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Ireland as a centre for Green Finance

Ireland is internationally recognised as one of the world’s leading investment fund and management company domiciles.


IRELAND AS A CENTRE OF EXCELLENCE There are a range of determinants that create Ireland a irresistible prospect for tenable money cash reserves and their managers. A National Focus on Sustainable Finance • The Fossil Fuel Divestment Act 2018 happened in Ireland flattering individual of the first nations in the realm to retire public services from grant in hydrocarbon deposits. • A increasing green bond area (Ireland circulated allure first sovereign green bond for €3 billion that was massively oversubscribed) and leaning of any of private green bonds on the Irish Stock Exchange. • The Irish Government’s Ireland for Finance procedure puts tenable finance at the courage of a detailed plan that will run just before 2025. Key Investment Fund Metrics • Ireland engages over 16,000 direct adequate-opportunity workers in the finances subdivision. • Over 950 managers from 50+ nations have property executed in Ireland. • 17 of the top 20 all-encompassing advantage managers have Irish shelter assets. • Ireland is the best stock or bond fund presidency centre in the realm fix over 40% of worldwide stock or bond fund property. • Ireland is home to many of the experience’s superior permissible, supervisory, tax, consultancy, financial person, slanting and connected economic aid providers. Legal and Regulatory Framework • EU Member State, Eurozone, OECD and FATF Member Country. • Common law method. • The CBI is a everywhere recognised manager of means and grant managers and is frequently at the prominence of supervisory idea guidance circumference. The CBI has settled a loyal group to entice tenable finance and ESG procedure. Tax • Ireland’s earnings tax rule is fixed, understandable and adequately obedient accompanying OECD directions and EU society.

Tax

• Ireland’s funds tax regime is stable, transparent and fully compliant with OECD guidelines and EU law.

• Legislation-based system which does not rely on rulings.

• One of the first adopters of FATCA and the OECD’s Common Reporting Standard ("CRS") regime.

Location

• Favourable time zone for US and EU headquartered firms.

• Infrastructure including: human resources, residential and commercial property availability, and flights and access.

• Leading global centre for technology and financial service


Regulatory regime

UCITS are open-ended collective investment schemes established and authorised pursuant to EU law.

Over the past 30 years, the UCITS product has become increasingly popular as a liquid, transparent, diversified and robustly regulated investment fund with Ireland at the forefront of UCITS product development.


Asset Eligibility: At least 90% of assets must be in liquid (UCITS eligible) instruments such as listed equities, fixed income, money market instruments, regulated funds and derivatives on eligible assets or financial indices.


Asset Diversification: Generally no single asset can represent more than 10% of the fund’s assets; holdings of more than 5% cannot in aggregate exceed 40% of the fund’s assets.


Investor Requirements: No minimum subscription or investment level is applied under UCITS regulation (although funds may fix levels themselves); no investor eligibility criteria is applied.


Borrowing and Leverage Limits: Temporary borrowing is limited to 10% and not permitted for investment purposes. A general leverage limit of 100% is applied, although use of Value-at-Risk (“VaR”) to measure global exposure for more complex strategies gives appropriate flexibility for notionally higher levels of leverage.


Distribution: May be sold across the European Economic Area (“EEA”) on the basis of the UCITS marketing passport and received special recognition in non-EEA centres owing to regulatory status. As a result, a UCITS has global distribution capability.


Service Providers: Irish based, regulated depositaries, administrators and auditors provide independence in key support and oversight functions.


Alternative Investment Funds(AIF'S)


Ireland has two main categories of regulated AIFs: (a) Qualifying investor alternative investment funds (QIAIFs); and (b) Retail investor alternative investment funds (RIAIFs).


Regulatory regime:

QIAIFs) Regulated by the CBI pursuant to AIF Rulebook and related domestic laws, rules and guidance.

RIAIFs) Regulated by the CBI pursuant to AIF Rulebook and related domestic laws, rules and guidance.


Available structures

QIAIFs) QIAIFs can be structured as single funds or as umbrella funds with segregated sub-funds. They can also be established as part of global master-feeders, coinvestment or joint-venture structures.

RIAIFs) RIAIFs can be structured as single funds or as umbrella funds with segregated sub-funds. They can also be established as part of global master-feeders, co-investment or joint-venture structures but have greater diversification and underlying fund eligibility restrictions in comparison to QIAIFs.


Share capital/Units

QIAIFs) QIAIFs can issue multiple classes of shares/units with differing features and characteristics (e.g. fees, currency denomination etc.). QIAIFs may in limited circumstances allocate assets to share classes.

RIAIFs) RIAIFs can issue multiple classes of shares/units with differing features and characteristics (e.g. fees, currency denomination etc.).


Eligible Investors

QIAIFs) Qualifying investors including "professional investors" under AIFMD and other categories of sophisticated investors permitted by the CBI.

RIAIFs) Retail Investors.


Legal Structures

Irish Collective Asset-management Vehicles ("ICAV")

  • Created by bespoke investment fund legislation.

  • Suitable for use across a wide range of strategies including mutual funds, liquid alternatives, hedge funds, fund of funds and others.

  • Both UCITS and AIF apply.

Investment Companies (PLCs)

  • Investment company established under Part 24 of Ireland's Companies Act 2014 No. 2 of 2014.

  • The Act allows for the establishment of fixed and variable capital Public Limited Companies (“PLCs”).

  • Both UCITS and AIF apply.

Unit Trusts

  • Leading common law unit trust structure.

  • The structure is created by a contractual trust deed between a manager and trustee.

  • Used globally, but has historically been most popular for Asian based investors and managers.

  • Both UCITS and AIF apply.

Investment limited partnerships

  • Ireland's flagship common-law.

  • Is established by a general partner and one or more limited partners (who have limited liability).

  • Popular for real estate and infrastructure.

  • Adapts key investment fund requirements for use in partnerships.

  • UCITS does not apply, AIF applies.

THE EU COMMISSION’S SUSTAINABLE ACTION PLAN

Main Objectives of the Action Plan

  • Create an environment to raise the estimated €175 and €290 billion per year of private capital needed to finance a sustainable infrastructure and related investment. A significant percentage of this will come from investment funds.

  • Foster transparency and “long-termism” in financial and economic activities.

  • Manage financial risks from climate change, resource depletion and environmental degradation.

  • Factor ESG objectives into the above measures.

Reference

https://maples.com/-/media/files/pdfs/esg/ireland-as-a-centre-for-green-finance-a-guide-to-sustainable-investment-funds.pdf






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