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21 2004

Central Bank and Financial Services Authority of Ireland Act 2004

SCHEDULE 3

Miscellaneous Amendments to other Acts Administered by the Bank

Section 33 .

PART 1

Amendment of Insurance Act 1936

Item

Provision affected

Amendment

1.

Section 3

(a) Insert “(1)” before “In this Act”;

 

 

(b) Insert the following subsection at the end of the section:

 

 

“(2) A financial contract within the meaning of the Netting of Financial Contracts Act 1995 is not, and is taken never to have been, a contract of insurance for the purposes of—

 

 

(a) the Insurance Acts 1909-2002, or

 

 

(b) regulations in force under those Acts, or

 

 

(c) regulations relating to insurance that are in force under the European Communities Act 1972 .

 

 

However, this subsection does not have effect if the financial contract provides for any benefit that may accrue to a party to the contract to be conditional on the occurrence of a loss or detriment to which the party is required to be exposed under the contract.”.

2.

Section 51 (as amended by item 17 of Part 2 of Schedule 1 to the Central Bank and Financial Services Authority of Ireland Act 2003 )

In subsection (2), substitute “may not pay or undertake” for “may pay, or undertake”.

 

PART 2

Amendment of Companies Act 1963

Item

Provision affected

Amendment

1.

Section 103

In subsection (1)(b), insert the following subparagraph after subparagraph (iii):

 

 

“(iiia) if the charge is a floating one, granted by a company to the Central Bank and Financial Services Authority of Ireland for the purposes either of providing or securing collateral, particulars of any provision of the charge that has the effect of prohibiting or restricting the company from issuing further securities that rank equally with that charge or modifying the ranking of that charge in relation to securities previously issued by the company;”.

 

PART 3

Amendment of Insurance Act 1964

Item

Provision affected

Amendment

1.

Section 3 (as amended by section 31 of the Insurance Act 1989 )

In subsection (1B), substitute “in respect of a risk” for “in the State in respect of a risk situated in the State”.

2.

Section 6 (as amended by section 10 of the Insurance (No. 2) Act 1983 and by section 31 of the Insurance Act 1989 )

In subsection (2)(d), substitute the following definition for the definition of “aggregate income”:

“ ‘aggregate income’, in relation to an insurer in respect of any period, means the gross amount of premiums paid or payable to the insurer in respect of policies issued by the insurer during that period;”.

 

PART 4

Amendment of Central Bank Act 1971

Item

Provision affected

Amendment

1.

Section 2 (as amended by section 70(c) of the Central Bank Act 1997 and item 1 of Part 6 of Schedule 1 to the Central Bank and Financial Services Authority of Ireland Act 2003 )

(a) In subsection (1), insert the following definitions after the definition of “the Act of 1942”:

“ ‘Amsterdam Treaty’ means the treaty signed in Amsterdam on 2 October 1997 amending the Treaty on European Union;

‘associated company’, in relation to the holder of a licence, means a company in respect of which—

(a) not less than 20 per cent of the nominal value of the company's equity share capital is held by the company, or

(b) not less than 20 per cent of shares carrying voting rights (other than voting rights that arise only in particular circumstances) are so held;”;

 

(b) In subsection (1), substitute the following definition for the definition of “banking business”:

 

 

“ ‘banking business’, in relation to a person, means any business that consists of or includes—

 

 

(a) receiving money on the person's own account from members of the public either on deposit or as repayable funds (whether or not the issue of securities or any other form of financial obligation is involved), and

 

 

(b) any other business of a kind normally carried on by a bank (which may include the granting of credits on own account), and

 

 

(c) any other business of a kind prescribed under subsection (2) for the purpose of this paragraph,

 

 

but does not include such a business in so far as the business consists of or includes—

 

 

(i) receiving money on deposit by a trader either from employees of the trader in relation to the trader's business, or from customers of the trader in the normal course of the trader's business, or

 

 

(ii) receiving money in respect of leasing or selling goods under a hire-purchase agreement, a leasing agreement or credit-sale agreement, or

 

 

(iii) receiving money as security or collateral or as a bond for the repayment of a debt or the performance of a contract related to goods or services, or

 

 

(iv) receiving money accepted by way of advance or part payment under a contract for the sale, hire or other provision of goods or services, and repayable only in the event that the goods or services are not in fact sold, hired or otherwise provided, or

 

 

(v) receiving money solely as a premium in respect of the issue or renewal of a life assurance policy issued by a holder of an authorisation under the European Communities (Life Assurance) Regulations 1984 (S.I. No. 57 of 1984), or

 

 

(vi) receiving money accepted as a contribution within the meaning of the Pensions Acts, or

 

 

(vii) receiving money where it can be shown that—

 

 

(I) no part of the business activities of the person receiving the money or of any other person is financed wholly or substantially out of those funds, and

 

 

(II) those funds are, in the normal course of business, accepted only on a casual or incidental basis, or

 

 

(viii) receiving money under financial contracts (within the meaning of the Netting of Financial Contracts Act 1995 ) (which may include the acceptance of collateral).”;

