Requests for a Derogation for a UCITS

The UCITS Q&A ID1030  provides for specific circumstances under which a request for a derogation from the Central Bank (Supervision and Enforcement) Act 2013 (Section 48(1)) (Undertakings for Collective Investment in Transferable Securities) Regulations 2019 (the “Central Bank UCITS Regulations”) may be made to the Central Bank.  In addition, derogations from Regulation 35 of the Central Bank UCITS Regulations have previously been granted in the case of UCITS Money Market Funds. In such circumstances, a request for a derogation may be sought by a UCITS and will be considered on a case-by-case basis. Derogation requests will generally be considered by a Derogation Committee which meets monthly.

Information on what should be included in such a request is set out below.

Submitting a request for a derogation

Requests a derogation should be sent to [email protected] and clearly marked as a “Request for Derogation for a UCITS”. Requests for a derogation must be made in good time to allow these to be considered by the Central Bank in advance of submitting an application for authorisation. The Central Bank will endeavour to assess all requests for a derogation and/or respond to queries in relation to same in a timely manner.   

A request for a derogation must contain the following information (non-exhaustive list):

• A detailed and comprehensive submission clearly outlining the regulation in respect of which a derogation is being sought.The submission should detail what aspects of the proposal do not fully comply with the relevant regulation, set out the reason why the relevant regulation cannot be complied with, and why the proposal should be deemed acceptable;
• Copies of the prospectus/supplement(s), as relevant; and
• A letter requesting the derogation and demonstrating how the proposal does not dilute investor protections or conflict with the relevant legislative/regulatory provisions.

The Central Bank may request any other information it deems necessary in the course of assessing individual requests, including certain confirmations from the management company (where one has been designated to act in respect of a particular fund) and in the absence of any such designation, the board of the fund if required.

If the derogation request is, in principle, granted by the Central Bank then as part of the application for authorisation, the derogation must be formally sought in the letter seeking authorisation of the UCITS. 

Details of derogations granted by the Central Bank must be included in the prospectus of the UCITS.

The above process does not apply to derogations for recently authorised UCITS under Regulation 76 of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (the “UCITS Regulations”) and to derogations concerning master-feeder structures under Regulation 78 of the UCITS Regulations.  There is no requirement to make a submission in such circumstances.