Irish Loan Origination Funds Move a Step Closer

August 08, 2014

Dechert commented on the Central Bank's Discussion Paper on Loan Origination by Investment Funds in our OnPoint “After AIFMD, the Central Bank turns its attention to loan origination funds” (July 2013).

The Central Bank received 14 responses to the Discussion Paper. Subsequently, the Central Bank has consulted widely and the very welcome outcome of these deliberations is that they are minded to permit the establishment of alternative investment funds ("AIFs") whose sole strategy is loan origination. The Central Bank has published two documents. The first is a Consultation Paper (CP 85) which sets out a number of questions for consideration and the second is the draft Amendments to the Central Bank’s AIF Rulebook (the "draft Rules") for the new category of funds to be known as “loan originating Qualifying Investor Alternative Investment Funds” which for the purpose of this OnPoint will be called “Loan AIFs”. Loan AIFs will provide a valuable non-bank financing option within a regulated framework with inbuilt investor protections and safeguards aligned with banking practices.

It is pleasing to note that while the Discussion Paper ran to a lengthy 35 pages, the Consultation Paper is a much more manageable 6 pages.

A copy of the Discussion Paper and the draft Rules amendments can be found on the Central Bank’s website.

The consultation remains open until 25 August 2014. The Central Bank invites comments from all stakeholders and Dechert would be happy to convey the views of stakeholders to the Central Bank.

This OnPoint will follow the order of the draft Rules and will comment on the aspects of the Consultation Paper relevant to each of the draft Rules.

Read "Irish Loan Origination Funds Move a Step Closer".