Central Bank of Ireland Updates Portfolio Transparency Requirements for ETFs

The Central Bank of Ireland (CBI) has published the 42nd edition of the UCITs Q&A to amend the portfolio transparency requirements for ETFs.

This change provides for the ability to establish semi-transparent ETFs, therefore facilitating the establishment of active ETFs. ID 1012 has been updated to allow:

• The ability for daily disclosure of portfolio holdings has been retained, whilst the update now allows for periodic disclosure of portfolio holdings for all ETFs.

• For those funds disclosing portfolio holdings on a periodic basis, such holdings must be disclosed publicly at the end of each calendar quarter within 30 business-days of the end of the quarter.

• This is subject to the ETF having documented policies and procedures to address circumstances where the arbitrage mechanism of the ETF is impaired, disclosing the transparency policy in the fund documentation, and having a procedure for investors to request portfolio information.

• The fund documentation must also disclose the daily information provided to Authorised Participants (APs) and Market Makers (MMs). This information must be made available on a non-discriminatory basis.

The revised policy on portfolio transparency follows a recommendation in the Department of Finance Ireland Funds Sector 2030 Report for the CBI to keep its portfolio transparency requirements under consideration as well as recent engagement between Irish Funds, led by the ETF specialist group and the CBI including a number of submissions and workshops.

This is a significant development in enhancing Ireland’s market leading position as an ETF domicile and we would like to thank the CBI for their constructive engagement on this issue.