Dáil Éireann Debate, Wednesday - 30 April 2025
40. Deputy Pearse Doherty asked the Minister for Finance to provide an update on the development of a dormant funds scheme for the investment funds sector; and if he will make a statement on the matter. [21468/25]
View answerOn 22 October 2024 ‘Funds Sector 2030: A Framework for Open, Resilient & Developing Markets’ was published. It was a wide-ranging review of the funds and asset management sector.
The Review included a detailed examination of Ireland’s regulatory and supervisory regime for funds and included a recommendation that industry consider the feasibility and design of a scheme for existing and future dormant funds, and funds with uncontactable investors, which incorporates a role for industry in supporting investors to trace unclaimed monies and identify how it might handle investor claims. This can be found in Chapter 5 of the Funds Review 2030 Report, link below.
www.gov.ie/en/publication/da341-funds-sector-2030-a-framework-for-open-resilient-and-developing-markets/.
The Department of Rural and Community Development are the government department with responsibility for the Dormant Account Fund. The administration of the Fund is delivered through the National Treasury Management Agency on behalf of the State. The Dormant Accounts Act 2001 was established to reunite account holders with their funds. Unclaimed funds are transferred to the Dormant Accounts Fund, which is managed by the National Treasury Management Agency, providing the beneficial owner the right to reclaim their money at any time.
While the Dormant Accounts Act can provide a basis to develop an approach, investment funds have particular characteristics that may require a more targeted framework and primary legislation. The Department of Finance will continue to work closely with Industry and the Central Bank as work commences on progressing this recommendation.
The Central Bank processes applications seeking the revocation of authorisation of investment funds on an ongoing basis. A dormant fund is a fund that never launched or, if launched, has closed to subscriptions, is no longer active and is reporting a zero net asset value (NAV).
The Central Bank began a review of all dormant funds in Q4 2023. At that time:
• 2,000 authorised funds were classified as dormant funds
• Out of these 300 were identified as being authorised in the last 18 months and deemed out of scope of the exercise
• The remaining 1,700 funds were contacted with a request to apply for a revocation by 30 June 2024
• 359 applications for revocation were received by the deadline with a further 148 received subsequently during 2024.
The Central Bank is aware that many dormant funds have residual issues which prevent them from seeking revocation of authorisation. The most common issues are:
• uncontactable shareholders, remaining monies cannot be paid out;
• remaining shareholders have not submitted documents to comply with Anti-Money Laundering (AML) requirements and monies cannot be paid out; and
• issues with remaining assets e.g. illiquid assets.
