The Central Bank’s Proposed AIF Rulebook Updates

Our Investment Funds team examines key changes proposed by the Central Bank to its AIF Rulebook which enhance Ireland’s capabilities in the private asset industry.

The AIF Rulebook sets out the Central Bank’s rules for Qualifying Investor AIFs (QIAIFs), Retail Investor AIFs and European Long-Term Investment Funds (ELTIFs) alongside service providers to such funds. Following engagement with the domestic funds industry, the Central Bank is proposing to overhaul its AIF Rulebook in the coming months primarily:

• For alignment with AIFMD 2.0 which needs to be implemented by 16 April 2026, and
• Following on from the publication by the Irish Department of Finance of its Fund Sector 2030 Report in October 2024

A key recommendation in the 2030 Report was to support the continued growth of private assets in Ireland. In particular, the Report directed the Central Bank to review its AIF Rulebook and associated requirements that impact on the establishment of private asset funds in Ireland. The proposed changes to the AIF Rulebook simplify the process for establishing QIAIFs in Ireland. Managers of QIAIFs looking to utilise loan-origination strategies, lenders and sponsors to Irish QIAIFs and those considering structures with underlying subsidiaries will be particularly interested given the changes proposed.

The updates to the AIF Rulebook follow on from the recent addition of an ELTIF specific chapter to the AIF Rulebook which was added on 11 March 2024.

Key takeaways

Loan-origination (alignment with AIFMD 2.0)

Ireland was one of the first jurisdictions to introduce a bespoke regime for loan-originating funds in 2014. As AIFMD 2.0 now intends to harmonise the approach across the EU for loan-originating funds, the Central Bank has removed the existing disclosures for its domestic regime from the AIF Rulebook. The removal of the loan-origination chapter demonstrates the Central Bank’s commitment to having full alignment with the loan-origination provisions set out under AIFMD 2.0. Accordingly, there will be no gold-plating in Ireland beyond the requirements set out under AIFMD 2.0 for managers looking to set up a direct lending strategy.

Removal of the restriction on QIAIFs granting loans or acting as guarantors

In a significant development for lenders to and sponsors of Irish QIAIFs, the Central Bank has proposed removing the restriction on QIAIFs granting loans and acting as guarantors on behalf of third parties. As part of its feedback, the Central Bank noted that the provision of guarantees is standard market practice for fund financing arrangements such as bridge financing and financing where the fund is part of a wider fund family, and in the context of private equity investments where financing is provided to underlying portfolio companies / investment vehicles. The Central Bank has also noted that there are no such restrictions on granting loans and acting as guarantors contained within the AIFMD 2.0 framework. This development continues a positive trend from the Central Bank in easing restrictions for QIAIFs engaging in fund financing arrangements as per our previous update in March 2025.

Removal of Central Bank pre-approval process for subsidiaries

One of the main advantages for QIAIFs in Ireland is the ability to avail of the Central Bank’s 24-hour turnaround timeframe for processing applications. However, underlying subsidiaries of QIAIFs currently need to be pre-approved by the Central Bank. Recognising that protections related to the acquisition of control, asset valuation, depositary oversight and leverage look-through requirements are provided for under AIFMD, the Central Bank has proposed removing the requirement for subsidiaries of QIAIFs to be pre-approved. Instead, QIAIFs will need to comply with specified disclosure obligations to be included in the QIAIF’s offering and constitutional documentation. The AIFM for the structure will be obliged to conduct appropriate due diligence on the subsidiary prior to investment. The AIFM will also need to have in place documented policies and procedures related to its due diligence, oversight and active monitoring of intermediary investment vehicles used by the QIAIF.

It is also proposed to remove the requirement for the QIAIF’s directors to constitute the majority of the subsidiary's board. The restriction preventing subsidiaries from entering into contracts unless the QIAIF is party to those arrangements will also be removed.

Warehousing

Currently, the AIF Rulebook requires QIAIFs to disclose in their offering documents that the fund will not pay more than the current market value for warehoused assets. As part of its feedback, the Central Bank notes that the AIFM has an existing obligation to perform valuation impartially and with all due skill, care and diligence. As such, and for consistency with the ELTIF Chapter, it is proposed to remove the current market value requirement. The revisions also provide further clarity on the fee disclosures to be included in the offering documents of QIAIFs engaged in warehousing arrangements.

Share class changes

Acknowledging that private asset funds may have longer ramp-up periods, the Central Bank has proposed removing the current initial offer period (IOP) limit of two years and six months for closed ended and open ended with limited liquidity QIAIFs which aligns with the approach taken in the ELTIF Chapter. To safeguard investor interests, a new provision will require the AIFM to return an investor’s subscription proceeds if requested by the investor where the IOP has expired or where the IOP has been extended but the QIAIF has not issued units to that investor.

Many readers will be familiar with the Central Bank’s guidance on share class features of closed-ended QIAIFs. The guidance provides for differentiated participation by share classes to reflect:

• The issue of shares at a price other than net asset value without the prior approval of the Central Bank
• Excuse and exclude provisions
• Stage investing, and
• Management participation

Aligning with the approach taken in the ELTIF Chapter, the Central Bank guidance on share class features of closed-ended QIAIFs will be formally incorporated into the QIAIF chapter and extended to open-ended funds.

Extension of registered AIFM provisions to non-EU AIFMs

Under AIFMD, Member States may allow non-EU AIFMs to manage and/or market AIFs to professional investors within their jurisdictions. It is proposed to extend certain requirements applicable to registered (sub-threshold) AIFMs to non-EU AIFMs that manage QIAIFs.

Comment

The proposed changes to the AIF Rulebook represent a significant positive shift to the current QIAIF regime in Ireland. Coupled with Ireland’s best-in-class regulated investment limited partnership and Irish collective asset-management vehicle products, deep pools of existing and well-resourced serviced providers and its close cultural connections to the UK and US, Ireland is well positioned to continue its upward trend in the private asset industry.

The Central Bank has requested responses to the consultation paper by 5 November 2025.

Contact our Investment Funds team

The content of this article is provided for information purposes only and does not constitute legal or other advice.