Industry Briefing Seminar. Irish Funds Industry Association. hosted by the. Singapore,

Transcription

1 Industry Briefing Seminar hosted by the Irish Funds Industry Association Singapore, Tuesday, 27 th November 2007

2 Welcome Remarks» H.E. Richard O Brien, Ambassador of Ireland to Singapore» Deirdre Power, Deloitte & Chair, IFIA

3 Ireland as an International Funds Centre Seán Páircéir, Brown Brothers Harriman & Vice Chair, IFIA Tara Doyle, Matheson Ormsby Prentice Deirdre Power, Deloitte & Chair, IFIA Gerry Brady, Northern Trust

4 Background to Ireland as an International Funds Centre Seán Páircéir, Brown Brothers Harriman & Vice Chair, IFIA

5 Ireland An International Investment Funds Centre» The fastest growing International Fund Domicile» Extensive Product Range Available» UCITS: Undertaking for Collective Investment in Transferable Securities. A European fund passport with a high level of acceptance by Regulators world-wide» Equity, Bond, Money Market, Multi-Manager, Index Funds, Exchange Traded Funds, Fund of Funds, REITS, Securitised Vehicles» Non-UCITS: A regulated investment product for Alternative Asset Classes including :» Property, Private Equity, Fund of Funds, Fund of Hedge Funds, Venture Capital Funds» Super QIF Regime a significant new opportunity» A Centre of Excellence for Fund Servicing» 23 Custodian Banks, 43 Administration Companies» Supporting Investment Product sponsored by the world s top Asset Managers and sold into the world s most significant markets» Maintaining Competitiveness is a key public policy objective Dublin s Quays from the City Centre

6 Ireland A substantial and growing fund s domicile Funds Administered in Ireland Eur bn ,384bn bn bn 564bn 445bn 410bn bn bn Dublin s Spire on O Connell Street Source: Lipper/IFSRA Irish Domiciled Product Analysis 810bn Non-Irish Domiciled 574bn UCITS 649bn Non-UCITS 161bn Alternative Investment Product 700bn Irish Product the Global Context UCITS Market 6.5 trillion Germany 4% Spain 4% Italy 5% Ireland 10% Rest Of World 70% Others 15% UK 11% Ireland 30% Source: HFM Luxembourg 28% France 23% Source: EFAMA Irish Administered Alternative Assets

7 Ireland s Competitive Advantage» European Union and OECD Member State» Strong Regulatory Environment» Flexible and Skilled Workforce» Positive Demographic in population» 40% under 25 years old» Favourable employment laws International Financial Services Centre from the Liffey» Collaborative Industry Environment» Competitive between institutions» Cost» Product Innovation» Collaborative for industry initiatives» New industry products» Agreement on legislative changes» The concept of Ireland inc.» Growth in real demand from investors for flexible investment products» Irish Tax system is not exported to host countries. Local rules can apply by jurisdiction

8 The Irish Legal and Regulatory Environment for Investment Funds Tara Doyle, Matheson Ormsby Prentice

9 The Irish Legal and Regulatory Environment» IFSRA» Types of Irish legal vehicle:» Unit trusts» Common contractual funds.» Investment companies

10 The Irish Legal and Regulatory Environment» Classification of Irish Funds» UCITS» European passport» Global brand» Non-UCITS» Feeder funds» Types of Non-UCITS Funds» Retail no minimum subscription» Professional investor - 125,000 minimum subscription» Qualifying investor - 250,000 minimum subscription

11 The Irish Legal and Regulatory Environment» Marketing of Singapore Funds in Ireland and Europe» Inward marketing of Singapore funds to Irish investors» UCITS funds of funds are Singapore funds eligible assets?» Non-UCITS funds of funds and feeder funds» Prospectus Directive passport» EU private placement regime?

