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| Financial Law Update | Back to article summary. |
| Irish and Chinese financial regulators agree memoranda of understanding | ||
| Elizabeth Grace |
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| On 23 October 2008 in Beijing, the Irish Financial Services Regulatory Authority (the “Financial Regulator”) signed two Memoranda of Understanding (the “MoUs”) with its Chinese counterparts, the China Securities Regulatory Commission (CSRC) and the China Banking Regulatory Commission (CBRC), enabling Chinese investors to invest in Irish domiciled, UCITS compliant and non-UCITS, investment products. | ||
| This very important development between Ireland and China means that a whole new opportunity for Chinese investment into Irish managed and administered funds is opened up and with it, the exposure of Irish domiciled investment funds to one of the world’s largest pools of private capital. The signatories to the MoUs were Mr Jim Farrell, Chairman of the Financial Regulator, Dr Shang Fulin, Chairman of the CSRC, and Mr LIU Mingkang, Chairman of the CBRC.
Mr Brian Cowen, the Irish Taoiseach (Prime Minister) addressed the large gathering present in Beijing to announce the two MoUs, with senior representatives of the Chinese authorities, banking institutions, asset management and securities companies in attendance. Mr Barry O’Leary, Chief Executive Officer of the Irish Industrial Development Authority and Mr Sean Pairceir, Chairman of the Irish Funds Industry Association (IFIA) also gave addresses, with the Irish Ambassador to China Mr Declan Kelleher, Minister Batt O’Keeffe (the Irish Minister for Education and Science) and Mr Michael Deasy of the Financial Regulator amongst those in attendance. Mr Michael Jackson, Vice-Chair of the IFIA and Partner in the Asset Management and Investment Funds Group, Matheson Ormsby Prentice, and Mr Gary Palmer, Chief Executive of the IFIA were also present at the historic signing of the MoUs in Beijing. The MoUs represent a further and significant enhancement of the already strong ties that exist between Ireland and China, and demonstrate the drive to further develop these links, particularly in the area of financial services. The MoUs will facilitate Chinese investors’ and companies’ access to investment opportunities in Irish funds and to the globally recognised capabilities of the Irish funds industry. In the wake of this recent development, Chinese investors will now be in a position to access funds domiciled and serviced in Ireland through the Chinese Qualified Domestic Institutional Investors (QDII) regime, as Ireland will become an approved destination under the QDII programme, which permits investment in funds on markets regulated by supervisory bodies that have signed an MoU. Indeed, the signing of the MoU follows on from last year’s development in China to substantially broaden the scope and operation of the QDII scheme which had been initially introduced in 2006. Correspondingly, it should be noted that Ireland can also access the Chinese Qualified Foreign Institutional Investors (QFII) regime and invest directly into China. The current trend towards the latter together with the signing of the MoUs, strengthens the opportunities in this regard for Irish fund managers. With its range of tax-exempt fund vehicles (including investment companies, unit trusts, investment limited partnerships and common contractual funds), extensive and expanding network of double tax treaties, responsive and flexible regulators who are approachable and receptive to tight time limits, the availability of a highly educated labour force with experienced fund professionals, Ireland has been traditionally regarded as the jurisdiction of choice for fund managers establishing regulated fund products for global distribution. These significant developments in Beijing for the Irish funds community and its international clients reflect the Irish Government’s commitment to ensuring that Ireland continues as the leading fund domicile for the international investment fund community, and it is understood that Ireland is the first jurisdiction to sign agreements with both the CSRC and the CBRC where no previous agreements were in place. |
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Elizabeth Grace is a consultant in the Asset Management and Investments Funds Group at Matheson Ormsby Prentice and can be contacted on +353 1 232 2000 or by email: elizabeth.grace@mop.ie. Further information on Matheson Ormsby Prentice is available at www.mop.ie |
