2

irishfunds.ie2

Hong Kong Seminar

15 January 2018

3 irishfunds.ie

Hong Kong, 15 January 2018

Industry Update & Key Developments

Pat Lardner

Chief Executive

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Who / What are we

• industry association for all aspects of regulated cross border funds

in Ireland

o representative function

o promotional function

• 125 member firms, located both in and outside Ireland

• key link to the authorities & policy makers in Ireland and beyond

• the industry’s representative in Europe and globally

• a platform for collaboration, information sharing and driving

outcomes & improvement

5 irishfunds.ie

The Irish Funds Industry

• supports managers from all over the

world

• full range of services for Irish

domiciled funds as well as providing

expert services for funds domiciled

outside of Ireland

• solutions are provided to managers

across the full spectrum of

investment strategies

Fund Managers

903

Irish Administered

Funds

Irish Domiciled Funds

€2.4 trillion

UCITS

€1.8 trillion

AIFs

€0.6 trillion

Non Domiciled Funds

€2 trillion

Source: Central Bank of Ireland, October 2017, figures rounded to nearest €0.1bn

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What does the industry in Ireland

provide?

• EU Single Market Access: product & service

passports

• Investor Access: European Market and beyond

• Service Excellence / Developed Ecosystem

• Low Costs

• Low Tax Environment

• Regulatory Environment

• Commitment from Government

• Infrastructure : language/legal/telecommunications

Best Country in

Western Europe to

invest in

1st

FLEXIBILITY AND

ADAPTABILITY

OF PEOPLE

1st

IN EUROPE FOR

COMPLETION OF

3RD LEVEL

EDUCATION

irishfunds.ie7

Why Ireland?

Distribution and investor support

Global Distribution of Irish UCITS

• broad mix of institutional

and retail clients served

• 30 languages supported

• 23 currencies supported

Source: Lipper, PwC & Irish Funds, 2015

irishfunds.ie8

Total Assets Under Administration

636

838965

1,394 1,398 1,443

1,883 1,886

2,199

2,722

3,375

3,806

4,0954,273

434584

728 807646 748

964 1,0551,227 1,344

1,6641,899

2,0852,298

202

254 237

587752

695

919831

972

1,378

1,711

1,907

2,0111,976

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Sep-17

EU

R

Billi

on

Irish Domiciled and Non-Domiciled Fund Assets - € billion

Total Non Domiciled Total Domiciled

Source: Central Bank of Ireland

irishfunds.ie9

Irish Domiciled Asset Breakdown

• UCITS represent 75% of Irish

Domiciled Assets

• 86 UCITS Man Cos

• 161 AIFMs Registered or

Authorised

• 630 AIFMs operating in

Ireland on cross border

basis

• 390 ICAVs established

(since 18 March 2015)

Source: Central Bank of Ireland

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Growth of largest European fund

domiciles

Source: EFAMA Statistics

2011 2012 2013 2014 2015 2016 2017 Q3

Europe 0% 13% 23% 42% 58% 78% 92%

Luxembourg 0% 14% 25% 48% 67% 77% 93%

Ireland 0% 16% 27% 57% 80% 98% 118%

France 0% 9% 10% 14% 21% 29% 39%

Germany 0% 13% 24% 40% 53% 66% 78%

UK 0% 17% 35% 59% 79% 77% 92%

0%

20%

40%

60%

80%

100%

120%

% C

um

ula

tive

Gro

wth

Europe Luxembourg Ireland France Germany UK

irishfunds.ie11

Irish domiciled funds – net sales

Net sales for

YTD Sept 2017

have surpassed

the total for 2016

– which itself

was a record

year

Source: Central Bank of Ireland

0

100

200

300

400

500

600

700

800

2012 2013 2014 2015 2016 YTD Sept2017

€b

illi

on

Net Sales: Ireland v Total European Union

Ireland Net Sales EU Net Sales

irishfunds.ie12

Brexit interdependent themes

Distribution

Management

Models

(‘Delegation’)

Growth

OVER 2,000 IRISH

FUNDS SOLD TO UK

INVESTORS1

€613 bn2 IN IRISH FUND

ASSETS MANAGED BY

170+ UK FIRMS IN

IRELAND2

Continuity in UK investor

access to EU/Irish funds

Continuity in

UK firm

management

of Irish funds

Increase Ireland’s growth

trajectory as an

international asset

management centre

SOURCE: 1-Lipper IM Dec 2015

2-Monterrey Ireland Fund Report 2016

Current context Target outcome

irishfunds.ie13

Structuring options: Management

models

MiFID Firm

Super ManCo w/ Add-on Authorisations (‘v2’)

