The Final Report on the Funds Sector 2030 review was published on 22 October 2024. The purpose of the review was to examine Ireland’s funds sector framework to ensure it is up-to-date, taking account of the significant developments in recent years to support the long-term growth in the sector. The terms of reference for the review were published in April 2023 and a three-month public consultation was issued in June 2023, receiving 193 submissions from across the sector. The Review Team, made up of officials from the Department of Finance, also undertook significant engagement with stakeholders to seek further detail on the measures proposed in the consultation responses.

The Report contains 42 recommendations across nine separate headings, including “legal structures and products”, “Ireland’s regulatory and supervisory regime” and “enabling more retail investment”. This briefing will discuss the set of recommendations related to Ireland’s product offering, which focused on enhancing Ireland’s leading role in public markets (as a domicile for exchange traded funds (“ETFs”) and money market funds (“MMFs”)), while at the same time undertaking targeted measures to support further growth in private assets, primarily through regulated structures.

For the ETF sector, the Report recommends that the Central Bank of Ireland (the “Central Bank”) should continue to: (1) play a leading role in relation to the regulation of ETFs; (2) keep under consideration its requirements regarding portfolio transparency for ETFs, recognising the possibility of alternative approaches; and (3) engage on UCITS ETF fund naming requirements in EU level discussions, with the objective of ensuring a harmonised approach across the EU[1]. These proposals will continue to support the growth of ETFs in Ireland and send a strong growth signal to the Irish ETF sector and could foster a more open and competitive retail investment market.

In addition, the Report recommends that the Department of Finance and the Central Bank should continue to actively engage in EU fora to ensure a robust legislative framework for MMFs.

The Report also highlights the importance of supporting further growth of private assets in Ireland. Key recommendations in this regard include that: (1) the Central Bank should review its AIF Rulebook and associated requirements that impact on the establishment of private asset funds in Ireland; and (2) a package of measures should be taken forward to improve the attractiveness of the Investment Limited Partnership (“ILP”). This should include consideration of how the participation exemption could support the use of ILPs and a review of the scope of the dividend withholding tax (“DWT”) exemption.

The Report presents significant opportunities to enhance the investment landscape in Ireland, particularly to build on Ireland’s leading position for ETFs, MMFs and other UCITS products. This is particularly welcome given the Report’s recognition that the growth in ETFs, both passive and active, is one of the key structural drivers of change for the funds sector identified in the Report.

In addition, we welcome the Report’s recommendations set out above aimed at supporting the growth of private assets in Ireland and, in particular, the opportunity to continue to work with the Central Bank to implement changes to the AIF Rulebook in line with the recommendations in the Report.

Next Steps

The Report was brought to Government by the Minister for Finance on 22 October 2024 to seek its approval to publish the report and implement and/or further consider its recommendations. The Minister for State for Financial Services, Credit Unions and Insurance, Neale Richmond, has subsequently noted that “Through our recently published Funds Review, the Department of Finance will be working to better align our policies to support a more vibrant retail investment culture in Ireland…”. We look forward to these planned enhancements to the existing funds regime and the continued growth of the funds sector in Ireland.