12 Tax Environment for Irish Investment Funds Deirdre Power, Deloitte & Chair, IFIA

13 Ireland A Tax Efficient Location for your Fund» Tax benefits of an Irish Fund» No Irish Tax on Non-resident Investors» Treaty Access to reduce Withholding Tax» Tax Transparency of the Common Contractual Fund CCF

14 Tax Benefits of an Irish Fund» No tax payable by the Irish Fund» Gross Roll Up legislation permits fund to buy/sell assets & no Irish tax.» No annual tax on net asset values e.g. no tax d abonnement.» No Capital taxes e.g. no tax on issues of shares/units in the fund» No VAT (sales tax) recovery possible» No Irish withholding on Irish source cash flows to a fund» Reorganisation/Redomicile Reliefs available - Omnibus declaration of non-resident investors - No Irish Stamp Duty on assets transferred

15 No Irish Tax on Non-Resident Investors» Non-Resident declaration on initial subscription gross payments as a result» No Irish Income Tax or Capital Gains Tax» No Irish Gift/Inheritance taxes - where both parties are either domiciled or ordinarily resident outside of Ireland In summary, no Irish tax on non-resident investors in Irish Funds. Tax on investors decided by their home country, not Ireland

16 Treaty Access to reduce Withholding Tax» 44 Double Taxation Agreements (and growing)» Access depends on:» Fund type» Particular treaty» Luxembourg limited access like Ireland» US/Ireland Double Taxation Treaty - Recognises Irish funds as treaty residents - Limitation of Benefits clause applies as normal» Review each country individually

17 Treaty Access to reduce Withholding Tax» Alternative Structures for Treaty Access Irish Fund (Non-UCITS) Profit participating note Irish Company Access to Irish Tax Treaties Section 110 Equity Investments e.g. Singapore

18 The Tax Transparency of the Common Contractual Fund CCF UK Pension Fund Dutch Institution No Irish tax on CCF CCF transparent for Irish tax purposes All income and gains arise to investors. Treaty access CCF Investment Manager(s) Treaty access Investors can be pension funds or institutions (but no individuals). US confirmed transparent status Very Important Transparency should allow investors access to tax treaty reliefs Investments Confirmation needed from each jurisdiction on transparency of CCF from an investor and investment perspective

19 The Administration and Custody of Investment Funds in Ireland Gerry Brady, Northern Trust

20 The Administration and Custody of Investment Funds in Ireland» Introduction» ISEQ listing» Servicing centre» Domicile of choice» Regulation» Fund vehicle» Fund vehicle» Promoter/investment manager» Administration company» Trustee/custodian company» Management company» Non-Irish funds» ISEQ listing

21 The Administration and Custody of Investment Funds in Ireland» Fund Administration» Transfer Agency» NAV production» Financial reporting» Trustee/Custodial Services» Fiduciary responsibility» Operational responsibility» Safekeeping» Transaction settlement» Corporate actions» Additional Services» Corporate secretarial services» Directors» Tax reporting» Back/middle office» Credit» Securities lending

22 The Administration and Custody of Investment Funds in Ireland» Market Characteristics» 46 licensed administrators» 22 licensed custodians» Mature industry» Staffing resources» Capacity» Servicing considerations» Transfer agency» AML» Equalisation» NAV production» Pricing/valuation policy» Financial reporting» Choice of GAAP» Fiduciary services» Investment/borrowing constraints» Custody operations» Contractual settlement

23 The Administration and Custody of Investment Funds in Ireland» Conclusion» Robust servicing industry» Choice» Value» Reputation

24 The Role of the Central Government in the Funds Industry George Shaw, Principal, Department of the Taoiseach (Irish Prime Minister)

25 Department of the Prime Minister (Taoiseach)» Clearing House Group (CHG)» Main strategic group located in the Office of the Prime Minister» Senior Representatives of both the public service and industry» Chaired by the Secretary General to the Irish Government» Sets strategic direction for the funds industry following consultation with all relevant stakeholders

26 Funds Working Group» Membership includes representatives of Government Departments, State agencies, the Financial Regulator and the industry» Its role is to ensure that the legal, regulatory and fiscal environment is conducive to the development of the funds industry» Through close co-operation between the various Government agencies and the industry, it adds to the breadth of experience available to the funds industry» Maintains Ireland as a competitive location for the domicile, administration and management of investment funds

27 Regulatory-Fiscal» The Funds Working Group acts as a facilitator between industry and the various Government Departments and State Agencies» Provides the industry direct contact with the Department of Enterprise, Trade and Employment on legislation, the Department of Finance and the Revenue Commissioners on fiscal matters,and the Financial Regulator on regulatory matters.» The Group also has an input through the Tax Strategy Group into the annual Finance Bill.

