Updated AIFMD Q&A – Important Central Bank Enhancements

On 7 March 2025, the Central Bank published the fiftieth edition of its AIFMD Questions & Answers (Q&A) document. The revised edition provides helpful and timely clarifications relevant to fund finance arrangements and loan origination funds. We understand that the Central Bank has issued these clarifications on an interim basis pending a proposed consultation this year on a wider review of the AIF Rulebook. The consultation will be in preparation for the implementation of AIFMD II, which is to be implemented into the laws of Ireland by 16 April 2026 at the latest, and will look to also address the recommendation in the Irish Government’s Fund Sector 2030 Final Report that to support further growth of private assets in Ireland, the Central Bank should review its AIF Rulebook and associated requirements that impact on the establishment of private asset funds in Ireland. 

Qualifying Investor AIFs (QIAIFs) can now act as guarantor to third parties: 

Q&A ID 1160 confirms and provides clarity that QIAIFs are permitted to provide guarantees in respect of investments and/or intermediate vehicles for such investments in which the QIAIF has a direct or indirect economic interest subject to a number of important safeguards and investor disclosures. Given that the Central Bank’s AIF Rulebook includes a prohibition on QIAIFs acting as guarantors for third parties, this is a welcome and important clarification for QIAIFs seeking to be party to group fund structure credit facilities. 

Loan originating QIAIF clarifications on application of existing rules: 

Q&A ID 1161 confirms that the definition of financial institution in the AIF Rulebook is aligned with that set out in the revised AIFMD loan origination rules which cross refers to EU Directive 2009/138/EC (Solvency II Directive) that is transposed into Irish law through the European Union (Insurance and Reinsurance) Regulations 2015 (Solvency II Regulations). This update means that the prohibition under the AIF Rulebook on loan originating QIAIFs lending to “financial institutions” should be interpreted as being to any of the following entities:

• a credit institution or a financial institution or an ancillary services undertaking within the meaning of Article 4(5) and (21) of Directive 2006/48/EC (CRD IV Directive) respectively;

• an insurance undertaking, reinsurance undertaking or an insurance holding company within the meaning of Regulation 215(1) of the Solvency II Regulations;

• an investment firm within the meaning of Article 4(1) of Directive 2014/65/EU (MiFID II Directive); or

• a mixed financial holding company within the meaning of Article 2(15) of Directive 2002/87/EC (Financial Conglomerates Directive).

Q&A ID 1162 clarifies that while the prohibition under the AIF Rulebook on lending to persons intending to invest in equities or other traded investments of commodities applies where the borrower intends to use the proceeds to facilitate a trading or speculative investment strategy, it does not prevent lending to a borrower with the intention of acquiring a controlling interest in a target company.

If you require assistance with any aspect of the revised Q&A, please contact David Naughton (Partner and Head of Investment Funds and Financial Services Regulation), Mina Dawood (Associate), or another member of our Investment Funds and Financial Services Regulation Team.