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Industry Updates

CBI Delegation Review 2026: Key Findings and Actions for Fund Management Companies

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What You Need to Know

The Central Bank has published a feedback report (the “Report”) following its review of delegation practices in Irish AIFMs and UCITS management companies (collectively “Fund Management Companies” or “FMCs”).

The Report found that FMCs operating a delegation model generally have good governance frameworks, controls and oversight processes. However, a number of FMCs inspected require enhancements in areas including board independence, over-reliance on group-level committees, resourcing, contingency planning and data access.

Supervisory Expectations and Findings

The Report sets out supervisory expectations across five themes and, for each theme, identifies findings in the form of (i) positive practices observed and (ii) areas requiring enhancement.

The table below summarises these findings:

Theme Supervisory Expectations Positive Practices Observed Areas Requiring Enhancement
Governance
  • FMCs must have sound, fit-for-purpose governance frameworks ensuring the fund is well run and risks are effectively managed.
  • The board must ensure functions are not delegated to an extent that undermines its ability to manage the fund or exercise sufficient authority over decision-making.
  • Robust governance and control frameworks are critical to safeguarding investor interests.
  • Established governance frameworks with diverse, experienced boards and clear reporting lines.
  • Local committees providing regular challenge of delegate performance and escalation of issues.
  • Effective use of group expertise and shared services, with clear accountability for oversight.
  • Insufficient board independence in some FMCs, driven by excessive group influence and directors serving beyond best-practice tenure limits.
  • Designated Persons not sufficiently senior or performing too many roles.
  • Over-reliance on group-level committees limiting local challenge.
  • Informal governance practices lacking documented policies, procedures and entity-specific risk statements.
Portfolio Management
  • Effective oversight and control frameworks must be in place for portfolio management activities.
  • Due diligence must confirm delegates meet all relevant EU and Irish legislative and local rule requirements.
  • FMCs must demonstrate active, documented decision-making responsibility for both delegated and retained portfolio management.
  • Robust oversight with regular delegate engagement, detailed performance analysis, comprehensive reporting and clear escalation pathways.
  • Appropriate contingency planning for termination of portfolio management delegates.
  • Commensurate levels of substance and resourcing where portfolio management is retained.
  • Insufficient autonomy in oversight and decision-making over delegated portfolio management.
  • Unstructured approach lacking documented procedures, performance standards and regular monitoring.
  • Limited attention to wind-down or transition procedures where a third-party portfolio manager cannot continue its mandate.
Risk Management
  • FMCs must implement effective risk management frameworks reflecting their operating model and strategy complexity, distinguishing retained from delegated activities.
  • Appropriate verification of delegate outputs and documented decision-making must be retained, supported by timely and accurate data.
  • Delegation of portfolio and risk management must be balanced so overall delegation is not disproportionate.
  • Risk management largely retained by FMCs, with generally well-established frameworks, independent oversight, risk limits and compliance monitoring.
  • Independent verification of delegated risk activities via shadow or independent checks, real-time data access and pre-trade compliance controls.
  • Governance and risk management measures for delegated risk activities need strengthening to meet the Cross Industry Guidance on Outsourcing (“CP138”) expectations.
  • Risk management resourcing needing strengthening in some FMCs.
  • Inability in some cases to demonstrate robust independent challenge or real-time data access, relying instead on delegate reporting.
Delegate Oversight
  • FMCs must retain clear decision-making authority and control over delegated activities via a robust, documented oversight framework.
  • A consistent due diligence methodology must apply across all delegates, including sub-delegates, with defined triggers and on-site engagement.
  • FMCs should not rely solely on due diligence questionnaires or self-reporting.
  • Risk-based approach to delegate due diligence using due diligence questionnaires and RAG scoring to prioritise resources.
  • Regular SLA/KPI reporting providing ongoing visibility of delegate performance.
  • Targeted annual on-site visits to delegates.
  • Reliance on group processes for delegate due diligence rather than direct assessment, with insufficient local FMC management representation at group-level oversight committees.
  • Insufficient involvement of Designated Persons and operational risk functions, with some FMCs using group or seconded personnel.
Data Capabilities
  • FMCs must have appropriate data delivery and management practices to support timely, accurate data for decision-making and delegate oversight.
  • FMCs should address gaps in data strategy, integration, governance and reporting effectiveness.
  • Growing recognition of data as a strategic asset, with data improvement programmes in larger firms.
  • Increasing reliance on automated reporting and business intelligence tools.
  • Formal data policies and procedures at larger FMCs, with dedicated data teams at higher-scale/complexity firms.
  • Fragmented data integration in some FMCs, with disparate systems for risk, investment, operations and compliance requiring manual reconciliation.
  • Some FMCs engaging delegates for pre/post-trade controls and investment/borrowing restriction monitoring, including instances of overriding internal risk limits.
  • Some FMCs lacking contingency arrangements for potential data loss or interruption.

Next Steps

The Central Bank has signalled a further review of FMC governance arrangements in 2026, including potential simplification of the Central Bank’s Fund Management Company Guidance (“CP86”) and the PCF framework, as well as consideration of proportionately applying the IAF/SEAR framework to the funds sector.

Key Actions

  • The Central Bank expects the Report to be considered by all FMCs, including board input.
  • The Central Bank requires all FMCs to conduct a gap analysis of the findings and expectations set out in the Report and to put in place a time-bound plan by 31 December 2026 to address any gaps identified.

How We Can Help

Our Financial Services Regulatory and Funds and Investment Management teams are available to assist with:

  • Board briefings on the Report’s findings and implications;
  • Gap analysis against the supervisory expectations set out in the Report;
  • Review and enhancement of delegation frameworks, outsourcing policies and due diligence methodologies;
  • Engagement with the Central Bank in the context of supervisory follow-up.

Further Information

For further information, please liaise with your usual Maples Group contact or any of the persons listed.

Key Contacts

Should you wish to discuss any aspect of the above, please reach out to your usual Maples Group contact or any of the persons listed.

Primary Contacts
Primary Contacts

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