28 Education» Identification of importance of additional education, training and research and upskilling for the further development of the funds industry» A commitment in the strategy document Building on Success to identify existing and future skills needs and to provide a framework to support the delivery of the associated education provision to meet these needs.» Government study being concluded to identify the current and future skills needs requirement to develop a successful international financial services industry. Action will be taken as a result of its findings.

29 Coffee Break Industry Briefing Seminar hosted by the Irish Funds Industry Association Singapore, Tuesday, 27 th November 2007

30 Introduction to Irish Investment Fund Products Dan Morrisey, William Fry

31 Introduction to Irish Investment Fund Products» Introduction» Sophisticated Investor Products» Retail Products including UCITS» Pooling Products» Questions and Answers

32 Introduction to Irish Investment Fund Products» Authorisation depends on Investor Classification UCITS Retail Non UCITS Professional Sophisticated Investor Qualifying» Common Thread Ireland is a Regulated Domicile all Funds benefit from Investor Protection Regime

33 Categories of Irish Domiciled Funds by Investment Strategy Most Conservative Most Flexible UCITS Non UCITS Professional Investor Qualifying Investor Min. Sub Equiv. 125,000 Min. Sub Equiv. 250,000 for Investor + Min Net Worth Requirement for Investor

34 Categories of Irish Domiciled Funds Growth Trend: Numbers UCITS Non-UCITS Jun Jun Professional Investor Qualifying Investor Jun Jun-07 June 2007 Based on Irish Financial Services Regulatory Authority Figures

35 Categories of Irish Domiciled Funds Growth Trend UCITS Non-UCITS Retail Jun Jun- 07 Jun Jun- Professional Investor Qualifying Investor - Ni June 2007 Based on Irish Financial Services Regulatory Authority Figures

36 Funds Domiciled in Ireland Breakdown of Assets under Management All Categories 80.5% 3.9% UCITS 654 Bn 2.8% 31.6 Bn Retail Funds 0.2% 12.7% Non UCITS: 159 Bn 22.7 Bn Professional Investor Funds Bn Qualifying Investor Funds 1.3 Bn Non-Designated Funds June 2007 Based on Irish Financial Services Regulatory Authority Figures

37 Introduction to Irish Investment Fund Products» Barbell Development yet» Blurring of Distinction in Product Design - Sophisticated Product Design Opportunities in UCITS III

38 Introduction to Irish UCITS Funds Michael Barr, A&L Goodbody

39 UCITS - Introduction» European wide regulated retail fund» Regulated by home regulators with right to passport into other European jurisdictions» Well regarded worldwide (not just in Europe)» Has been developed and up-dated» Proactive dynamic regulation» Rules to ensure effective and uniform investor protection covering:» Supervision of the Fund» Safe-keeping of assets by a third party» Investment limits» Information right for investors» Meaningful diversification

40 Attractions of a UCITS» Retail Product» Also of interest to institutional investors» Insurance companies;» Pension funds» Ability to passport» International brand recognition

41 UCITS Eligible Assets» Transferable securities» Money market instruments» Collective investment schemes» Derivatives» Deposits» Warrants Each category subject to various classification rules in each case as regards eligibility.

42 Development of UCITS Eligible Assets» UCITS III Rules» Derivatives (ability to use them for investment purposes)» Fund of funds» Index funds» Money market funds» Latest Irish development ability to short sell provided it is covered by way of securities lending arrangement

43 Resulting Developments» Much increased use of derivatives» Structured products housed within a UCITS» 130/30 Funds» Using a UCITS as an effective institutional product offering

44 UCITS as a Global Product» Well respected as a high quality brand» Footprint in over 50 countries» Particularly strong in Asia and South America» 90% of cross border UCITS domiciled in Ireland and Luxembourg

