Investment companies incorporated pursuant to the provisions of Part XIII of the Companies Act 1990 are commonly referred to as Non UCITS funds, as distinct to those investment funds (including companies) which are governed by the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 (the UCITS Regulations).
With a small number of exceptions, Part 24 of the Act is largely a consolidation and restatement of the existing Companies Act legislation applicable to Non UCITS investment companies.
The Act gathers together in one place the legislative provisions governing investment companies which are currently spread across several different pieces of legislation, including:-
While Part 24 deals specifically with investment companies, the provisions of Parts 1 to 14 and 17 of the Act are also applicable to investment companies, save where specific provisions are disapplied to public limited companies or disapplied or modified within Part 24 (for example certain requirements in relation to share capital which are inconsistent with the workings of an investment company).
Investment companies authorised under Part XIII of the Companies Act 1990 should note some of the new features of the Act which will be applicable to them:-
Part 24 provides that, those investment companies which are already incorporated under the current Companies Acts will be deemed to have continued in existence as investment companies to which the new legislation applies.
For the first time, a model form Memorandum and Articles of Association for investment companies is provided for under Irish company law (see Schedule 16 of the Act). The existing model constitutions set out in the Schedule to the Companies Act 1963 did not specifically provide for investment companies.
The constitutions of existing investment companies are deemed to continue in force, save to the extent that they are inconsistent with what are called "mandatory provisions" (i.e. provisions that are not "optional provisions" under the Bill).
For those investment companies which have securities admitted to trading on regulated markets, it will also be necessary to comply with certain provisions of Part 23 of the Act which relate to the implementation into Irish law of the EU Prospectus, Market Abuse, and Transparency Directives.
It will be interesting to see the impact of the new ICAV legislation, once enacted, on investment companies. The ICAV will be a new corporate structure specifically designed for Irish investment funds. Existing investment funds set up as companies will have the option to convert to the new ICAV structure, while new funds may choose to incorporate under the ICAV legislation rather than the new Companies Act. Thus, Part 24 may well become less significant for the Irish investment funds industry.