Directors of UCITS Management Companies and UCITS Investment Companies

Resignation

  1. Persons considering taking appointments as directors of UCITS management companies and existing directors should be aware of their duty to act bona fide at all times in the best interests of the company.
  2. The Central Bank expects that where a management company manages investment funds which are in distress that directors do not resign if this is not in the best interests of the management company or, more importantly, if this is not in the interests of the unitholders of those investment funds.
  3. In difficult or stressed situations, the Central Bank will seek to work with the directors of the management company to resolve the issues facing the management company and the investment funds under management. For that reason, the Central Bank will want to see that directors continue in their positions, to work for the company and with the Central Bank, to seek the best resolution. The Central Bank would remind directors, importantly, that resignation based on a mere entitlement to resign would not in the opinion of the Central Bank satisfy the fulfilment by the director of his or her duty to the management company and the unitholders of the investment funds under management, where resignation goes against the ability of the management company and/or the Central Bank to resolve prevailing issues. Where a director is unable to continue in his or her role for substantial personal or, other, unavoidable reasons which make their continuation of the role impractical, the Central Bank will, of course, not seek the continued service of that director.
  4. The Central Bank will expect, in addition to the separate requirement on the board to complete procedures around a resignation, that the resigning director will set out his/her reasons for resigning, and the intention to resign, to the Central Bank in order to permit the director, the board and the Central Bank to prepare a solution.
  5. The fulfilment, or otherwise, by a person of his or her duties in a previous role, and the overall performance by a person in a previous role, are matters relevant to the fitness and probity of that person, and hence will be taken into account by the Central Bank when assessments are being made in the future of a person's fitness for a future role or of that person's probity.
  6. It is also important to note that the Central Bank shares information concerning such matters with other regulators in accordance with its legal mandate and powers and its arrangements for cooperation it has with other regulators.
  7. In all cases where a director wishes to resign and prior to completing the relevant Central Bank form, the board or its Chair should form a view as to the impact of the resignation on the management company having regard to the current and prospective financial state of the management company and the investment funds under management. In the event that the board or, in the absence of a board meeting, the Chair forms the view that the situation is one which could create such concern on the part of the Central Bank, it should state this on the relevant Central Bank form. The board or its Chair may consult with the Central Bank in order to help it form a view on that matter.

Issued: 5 October 2015
Latest revision: 5 October 2015