45 UCITS the Next Stage» 2006 White Paper» Legislative proposal plan for end January 08 Implementation by end 2008» Address issue of management company passport» Framework for cross border fund mergers» Deal with pooling mechanisms (for example master feeder structures and virtual pooling)» Key investor disclosure document (replacement of simplified prospectus)

46 Sophisticated Investor Products Kevin O Connor, Arthur Cox

47 Qualifying Investor Funds» Minimum Subscription 250,000 per investor.» Individual Investor minimum net worth 1.25m.» Institutional Investor owns or invests 25m.» Qualifying Investor must certify they meet the minimum criteria.» Exceptions to minimum investment criteria permitted for management/investment management/investment advisory company or a director or senior investment employee of such company.

48 Qualifying Investor Funds» All investment and leverage restrictions disapplied.» Disclose in prospectus investment objectives and policies; borrowing policies; quantitative parameters on extent of leverage.» Prospectus must include prominent risk warning as to potential for above average risk.» Investment companies must still comply with risk spreading principle in accordance with Companies Act 1990.

49 Qualifying Investor Funds» From 14 February 2007 QIF fund documents no longer submitted to Financial Regulator for review.» Application Form submitted with final documents and if application is in order authorisation letter issues next day.» Promoter and service providers must still be approved.» Still need Irish administrator and custodian/trustee.» Possible to appoint a prime broker.

50 Qualifying Investor Funds» Very popular vehicle.» Speed to market critical feature.» Ideal for hedge funds or other sophisticated products.

51 Professional Investor Funds» Minimum subscription 125,000 per investor.» Exceptions to minimum investment criteria same as for QIFs.» Derogations from general investment restrictions granted by Financial Regulator on a case by case basis.» Typically general retail investment restrictions doubled, i.e. PIF may invest up to 20% of NAV in the securities of any one issuer.» Typically borrowings up to 100% of NAV allowed.» May appoint a prime broker.

52 Limited Liquidity Funds» Hybrid between closed-ended funds and open-ended funds.» Right to redeem can be deferred/ delayed at the discretion of the Trustees/Directors.» Limited liquidity funds are not required to list on Irish Stock Exchange as is case for closed-ended funds.» Useful structure for fund of funds where underlying investments are illiquid due to lock-ups.

53 Fund of Funds» Rule for retail funds is that the target funds must be authorised in Ireland or in a jurisdiction with equivalent investor protection.» PIF (which is a Fund of Funds) may invest up to 20% of its NAV in a target fund but 100% of its assets may be invested in unregulated funds.» QIF may invest up to 40% of its NAV in a target fund but 100% of its assets may be invested in unregulated funds.

54 Pooling Products Dan Morrisey, William Fry Feargal O Reilly, KPMG

55 What is Pooling? Entity Pooling Pooling which aggregates the assets of participating funds through a separate vehicle (e.g. the CCF) Virtual Pooling Pooling using information technology to aggregate amounts as if they were an underlying pool without actually constituting the pool as a separate vehicle.

56 What is Asset Pooling? Existing Investment Structure Asset Pooling Structure UK Pension Fund Irish Company Dutch BV Swiss Pension Fund UK Pension Fund Irish Company Dutch BV Swiss Pension Fund becomes Common Contractual Fund equals Economies of Scale Investments Investments Investments Investments Investments

57 What is Virtual Pooling? Existing Investment Structure Virtual Pooling Structure UK Pension Fund Irish Company Dutch BV Swiss Pension Fund UK Pension Fund Irish Company Dutch BV Swiss Pension Fund becomes Investments Investments Investments Investments Investment Pool

58 Key Benefits» Greater access to Investment Managers for what would have been smaller portfolios» Greater structuring/blending opportunities» Reduced number of portfolios Proportionate reduction in volumes of transactions» Larger Pools Larger transactions Lower costs» Larger Pools Scale Lower investment management fees and custody/ administration costs» Larger Pools Greater Access to Securities Lending

59 Common Contractual Fund» Established under the law of contract by Deed of Constitution (Custodian + Manager)» Has no separate legal personality of itself relationship between CCF and investors is a contractual one» Investors hold co-ownership rights in assets as tenants in common» Investor liability limited to amount contributed for units» Segregated liability between Sub-Funds

