Following the publication of its discussion paper on Exchange Traded Funds (ETFs), the conference on sustainability and growth of ETFs last year, and feedback received from the ETF industry, the Central Bank of Ireland has indicated that it is continuing its considerations on alternative approaches to full portfolio transparency. 

In an interview with Ignites Europe, Martin Moloney, Special Advisor, Risk & Regulation, said the Central Bank is engaging with selected stakeholders as it seeks to formulate its position on whether to relax portfolio disclosure rules for ETFs. It is envisaged that such a move would facilitate a broader range of investment strategies going through an ETF wrapper and make it more attractive for active firms to launch ETFs in a manner that is consistent with the Central Bank's mandate to protect investors. The outcome is expected to be made known after the summer.

In tandem with this, the Central Bank also intends to formulate its position on the concept of ETF and non-ETF share classes coexisting in a single fund structure. While operationally possible, it is not presently permitted by the Central Bank and a number of other regulatory bodies due to questions over treating investors fairly. 

Mr Moloney indicated portfolio disclosure and non-ETF share classes are the sole points the Central Bank intends to follow up on with policy action.

This article was co-authored by Peter Stapleton ([email protected]) and Ciara O'Leary (ciara.o'[email protected]