Super ManCo w/ Delegates (‘v1)

SMIC• Simple option for single umbrella fund

DEFINITIONS:

• ‘MiFID Firm’: Investment firms authorised under Markets in Financial Instruments Directive (2007, to be replaced by MiFID 2 / MiFIR in January 2018)

• ‘Super ManCo’: authorised to provide services to UCITS and AIFs w/ the option of add-on authorisations for segregated mandates

• ‘SMIC’: Self-Managed Investment Company

Global

Asset

Managers

Regional

Asset

Managers

Management

Models (‘Delegation’)

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Other developments….

• Updating of Ireland’s Investment Limited Partnership Legislation

• Legislative amendments approved by Irish Government.

• Entering legislative process

• Will provide additional scope for private equity and real asset funds.

• European Commission ESAs Proposals

• While there are aspects to the European Supervisory Authorities (ESAs)

proposals we welcome, there are a number of areas which are of significant

concern. We have shared our views in Ireland and in Europe.

• Strong advocates of delegation to globally based experts.

• Loan Origination

• We continue to engage with the CBI and Public sector with a view to

enhancing the current Loan Origination offering.

• Tax Transparency

• OECD has awarded Ireland the highest international rating on tax

transparency and exchange of information.

• EU Cross Border Distribution

• Consultation on removing barriers to Cross Border Distribution submitted

2016 and follow-up questionnaire completed 2017.

• We have subsequently met with the European Commission.

• Expected Q1 2018

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Other developments….

• Pan European Personal Pension Plan (PEPP)

• Industry white paper published on PEPP.

• We have subsequently met with the European Commission.

• Financial Action Task Force (FATF) Mutual Evaluation Report (MER) of

Ireland

• FATF’s assessment of Irelands anti-money laundering and counter

terrorist financing concluded that “Ireland has a sound and substantially

effective regime to tackle money laundering and terrorist financing….”

In addition the Report highlights “National coordination mechanisms…

and the Private Sector Consultative Forum (PSCF) were fruitful in

broadening the understanding of its ML and TF risks across all relevant

agencies and with the private sector.”

• CBI engagement re Exchange Traded Funds (ETF)

• Responded to Central Bank of Ireland (CBI) ETF discussion paper and

engaged with the CBI throughout the process.

• Consultation paper on CIS Liquidity Risk Management

• Response provided to the International Organization of Securities

Commission (IOSCO) Consultation paper.

16 irishfunds.ie

Conclusion

• EU Member & Strategically Positioned

+

• International Hub for Globally Distributed

Investment Funds

+

• Unrivalled Experience and Expertise in the

Widest Range of Fund Structures

Disclaimer: The material contained in this document is for marketing, general information and reference

purposes only and is not intended to provide legal, tax, accounting, investment, financial or other

professional advice on any matter, and is not to be used as such. Further, this document is not intended

to be, and should not be taken as, a definitive statement of either industry views or operational practice.

The contents of this document may not be comprehensive or up-to-date, and neither Irish Funds, nor any

of its member firms, shall be responsible for updating any information contained within this document.

17 irishfunds.ie

18 irishfunds.ie

Connie Boland

Economic Research Analysis Ltd

Keynote Presentation:

Economic Market Update

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Moderator:Julie Kerr, EY

Panellists:David Quah, Value Partners

Shay Lydon, Matheson

Simon Lee, CSOP Asset Management

Paul Heffernan, HSBC

Nik Bienkowski, HANetf

Panel One: ETF Update

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Moderator:James Lloyd, EY

Panellists:Benedicte Nolens, Securities and Futures Commission

Byron Wong, Yunfeng Financial Group

Fireside Chat:

The Market Opportunity and

Regulatory Environment for Online

Advisory Platforms in Asia

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Moderator:Michelle Lloyd, Maples and Calder

Panellists:Mark Dillon, Deacons

Paul Moloney, Eversheds

Winnie Pun, BlackRock

Marie Gervacio, EY

Panel Two:

Perspectives on the Irish and

Global Regulatory Agenda

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Michael D’Arcy

Minister of State at the Department of Finance

Keynote Address

23 irishfunds.ie

Conor O’Mara

Jefferies

Closing Comments

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Kindly sponsored by EY

Drinks Reception

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irishfunds.ie25

Hong Kong Seminar

15 January 2018