60 Common Contractual Fund Legal Features» Established under the law of contract by Deed of Constitution (Custodian + Manager)» Has no separate legal personality of itself relationship between CCF and investors is a contractual one» Investors hold co-ownership rights in assets as tenants in common» Investor liability limited to amount contributed for units» Segregated liability between Sub-Funds

61 Common Contractual Fund Regulatory Options» As a UCITS UCITS III investment and borrowing restrictions apply» As a Non-UCITS:» QIF: No investment restrictions imposed» PIF: Derogations available from standard non-ucits investment restrictions on a case by case basis» CCF available to institutions not individuals

62 Asset Pooling - Why Should You Be Considering It? Feargal O Reilly, KPMG Ireland

63 1. Initial challenges have been met» A number of asset pooling structures currently exist» Irish administrators / custodians have invested heavily in and many have developed their systems to facilitate asset pooling» Legal council have been through the authorisation process» Tax professionals have clarity on transparency» The Regulator has authorised pooling structures IN SHORT ASSET POOLING WORKS

64 Recent CCF examples» Multinational Pension Funds Nestle, IBM» Investment Managers Vanguard, Legal & General, Deutsche Bank

65 2. Withholding Tax Efficiencies Potential benefits of transparent fund» Can remove withholding tax drag» Direct impact on performance

66 Pooling Vehicles Withholding tax can be a real cost! Potential benefit Opaque Transparent 1. Cheaper service provider costs 2. Better investment performance 3. Lower regulatory costs 4. Better risk management 5. Tax efficient

67 Pooling Vehicles - Opaque Net Income Paid as Dividend U.S. Dividends U.K. Dividends Irish Corporate Fund Irish Dividends U.K. Pension Scheme Dutch Dividends Only has recourse To Ireland U.K. DTA Withholding tax suffered based on Irish corporate fund and its ability to obtain reduced WHT

68 Pooling Vehicles - Transparent Income maintains Character U.S. Dividends U.S. Dividends U.K. Dividends Dutch Dividends Irish CCF U.K. Dividends Dutch Dividends U.K. Pension Scheme Withholding tax suffered based on U.K. Pension Scheme and its ability to obtain reduced WHT Can use U.K. DTA Network to reduce or recover withholding Tax suffered

69 Tax Comfort» It may not make sense to have every jurisdiction within a Common Contractual Fund (CCF)» Approx. 90 percent of a typical global index is covered by ten countries» A large amount of ground work has been completed

70 Typical Global Equity Index The Netherlands, 2% Italy, 2% U.S., 52% Canada, 2% Australia, 2% Switzerland, 3% Germany, 3% France, 4% Japan, 9% U.K., 11% Other, 10%

71 Summary of Key Positions Country Likely to be Transparent Likely to be Non Transparent More Work Needed Australia Austria Belgium Canada France Germany Italy Japan Norway Spain Switzerland The Netherlands U.K. U.S. Source: KPMG International, 2007

72 3. VAT Efficiencies VAT Savings Possible» VAT normally charged on investment management, administration and other services provided for direct investment» Provision of investment management, administration and custody to an Investment Undertaking VAT EXEMPT in Ireland

73 3. VAT Efficiencies (contd.) VAT Savings Possible» Where services provided from EU jurisdiction to Irish CCF, normally outside scope of VAT in country where service provider established» Where service received in Ireland by an Investment Undertaking VAT EXEMPT

74 4. Improve Tax Credits» CCF is not just for limiting withholding tax» Individuals are the only category of investor prohibited in the CCF» Potential to provide benefits of pooling and also pass on withholding tax credits to taxable investors

75 5. Improve Tax Credits (contd.) German Corporate Singapore Corporate U.S. Corporate Investment Custodian Administrator Irish CCF Investment Manager Source: KPMG International, 2007

76 5. Improve Tax Credits (contd.) German Corporate Singapore Corporate U.S. Corporate Income Net of WHT Custodian Administrator Irish CCF Investment Manager Source: KPMG International, 2007

