Asset Management and Investment Funds
In 2026, fund managers and funds must prioritise their operational readiness for AIFMD II and UCITS VI, embedding new governance, reporting, liquidity, and risk management requirements into their compliance frameworks by the transposition deadline of 16 April 2026.
The Supervision Package focuses on harmonising key rules across member states, improving cross-border trading and post-trading infrastructure, and moving toward more centralised supervision under ESMA for certain areas.
AIFMD II and UCITS VI implementation
AIFMD II is the revised Alternative Investment Fund Managers Directive, which updates the original 2011 AIFMD framework to strengthen investor protection and harmonise rules across the EU. Key changes effective from 16 April 2026 include new requirements for loan-originating funds, enhanced liquidity management tools, more detailed delegation oversight, expanded reporting and disclosure obligations, and new rules on marketing by non-EU managers. These updates aim to improve transparency, risk management, and market stability for alternative investment funds.
UCITS VI is the latest update to the UCITS Directive, which governs retail investment funds in the EU. It introduces harmonised liquidity management tools, enhanced reporting requirements like AIFMD II, and new rules on delegation. These changes, also effective from 16 April 2026, aim to align UCITS with AIFMD standards and ensure robust investor protection while maintaining market efficiency.
Implementation work on AIFMD II and UCITS VI continued through 2025 including consultations from the Central Bank of Ireland (the Central Bank) on the Central Bank UCITS Regulations and AIF Rulebook updates to align with the new requirements. Feedback on the consultations is expected in Q1 2026.
For further details on the Central Bank consultations, please see: Central Bank issues consultations on proposed updates to its AIF Rulebook and the Central Bank UCITS Regulations.
For information on the RTS and Guidelines on liquidity management tools, please see: European Commission adopts technical standards on liquidity management tools under AIFMD and the UCITS Directive and ESMA publishes amended guidelines on liquidity management tools.
For details on the draft RTS on open-ended loan-originating AIFs, please see: Regulatory technical standards on open-ended loan-originating AIFs published.
In 2026, fund managers and funds must prioritise their operational readiness for AIFMD II and UCITS VI, embedding new governance, reporting, liquidity, and risk management requirements into their compliance frameworks by the transposition deadline of 16 April 2026.
Funds Sector 2030 roadmap
The Funds Sector 2030 Review was launched by Ireland’s Department of Finance in April 2023, aiming to position Ireland’s funds industry for long-term growth under three themes: open markets, resilient markets, and developing markets. Following an extensive consultation process, the Department published its Final Report in October 2024, setting out 42 recommendations across nine strategic areas (the Report). These included fostering growth in ETFs, passive strategies, and private assets; enabling greater retail investor participation; enhancing legal structures such as ICAVs and ILPs; improving regulatory and supervisory frameworks; and leveraging technology and digitisation to maintain competitiveness. The Report also addressed sustainability and tax reforms, recommending simplification of fund tax regimes, removal of the eight-year deemed disposal rule, and reviews of IREF, REIT, and Section 110 structures.
In September 2025, the Central Bank issued Consultation Paper 162, which includes proposed reforms for the private asset sector in advance of the transposition of AIFMD II.
In October 2025, the Department issued its Implementation Plan, confirming that workstreams have commenced on priority actions such as tax simplification, measures to improve the attractiveness of ILPs, and supervisory enhancements. The recommendations relating to ETFs have also been delivered. The report noted progress on technology adoption and sustainability initiatives.
The Implementation Plan advises that a Government ‘Roadmap’ will be published in early 2026, setting out an approach to simplify and adapt the Irish tax framework to encourage retail investment in Ireland. Further engagement with EU initiatives, including the Savings and Investments Union (SIU), will align Ireland’s framework with broader market integration goals. Industry stakeholders are encouraged to monitor developments closely, as implementation will proceed in phases through 2026–2028, with a mid-term review scheduled for 2027.
Market Integration and Supervision Package
The Market Integration and Supervision Package is a core element of the EU’s SIU strategy, designed to deepen the Capital Markets Union by reducing fragmentation and creating a more integrated, resilient financial market. It focuses on harmonising key rules across member states, improving cross-border trading and post-trading infrastructure, and moving toward more centralised supervision under European Securities and Markets Authority (ESMA) for certain areas. The package also aims to simplify compliance, tailor requirements for smaller firms, and mobilise Europe’s vast private savings for productive investment, while supporting innovation and competitiveness. Sweeping legislative proposals were published on 4 December 2025, with phased implementation likely from 2027.
