The Central Bank of Ireland (CBI) has published revised investment limits for qualifying investor alternative investment funds’ (QIAIF) exposure to digital assets.
In a LinkedIn post, Catharine Dwyer, senior policy advisor, Markets Policy Division, CBI, highlighted the key points as:
1. up to 20% of NAV for open-ended QIAIFs,
2. up to 50% of NAV for closed-ended QIAIFs or QIAIFs with limited liquidity,
3. pre-submission process for digital asset investment is removed.
Linking to the published materials, the post detailed that to avail of these limits the alternative investment fund manager (AIFM) must (a) have an effective risk management policy addressing (at least) liquidity, credit, market, custody, operational, exchange risk, money laundering, legal, reputational and cyber risk, (b) carry out appropriate stress testing, (c) effective liquidity management policy, (d) clear prospectus disclosure, and (e) where the QIAIF is open-ended, ensure the portfolio as a whole is suitable to provide that level of liquidity.
This applies to indirect investment at the moment and must have the ability to satisfy depositary obligations yet to be demonstrated to CBI.
The full publication is available here.