77 5. Improve Tax Credits (contd.) German Corporate Singapore Corporate U.S. Corporate WHT Credit Custodian Administrator Irish CCF Investment Manager Source: KPMG International, 2007

78 6. Asset Pooling Summary» Reduced operating costs due to economies of scale» No Irish tax on CCF» Tax benefits will depend on investors and investments» CCF transparent for Irish tax purposes and mirrors US regulations on transparency» Transparency should allow investors access to tax treaty reliefs» Investors can be pension funds or institutions» Ireland offers significant flexibility to manage tax exposures

79 International Financial Reporting Standards Recent Developments & Opportunities Jonathan O Connell, PricewaterhouseCoopers

80 Agenda: 1. Overview of changing IFRS 2. Implications 3. IFRS Convergence 4. How the Irish Industry has dealt with the changes

81 1. Overview of changing IFRS - Scope» IFRS continually evolving» Preparation of dealing NAV unaffected!» Applies twice per year half-year and full-year financial statements for investors

82 1. Overview of changing IFRS - Scope» Convergence of Irish GAAP with IFRS» Good progress on acceptance of IFRS in the US» Two standard setters, but the effect is the same» Timing of convergence

83 Financial Reporting Changes - Implications IFRS FRS a) Pricing of investments b) Treatment of transaction costs c) Recognition basis for interest income d) Classification of investors capital and of distributions to investors e) Determination of functional currency f) Risk Disclosures in financial statements 7 29

84 Financial Reporting Changes Implications a) Pricing of investments» Fair value» Bid prices for long positions» Ask prices for short positions» Valuation techniques where no active market» May impact NAV difference between trading NAV and financial statement NAV (remember- only for financial statements)

85 Financial Reporting Changes Implications b) Treatment of transaction costs» At present, include in cost, deduct from proceeds» New for investments held at fair value expensed immediately» No impact on NAV reclassification between captions in income statement if disclosed separately

86 Financial Reporting Changes Implications c) Recognition basis for interest income» Fixed income funds / money market funds» Premiums and discounts on purchase of securities» Most currently amortize on straight line basis» New requirement for effective yield basis» New requirement consistent with US GAAP» No impact on NAV reclassification between captions in income statement if interest is disclosed separately

87 Financial Reporting Changes Implications d) Classification of investors capital and of distributions to investors» Conventional treatment investors capital is equity and distributions to investors are distributions» IFRS treatment investors capital is debt and distributions to investors are interest expense» Both changes are reclassifications no effect on NAV» IFIA participated in IASB Discussion on this topic recently

88 Financial Reporting Changes Implications e) Determination of functional currency» Stricter rules for determining functional currency which is currency of measurement» E.G. raise SGD capital and invest in USD securities What is the appropriate functional currency?» No impact on NAV reclassification» Not likely to have a major impact

89 Financial Reporting Changes Implications f) Risk Disclosures in financial statements IFRS 7»Disclosures required by the Standard include:» information on the significance of financial instruments for an entity's financial position and performance.» information about exposures to risks arising from financial instruments e.g. Qualitative disclosures in relation to Credit Risk, Liquidity Risk and Market Risks etc.» and Quantitative disclosures regarding the extent of exposures based on information provided to key management» Disclosures based on risk management and internal key management information is an important part of the revised Standard

90 Risk Disclosures in financial statements IFRS 7 (contd.) Disclosures Include:» Credit risk» Liquidity risk» Market risk» Market price risk» Interest rate risk» Currency risk» All of the above disclosures may be a mixture of qualitative and quantitative disclosures and should specify how the specific risks are managed.»ifia issued a detailed Guidance Paper on FRS 29 in June 2007

91 Financial Reporting Changes Implications Summary» Most changes are to presentation and disclosure only» Only change which may affect calculation of NAV is pricing of investments» Only affects financial statements twice per year no impact on regular NAV calculation

92 3. IFRS Convergence with US GAAP SFAS No. 157: Fair Value Measurements»IASB issued Discussion Paper in Nov 2006.»Starting point for discussion is SFAS 157.»Exposure Draft expected 2008

