The Irish Stock Exchange (the Exchange) has recently amended its listing requirements and procedures for investment funds (listing requirements) in relation to the submission of audited financial information by any fund or sub-fund which is proposing to apply or is applying for admission of any class of unit to the official list of the Exchange (an applicant). In addition, the Exchange has also amended its rules regarding auditor's consent letters.

Policy Note 1/07 amends Rule 5.4, Rule 5.6 and deletes Rule 5.14 of the listing requirements. These changes, which came into effect on the 22 February 2007, have been introduced in response to industry feedback noting the difficulty for applicants in complying with the listing requirements. In essence, applicants had frequently yet to receive audited annual accounts that were less than 12 months old at the date of the proposed listing particulars in respect of the fund or sub-fund unit class that they proposed to list on the official list of the Exchange.

• Rule 5.4 requires applicants that have commenced operations (i.e. investment activity) to provide audited annual accounts (save where Rule 5.6 applies (see below)) relating to the last financial year of its operations. This Rule has been amended by providing that the period to which such audited annual accounts relate can now end up to eighteen months prior to the date of the listing particulars. Previously, this period was only twelve months. The other provisions of Rule 5.4, including the required contents of such audited annual accounts, remain unchanged.
  
  
• Rule 5.6 applies to applicants who have been in operation for less than twelve months at the date of the listing particulars and accordingly whose audited annual accounts are not available prior to the date of the listing particulars. Such applicants were previously required to submit an audited statement of net assets prepared as of a date no more than three months before the date of the listing particulars. This statement of net assets had to (i) include a detailed analysis of the applicant's assets and liabilities, (ii) account for such assets and liabilities in accordance with certain accounting standards, and (iii) include, on an audited basis, the information required in Rule 5.20 (a) or (b); in short either a list of all investments with particular information with respect to such investments or a comprehensive and meaningful analysis of the investment portfolio having regard to Rule 5.21.
  
  Applicants under Rule 5.6 need now only provide unaudited portfolio details in accordance with either Rule 5.20 (a) or Rule 5.20 (b), as outlined in brief above. The new Rule 5.6 requires that the period to which the unaudited portfolio details relate must end not more than one month prior to the date of the listing particulars. Accordingly, as such an unaudited portfolio is prepared up to a period so close to the date of the listing particulars, the power of the Exchange to ask for directors confirmation that the statement provided under Rule 5.6 is, in their opinion, representative of the financial and trading position of the applicant at the date of the listing particulars, has been removed.
  
  In practice, the Exchange interpret the new Rule 5.6 such that applicants that are in operation for a period of time less than eighteen months at the date of the listing particulars and whose audited annual accounts are not available at that date can submit an unaudited portfolio in accordance with the Rule 5.6 requirements. It is unclear as of yet if such a practice will be noted by way of policy note to further amend Rule 5.6.
  
  
• Prior to the 22 February 2007, Rule 15.14 enabled feeder funds in operation for less than twelve months at the date of the listing particulars that invest all of their assets, other than ancillary liquid assets, in any underlying fund to choose to submit either an accountant's report (in accordance with the listing requirements) in place of audited financial information for the feeder fund. Rule 5.14 has now been deleted and all feeder funds in operation for less than twelve months can submit unaudited portfolios in accordance with Rule 5.6 where their audited annual accounts are not available prior to the date of the listing particulars.

April 2007.

For further information please contact David Williams.