Irish Region

On 7 March 2022, the Central Bank of Ireland (the “CBI”) issued a letter to fund service providers (including fund management companies, fund administrators and depositaries) (“FSPs”) in relation to management of risk.

Central Bank Issues Letter to Fund Service Providers in Respect of Managing Risks Due to Russian Invasion of Ukraine

On 7 March 2022, the Central Bank of Ireland (the “CBI”) issued a letter to fund service providers (including fund management companies, fund administrators and depositaries) (“FSPs”) in relation to management of risk due to the Russian invasion of Ukraine (the “Letter”).

The CBI states that the contents of the Letter are to be taken into account as FSPs respond to unfolding events. The Letter focuses, in particular, on financial sanctions, valuation, liquidity, fund suspensions and engagement with the CBI.

Financial Sanctions

In a short period of time, the EU has expanded the range of sanctions targeting Russia in quick succession.

The CBI notes that FSPs are required to remain in compliance with sanctions at all times with respect to any impacted fund asset or fund investor. The CBI also notes the fast-changing environment and states it expects FSPs to take timely action, with heightened precautions, to ensure no breaches of sanctions occur.

The CBI reminds FSPs that if an FSP identifies a relevant transaction or a proposed transaction with a target of sanctions, the FSP must immediately freeze the accounts(s) and/or stop the transaction and report immediately to the CBI.


The CBI reminds fund management companies that it is their responsibility to take all necessary steps to ensure that the valuation of fund assets are fair and proper and in accordance with relevant fund policies and rules. The CBI also highlights that current market conditions mean that certain asset classes are subject to pronounced devaluation and/or their ability to trade has been wholly impaired. On this basis, fund management companies need to ensure that valuations applied to those assets appropriately reflect these changes.

Liquidity position

The CBI confirms its expectation that fund management companies, relevant pre-approval controlled function (“PCF”) holders and other relevant responsible persons should, on an ongoing basis, assess the liquidity position of each fund under management to ensure that the liquidity of the investment portfolio remains in line with the fund’s redemption policy and takes account of potential redemption demands. The CBI notes that particular attention needs to be given to using appropriate liquidity management tools, including suspension of the relevant fund.

Engagement with the CBI

Fund management companies are reminded of the need to be open and forthcoming to the CBI with issues materially affecting funds under management. The CBI reminds FSPs that where matters of concern arise or potential risks look likely to crystallise, FSPs should engage in a timely manner with the CBI.


Depositaries are reminded of their fiduciary obligations in respect of funds to which they are appointed. In particular, depositaries are reminded that their oversight of funds must ensure that the interests of investors are safeguarded.


Notwithstanding the fast pace of developments in this area, FSPs will need to ensure that risk and compliance frameworks are updated regularly and implemented fully.

The CBI acknowledges in the Letter that, given current market volatility, breaches of certain requirements relating to the portfolio composition of funds may occur. The CBI states that those breaches should be reported to the CBI in the normal course and may be subject to supervisory engagement depending on the nature of the breach.

Next Steps

The CBI states that the Letter must be brought to the attention of all members of the Board of the FSP, the fund, relevant PCF holders and other relevant responsible persons.

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