On 8 May 2025, Ireland's Department of Finance (Department) published the outcome of its eight-week consultation on its exercise of Directive (EU) 2024/927 (AIFMD II) national discretions in the form of its Feedback Statement and accompanying Regulatory Impact Assessment.
Member states are required to decide on four national discretions provided by AIFMD II.
- Discretion 1: Ancillary activities and non-core services for alternative investment fund managers (AIFMs)
Ireland will exercise this discretion in full. The Central Bank of Ireland (Central Bank) will be permitted to authorise external AIFMs to provide additional ancillary activities (administration of benchmarks and credit servicing activities) as well as the performance of non-core functions and activities for third parties that AIFMs already perform in relation to an alternative investment fund (AIF), subject to the appropriate management of any potential conflicts of interest in accordance with Article 1(2) of AIFMD II.
- Discretion 2: Prohibition on loan origination to consumers
Ireland will exercise this discretion in full. All AIFs (regardless of domicile) will be prohibited from granting loans to Irish consumers. This effectively maintains the status quo and is expected to address consumer protection and reputational concerns.
- Discretion 3: Appointment of depositaries established in other member states
Ireland will not exercise this discretion. The discretion is intended to address situations where there is a lack of depositary service providers in smaller, more concentrated markets. Accordingly, as the Irish domestic market is already well-served (25 depositaries, €5.3 trillion in assets under custody), the Central Bank will not permit Irish-domiciled AIFs to appoint depositaries established outside of Ireland.
- Discretion 4: Ancillary and non-core Services for UCITS management companies
Ireland will exercise this discretion in full. The Central Bank will be permitted to authorise UCITS management companies to provide additional ancillary activities (administration of benchmarks). Additionally, the list of non-core services a UCITS management company may perform will be extended to include reception and transmission of orders in relation to financial instruments, as well as the performance of functions and activities for third parties that a UCITS management company already performs in relation to a managed UCITS, subject to the appropriate management of any potential conflicts of interest in accordance with Article 2(2), thereby promoting alignment with AIFMs.
Next steps
Department officials, with technical assistance provided by the Central Bank, will draft and implement the necessary legislation to transpose AIFMD II into Irish law by the deadline, ensuring timely and efficient implementation.
The Department has set out a pragmatic and strategic approach to transposing AIFMD II, informed by stakeholder input. By leveraging national discretions, aligning with EU standards, and supporting domestic service providers, Ireland is well-positioned to maintain its status as a leading European funds jurisdiction while ensuring robust investor protection and regulatory certainty.
Our Irish Asset Management & Investment Funds team have updated our comprehensive timeline outlining the key milestones, leading to implementation of AIFMD II across the EU, assisting fund managers plan effectively for the regulatory road ahead - AIFMD II: Timeline to Implementation - One year on.
If you have any queries on the content of this advisory and/or the impact that it may have on you and your business, please speak to your usual contact in Walkers or connect with any of our key contacts below.