93 4. Financial Reporting Changes Dealing with the changes» Perceived difficulties in implementation» Irish Industry has dealt extremely well with IFRS changes which have impacted in Ireland ahead of the rest of the EU» Significant IFRS expertise located now in Ireland

94 Financial Reporting Changes Dealing with the changes» IFIA taking a leading and proactive role in dealing with all issues and co-ordinating industry efforts» Detailed Guidance Paper issued in respect of the practical implications of adopting new Standards December 2005» Very positive feedback received from other jurisdictions» IFIA Technical Committee has worked closely with various Fund Industry Associations in writing to the IASB

95 How to Establish a Fund in Ireland Brian Dillon, Dillon Eustace

96 Various Fund Products in Ireland UCITS Equity Funds Bond Funds Money Market Funds Multi-Manager Funds Common Contractual Funds Index Funds Exchange Traded Funds Non-UCITS Alternative Investment Funds Property Funds Private Equity Funds Fund of Funds Fund of Hedge Funds Feeder Funds Venture Capital Funds Fund of Funds Real Estate Investment Trusts Securitised Assets

97 Entities applying for promoter/investment manager approval need to be regulated by the Monetary Authority of Singapore and to have received a license to provide capital market services under the Securities and Futures Act.

98 Non-UCITS (I) (II) (III) Retail Fund Professional Investor Fund Qualifying Investor Fund UCITS (i) Retail

99 Minimum administrative activities in Ireland to be carried out in Ireland: (A)» calculation of each fund s net asset value and dealing price, including the updating/confirmation of the prices of the underlying securities.» calculation of income and expense accruals.» all accounting records, i.e. income, expenses, assets and liabilities must be maintained in and updated in Ireland. Semi-annual and annual accounts must be prepared in Ireland.» all detailed reconciliation i.e. stock, custody, register must be performed in Ireland;» these are important elements of the books and records of a scheme.» dividends must be issued from Ireland. In addition, the reconciliation of all bank accounts relating to schemes including those relating to dividends must be carried out in Ireland.

100 Minimum administrative activities in Ireland to be carried out in Ireland: (B)» maintenance and servicing of the unitholders register including input, alteration and deletion of records. Unitholders certificates or their equivalent must be issued in Ireland.» correspondence to unitholders of the scheme, including completed application forms from investors, any other instructions from investors and all dividend/income distributions, must originate from and be retained within Ireland. Unit certificates or their equivalent must be issued in Ireland, as must the processing and issue of redemption requests.» all the back-up documents underlying the books and records of a scheme must be held in Ireland where they can be audited and, in addition, be subject to inspection by the Financial Regulator. The staff who maintain and prepare these books and records must be located in Ireland.

101 Fund Documentation» Prospectus» Trust Deed/Memorandum and Articles of Association» Administration Agreement» Custodian Agreement» Investment Management Agreement» Investment Advisory Agreement» Placing Agreement» Distribution Agreement; and Prime Brokerage

102 Reasons to list on the ISE (A)» A listing increases a funds distribution capacity by accessing a wider investor base. It allows promoters to market the fund (i) to institutional investors who may require a listing on a recognised stock exchange in order to invest and (ii) in countries where the relevant authorities require or provide exemptions for investment in listed securities.» The ISE permits the listing of a wide range of products and structures, and regularly reviews its requirements to encompass new industry developments. The ISE does not prescribe which investment objective or policies a fund may adopt, but instead imposes a framework based on risk spreading and disclosure based on the chosen objectives.

103 Reasons to list on the ISE (B)» an ISE listing provides a stamp of regulation for funds which may be domiciled in unregulated jurisdictions. The level of scrutiny imposed by the ISE on an initial and ongoing basis provides the market with a significant level of transparency and investor protection. The ISE listing is well recognised as a meaningful regime.» an ISE listing carries with it a significant element of prestige and visibility, particularly as Ireland is a member of both the OECD and the EU.» an ISE listing enables the security to be marked to market, ie. to allow investors to refer to a quoted market price for their securities.

104 Industry Briefing Seminar hosted by the Irish Funds Industry Association Singapore, Tuesday, 27 th November 2007