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Dublin, 7th August, 2018

July saw the implementation of CP86 Regulation (CP86) by the Central Bank of Ireland (CBI) relating to the governance and effectiveness of Irish authorised fund management companies (ManCos)




The aim of CP86 is to ensure ManCos comply with existing regulatory obligations. The CBI’s guidance is focused on improving three main areas:

  • Governance: how the directors of ManCos perform their roles.
  • Compliance: how Designated Persons (DPs) carry out their managerial functions to demonstrate compliance with their regulatory obligations.
  • Supervisability: how ManCos engage with the CBI and the CBI’s access to records, directors and DPs.


  • Directors’ time commitments: The CBI does not set a hard limit on the number of board appointments which a director may hold. However, it has defined its threshold for “High Risk Directors” as directors with 20 directorships or more and an aggregate professional time commitment in excess of 2,000 hours per annum. ManCos with such individuals on their boards will be prioritised when it comes to themed inspections by the CBI.
  • An independent director (who can be the chairperson of a board) should undertake an additional role of ongoing review of organisational effectiveness, including reporting to board members.
  • Managerial functions: Director and Managerial Duties are separated. The managerial functions for all funds are consolidated into the following 6 managerial functions:
  1. Investment Management;
  2. Fund Risk Management;
  3. Operational Risk Management;
  4. Regulatory Compliance;
  5. Distribution; and
  6. Capital and Financial Management


  • The rationale for board composition: A fund’s Business Plan (BP)/Program of Activity (PoA) must provide the rationale for the composition of its board to document how the combined skillset of the board as a whole ensures that the directors can implement the managerial functions of the fund effectively.
  • Delegate oversight:  The delegate oversight guidance focuses on the role of boards where significant tasks are delegated externally and this sets out a framework for good practice in relation to the monitoring and oversight of delegates. The CBI clarifies that key delegates include the fund administrator, investment manager and distributor.


  • Operational issues: This guidance outlines the CBI’s minimum expectations with regard to the retention, maintenance, security, privacy, preservation and accessibility of documentation and records pertaining to ManCos and their funds under management.
  • Procedural matters: This guidance reflects the CBI’s existing procedures relevant to ManCos’ authorisation and passport applications.


CP86 provides a useful framework for all funds and boards of directors to consider. Here are examples of questions that a board should consider:

  • Even though each individual board member might be eminently qualified to act as a fund director, have you got the right mix of people and are they devoting the right amount of time to the job?
  • Is the board getting the reporting it needs from the service providers to the fund?
  • Are service providers doing everything the fund needs as the impact of regulatory changes dramatically alters the compliance needs of funds and their boards?
  • Does the board have adequate resources already in place or are additional resources needed?
  • Do reporting lines and oversight arrangements need to be amended?
  • Do you have systems and controls in place that are adequate to meet operational requirements? How easily can records be retrieved for provision to the CBI and what is the quality of those records?
  • How accessible are the directors and DPs to the CBI?


Centaur understands the importance of corporate governance for funds and their investors and ensures that clients are kept up to speed with best practices, whether in Ireland or elsewhere.


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