What To Look Out For In The Trialogue Negotiations On AIFMD And UCITS Reform

JurisdictionEuropean Union
Law FirmDillon Eustace
Subject MatterFinance and Banking, Wealth Management, Financial Services, Fund Management/ REITs, Wealth & Asset Management
AuthorEtain de Valera, Cillian Bredin, Derbhil O'Riordan, David Walsh, Shane Coveney and Joe O'Doherty
Published date10 March 2023

For further information on any of the issues discussed in this publication please contact the related contact(s) on this page.

Key areas to monitor during the trialogue negotiations:
  • The Council proposal to impose a leverage cap on funds which engage in loan origination, the ability for such funds to be structured as open-ended and the precise scope of the rules for any funds engaging in loan origination activities;
  • Scope of delegation reporting requirements and proposal to subject third party management companies to additional conflict of interest provisions; and
  • Ability of NCAs to require a management company to (de)activate a specific liquidity management tool in certain circumstances.

In November 2021, the European Commission (Commission) published its legislative proposal to amend both the UCITS and AIFMD frameworks (Commission Proposal). Since then, both the European Parliament (Parliament) and the Council of Europe (Council) have published revised iterations of the Commission Proposal incorporating their suggested amendments.

Proposed reforms to the AIFMD and UCITS frameworks are wide-ranging and include new rules on delegation and liquidity management, changes to the depositary regime and supervisory reporting framework as well as a proposal to introduce a pan-EU framework for loan originating AIFs1.

Trialogue negotiations on the legislative proposal begin later this week and the Swedish Presidency of the European Council has indicated that it aims to reach agreement by June 2023 when its term ends.

In this briefing, we consider some of the key issues to be monitored by Irish fund management companies and their funds during the upcoming trialogue negotiations between the EU institutions.


  • Given that Irish fund management companies are already subject to more onerous substance requirements than those proposed by all three of the European institutions, resourcing requirements are unlikely to be an area of concern. However, Irish third-party management companies2 are likely to be interested in whether the Parliament's proposal under which they will be required to employ "heightened scrutiny" for the potential for conflicts of interest and to submit "detailed explanations and evidence" of compliance to their national competent authorities (NCA) will be supported by the Commission and the Council and included in the finalised agreed legislative text. Criticised by industry bodies as being an unnecessary overlay of existing...

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