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ICAV Bill published as IFSC Minister Harris says 'the early enactment of this Bill is a high priority for me'. Back
The Bill to bring in the ICAV was published by the Department of Finance today.
The ICAV allows for a new corporate investment fund structure that will streamline the way in which funds are established. A feature of the ICAV is that it will be able to elect its classification under the US check-the-box taxation rules.

The legislation introducing the Irish Collective Asset-management Vehicle (“ICAV”) was published by the Department of Finance today, 29 July 2014, in the form of the Irish Collective Asset-management Vehicle Bill 2014 (the “Bill”).

The legislation has been eagerly awaited all year.

The IFSC Minister, Minister for State, Simon Harris, announced the publication of the Bill, the "Irish Collective Asset-management Vehicle Bill 2014" (ICAV bill). Minister for State Harris said "The early enactment of this Bill is a high priority for me. This is a key commitment in the Action Plan for Jobs and one, I believe, that will enhance Ireland’s attractiveness as a domicile for funds and better meet the needs of an expanding industry.”

"The ICAV Bill will create a new form of corporate vehicle for funds (collective investment schemes). The purpose of the proposed ICAV structure is to minimise the administrative complexity and cost of establishing and maintaining collective investment schemes in Ireland. The creation of this new vehicle type is a commitment in the IFSC Strategy and the Action Plan for Jobs. “The funds’ industry is a key contributor to employment in Ireland. The ICAV Bill is a very important part of the Government’s strategy for the continued development of the international financial services and job creation in Ireland”, he said.

The Bill is now due to pass through the next stages of the Irish legislative process and it is anticipated that it will be enacted during the third quarter of 2014. On that basis, it is expected that ICAVs will become available, as an investment fund specific corporate vehicle, during the last quarter of this year. The Central Bank of Ireland has committed that it will be in a position to accept ICAV applications within two weeks of the legislation being enacted.

Matheson, whose Asset Management and Investment Funds Group have been to the fore in recommending and assisting in the development and implementation of Ireland’s new fund vehicle welcomed the publication in a statement.

"The ICAV will have a number of benefits over the existing Irish corporate structure. These will include the ability to dispense with AGMs in specific circumstances, the ability to produce more streamlined audited accounts and the ability to more easily amend constitutive documents. Another important feature of the ICAV will be its ability to elect its classification under the US check-the-box taxation rules. The Irish plc is not currently permitted to check-the-box for US tax purposes, meaning that it is treated as a separate entity and subject to two levels of tax: one at the corporate level where the income is earned and the second at the shareholder level when distributions are made. An “eligible entity” ie, an entity that can elect its classification under the check-the-box rules, can elect for alternative, more favourable tax treatment. The ICAV will be an eligible entity for these purposes.

"The ICAV is a new corporate vehicle designed for Irish investment funds, providing a tailor-made corporate fund vehicle for both UCITS and alternative investment funds (“AIFs”). Conceived specifically with the needs of investment funds in mind, the ICAV, as a bespoke corporate investment fund vehicle, will have the advantage that it will not be automatically impacted by amendments to certain pieces of European and domestic company legislation that are targeted at trading companies rather than investment funds", the firm said.

The Taoiseach recently said that the Government is ‘dedicated to making Ireland's regulated fund structures the most accessible, innovative and sophisticated in the EU’.

The Taoiseach had indicated at the IFIA annual conference on 18th July that the publication of the General Scheme of the Irish Collective Asset-management Vehicle (ICAV) Bill was due in the coming weeks. Speaking immediately after the Taoiseach, the Central Bank of Ireland's director of markets Gareth Murphy said that the Bank stood ready to implement ICAV within two weeks of the legislation.
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