For more on the package, which will be reviewed by the European Parliament and Council during 2026, please see European Commission’s Market Integration Package – Key Implications for Funds.
Our Finance section also contains updates in relation to the Market Integration and Supervision Package launched in December 2025.
Benchmarks Regulation
Amendments to the EU Benchmarks Regulation, effective from 1 January 2026, will change compliance obligations for funds referencing or using benchmarks within the EU. Firms should prepare for stricter oversight of benchmark administrators and ensure contingency planning for benchmark cessation or transition scenarios.
The Amended Regulation aims to reduce the regulatory burden for users of non-significant benchmarks by limiting the scope of the Amended Regulation to “critical” or “significant” benchmarks and certain climate-related and commodity benchmarks. From 1 January 2026 onwards, fund management companies are required to regularly check the public register maintained by ESMA (or the European Single Access Point, when available) to verify the regulatory status of administrators for any benchmarks they plan to use.
For more on what needs to be done after 1 January 2026, please see upcoming changes to the Benchmarks Regulation.
Standards for business
Under the Central Bank (Individual Accountability Framework) Act 2023, the Central Bank was empowered to prescribe Business Standards for regulated entities. Draft ‘Standards for Business’ Regulations formed part of the Central Bank’s 2024 consultation on changes to the Consumer Protection Code (CPC). The final regulations were published in March 2025 (the Central Bank Reform Act 2010 (Section 17A) (Standards for Business) Regulations 2025 (the “Business Standards Regulations”)) as part of the Central Bank’s publications relating to the revised CPC 2025.
The Business Standards Regulations will, as is the case with CPC 2025, apply from 24 March 2026.
The Business Standards Regulations set out mandatory principles for regulated financial firms under the Individual Accountability Framework. These standards require firms to act honestly, fairly, and professionally, prioritising customers’ interests and market integrity. They cover governance, risk management, and resource adequacy, and mandate that firms operate with due skill, care, and diligence, avoid conflicts of interest, and deliver fair outcomes. Supporting standards emphasise transparency and complaint resolution. Exemptions apply for certain activities, including MiFID services.
For further details on the Business Standards Regulations, please see IAF/SEAR Update: Business Standards Regulations published (effective 24 March 2026).
The Business Standards Regulations set out mandatory principles for regulated financial firms under the Individual Accountability Framework.
The Central Bank, as regulator for Irish-domiciled ETFs, has emphasised the need for boards of ETFs to keep pace with these developments while maintaining a steadfast focus on investor protection and operational resilience.
ETF governance
Twenty-five years on from the first Irish authorised exchange-traded fund (ETF), the European ETF landscape continues to undergo rapid transformation, marked by accelerating innovation, increased retail participation, and evolving regulatory expectations. The Central Bank, as regulator for Irish-domiciled ETFs, has emphasised the need for boards of ETFs to keep pace with these developments while maintaining a steadfast focus on investor protection and operational resilience. The Central Bank is committed to a deep understanding of this fund structure and to ensuring that its approach to ETF authorisation and regulation is effective and proportionate and appropriate to the needs of investors.
A key milestone in this regulatory journey was the Central Bank’s “Dear CEO” letter of November 2024, which highlighted deficiencies in board oversight of ETF liquidity and operational arrangements, particularly regarding the role of Authorised Participants and the robustness of governance frameworks. The letter set out clear expectations for ETF managers to strengthen board engagement, due diligence, and ongoing monitoring of liquidity and operational risks.
These themes were reinforced in Gavin Curran’s remarks at an ETF event in Dublin in October 2025, which further outlined the Central Bank’s supervisory priorities for fund boards in the context of ongoing innovation and market change.
We have reviewed these themes and expectations and can suggest actions for ETF boards to take in 2026 to maintain rigorous compliance with evolving distribution and investor-centric governance standards.
Gender balance regulations
Our Corporate section contains a summary of the requirements for EU-listed entities, including funds, falling within the scope of the gender balance regulations.
AML Developments
Our Finance section contains updates in relation to Anti-Money Laundering and Countering the Financing of Terrorism developments.
Please contact a member of our Asset Management and Investment Funds Group or your usual Arthur Cox contact for more information.
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