrella funds, the funds can opt to produce financial statements for the umbrella as a whole or produce separate financial statements for each sub fund.
For listed foreign funds, the financial statements must comprise the financials for the umbrella as a whole, including all sub-funds. However, in practice, in certain circumstances the stock exchange will accept separate financial statements for sub-funds that are not part of a corporate.
Financial statements are required which incorporate all classes of shares.
There is no requirement to produce financial statements for each class of share.
The annual financial statements of collective investment funds regulated by the Central Bank require annual audits conducted in accordance with International Standards on Auditing or International Standards of Auditing (UK and Ireland). Audited financial statements must be filed within four months of year-end. There is no requirement to audit the interim financial statements.
The annual financial statements of listed foreign funds must be audited in accordance with International, Irish, United Kingdom, United States, Canadian, or any other auditing standards acceptable to the exchange. Open-ended funds not regulated by the Central Bank must be filed within six months of the year-end, whereas close–ended fund must be filed within four months of the year-end. The auditor must be independent of the fund, and may be Irish or foreign. The interim accounts do not require an audit.
Funds are not required to file their annual or semi-annual financial statements with the Irish Companies Registration Office.
Irish regulated schemes are required to make available their financial statements to the public at the places specified in the prospectus within four months for annual and two months for semi-annual financial statements. They must be supplied to unit-holders free-of-charge on request. The latest annual and semi-annual financial statements must be offered to investors’ free-of-charge before the conclusion of a contract. The accounts may be distributed electronically if permitted by the prospectus.
Collective investment funds are required to submit their financial statements to the Central Bank within four months of the year-end and within two months of the half year-end.
For open-ended listed funds, the annual report must be published and circulated to unitholders within six months of the end of the period. The semi-annuals must be published and circulated within four months (either circulated to unit-holders or published via advertisement in at least one international newspaper).
Open-ended listed funds must submit their financial statements to the Irish Stock Exchange within six months of the year-end and four months of the period end for semi-annuals.
The European Union (EU) Transparency Directive (EU/Directive 2004/109/EC) harmonizes information provided by entities listed on regulated markets in the EU for years ending on or after 31 January 2008. While an open-ended fund is exempt from these requirements, a closed-ended entity falls into scope regardless of whether it has its registered office within the EU or outside the EU (in a third country). Therefore third-country closed-ended funds that are only listed on the Irish Stock Exchange are likely to find that Ireland is their home country regulator from the point of view of compliance with the requirements of the Transparency Directive. These requirements include (but are not limited to):
* However there are certain equivalence and transitional reliefs available to third-country registered entities, depending on the existing requirements in place in the country in which it has its registered office. This issue will need to be considered on a case by case basis to determine whether any reliefs are available to foreign funds seeking a listing in Ireland.
The Irish Auditing and Accounting Supervisory Authority (IAASA) has regulatory responsibility in terms of reviewing the interim and annual reports of closed ended vehicles to ensure they are in compliance with the Transparency Directive’s requirements.
Following the adoption of EU regulations, all EU companies listed in regulated markets, preparing consolidated accounts must do so in accordance with International Financial Reporting Standards as adopted in the European Union (EU IFRS).
Irish regulated funds (that do not fall into the above category) must prepare their financial statements in a GAAP that is permitted by Irish Law; the typical choices are Irish/United Kingdom, EU IFRS, United States, or Canadian GAAP.
For listed foreign funds, Irish/United Kingdom, IFRS, United States, Canadian, or any other GAAP acceptable to the Irish Stock Exchange may be used.
The following items must be included in the annual financial statements:
|Required by law||Required by Irish GAAP*||Complied with for best practice|
|Futures are shown on balance sheet using the grossed up notional amount||No||No||No|
|Futures are shown on the balance sheet based on a fair value basis||Yes||Yes||Yes|
|Futures are shown on the balance sheet based on the margin outstanding and the margin paid to date||No||No||No|
|Organization costs are written off immediately||Yes||Yes||Yes|
|Organization costs are amortized over one or more years||No||No||No|
|Issue costs are charged to the statement of operations||No||No||No|
|Issue costs are netted off against creation proceeds||No||Yes||Yes|
|Contingent deferred sales charges are recorded as income||No||No||No|
|Contingent deferred sales charges are netted off against redemption proceeds||No||Yes||Yes|
|Holdings in other collective investment funds are likely to be consolidated if the fund holds > 50 percent of the underlying collective investment fund's shares||Yes||Yes||Yes|
|Methods used in financial statement presentation to measure listed investments are:|
|bid||No||Yes (for longs)||Yes (for longs)|
|offer||No||Yes (for shorts)||Yes (for shorts)|
|price at any time during the day||No||No||No|
|The financial statements distinguish between income and capital||No||No||Yes|
* Note that the IFRS position would be broadly similar except that investments held must be fair valued.
The following details relevant laws and regulations for collective investment funds and fund management companies and provides web addresses (in certain instances) for where this material can be located.
Central Bank of Ireland.
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