Chapter 1: General Requirements

Interpretation

1. This Guidance relates to the Central Bank’s Investor Money Requirements which are set out in Part 7 of the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Investment Firms) Regulations 2023) (the “Regulations” or the “IMR”). Defined terms in the Regulations have the same meaning in this Guidance.

   Examples of circumstances in which money is investor money

   Cheques, electronic transfers and other payable orders

2. Cheques and other payable orders received from investors will be investor money from the time of receipt of the cheque or other payable order by the fund service provider. Money sent to an investor by way of cheque, electronic transfers or other payable order does not cease to be investor money until the cheque, electronic transfers or other payable order is presented and paid by the third party (as defined in Part 7).

   Interest

3. If a fund service provider has agreed in writing to pay interest to investors, such interest is investor money when the interest is paid into the third party collection account. Payment of accrued interest to investors prior to its receipt should not be paid from the third party collection account unless funded prior to distribution.

   Examples of other money

4. The below are examples of other money and are not an exhaustive list. If in doubt, a fund service provider should be prudent in its approach and act in the best interest of the investors.

   Investment fund asset

   • If a bank account is in the name of an investment fund, Part 7 of the Regulations does not apply.

   Money payable to a fund service provider or to other party

   • Money that is due and payable to a fund service provider itself, or to a third party, is other money where it is due and payable in accordance with the following provisions:
     • the amount is in accordance with a formula or basis previously disclosed to the investor by the fund service provider; or
     • a statement showing the amount of fees and commissions has issued to the investor and a number of working days, no less than ten (as determined by the fund service provider and recorded in its Investor Money Management Plan (IMMP)) has elapsed, and the investor has not raised any queries; or
     • the precise amount of fees or commissions has been agreed by the investor in writing, or has been finally determined by a court of competent jurisdiction.

   Examples of money, once known, which may be due to a third party include, but are not limited to, the following:

   • Commission;
   • Transaction Charges;
   • Performance Fees;
   • Management Fees; and
   • Contingent Deferred Sales Charges.

• Cheques

  • A cheque or other payable order received from an investor, where it is not honoured by the paying third party.

  Transferred money

  • Investor money paid ceases to be investor money where the money is paid or transferred, from the third party collection account to:

• a bank account in the name of the investor (not being an account which is also in the name of the fund service provider);
• a third party upon the written instructions of the investor and is no longer under the control of the fund service provider.

Issued: 4 July 2023

Last revision: 4 July 2023