 

 

(c) In subsection (1), insert the following definitions after the definition of “the Court”:

 

 

“ ‘ESCB Statute’ means the Statute of the European System of Central Banks and of the European Central Bank as set out in Protocol (No. 3) (annexed by the Treaty on European Union done at Maastricht on 7 February 1992) to the Rome Treaty;

 

 

‘functions’, in relation to the Bank, means the functions and duties imposed on the Bank by or under an enactment;”;

 

 

(d) In subsection (1), insert the following definition after the definition of “holder”:

 

 

“ ‘holding company’ has the meaning given by section 2 of the Central Bank Act 1942 ;”;

 

 

(e) In subsection (1), insert the following definition after the definition of “investment trust company”:

 

 

“ ‘legal practitioner’ means a barrister or solicitor;”;

 

 

(f) In subsection (1), insert the following definition after the definition of “insurance undertaking”:

 

 

“ ‘Maastricht Treaty’ means the Treaty on European Union done at Maastricht on 7 February 1992;”;

 

 

(g) In subsection (1), insert the following definitions after the definition of “the Minister”:

 

 

“ ‘Pensions Acts’ means the Pensions Act 1990 as amended from time to time, and includes all Acts that are to be construed together with that Act as one Act;

 

 

‘record’ means any record of information, however compiled, recorded or stored, and includes—

 

 

(a) any book, a register and any other document containing information, and

 

 

(b) any disc, tape or other article from which information is capable of being produced in any form capable of being reproduced visually or aurally;

 

 

‘related body’, in relation to the holder of a licence, means—

 

 

(a) a subsidiary company of that holder, or

 

 

(b) if that holder is itself a subsidiary—

 

 

(i) its holding company, or

 

 

(ii) any other subsidiary of its holding company,

 

 

or

 

 

(c) an associated company of that holder, or

 

 

(d) a partnership in which that holder has an interest, and whose business is or, at any relevant time, was in the Bank's opinion materially relevant to an inspection being carried out, or proposed to be carried out, under section 17A;

 

 

‘Rome Treaty’ means the Treaty establishing the European Community done at Rome on 25 March 1957, as amended by the Maastricht Treaty, the Amsterdam Treaty and any other later Treaty on European Union;”;

 

 

(h) In subsection (1), insert the following definition after the definition of “securities”:

 

 

“ ‘subsidiary company’ has the meaning given by section 2 of the Central Bank Act 1942 ;”;

 

 

(i) Substitute the following subsection for subsection (2):

 

 

“(2) On being satisfied that it would be consistent with the proper and orderly regulation of banking to do so, the Minister may, after consulting the Bank, make an order—

 

 

(a) prescribing a category of business for the purpose of paragraph (c) of the definition of ‘banking business’ in subsection (1), or

 

 

(b) amending that definition by—

 

 

(i) adding a specified category of business to the exclusions specified in that definition, or

 

 

(ii) removing a specified category of business from those exclusions, or

 

 

(iii) substituting for a category of business specified in those exclusions another such category.”.

2.

Section 7 (as amended by section 30 of the Central Bank Act 1989)

(a) Substitute the following subsection for subsection (4):

“(4) Subsection (1) does not apply in relation to—

(a) the central bank of another member state of the European Communities that is a member of the European Central Bank, or

(b) the Post Office Savings Bank, or

 

 

(c) a trustee savings bank certified under the Trustee Savings Banks Acts 1863 to 1979, or

 

 

(d) a building society, an industrial and provident society, a friendly society or a credit union, or

 

 

(e) a manager, trustee or custodian of a unit trust or a collective investment undertaking or an entity that provides services to such an undertaking, or

 

 

(f) another member state of the European Communities, a regional or local authority of such a state, or a public international organisation of which one or more member states of the European Communities are members.

 

 

(5) The Minister may, if satisfied that it would be in the interest of the proper and orderly regulation of banking or of any other financial market to do so, make an order amending subsection (4)—

 

 

(a) by adding to the subsection any specified body or any specified class of persons, or

 

 

(b) by omitting from the subsection any specified body or any specified class of persons,

 

 

but only after consultation with the Bank and with such other Minister of Government or other persons as the Minister considers appropriate to so consult.”.

 

 

(b) Insert the following subsection after subsection (5) (as inserted by paragraph (a)):

 

 

“(6) Subsection (1) does not apply to a person who acts on behalf of—

 

 

(a) the Bank, or

 

 

(b) the holder of a licence, or

 

 

(c) a body or person referred to in subsection (4), or

 

 

(d) a credit institution or financial institution that is permitted by the European Communities (Licensing and Supervision of Credit Institutions) Regulations 1992 (S.I. No. 395 of 1992) to carry on business within the State, but only so long as the institution complies with all conditions imposed on such an institution by those Regulations and by or under an Act.”.

3.

Section 8 (as amended by section 31 of the Central Bank Act 1989 and section 70(d) of the Central Bank Act 1997 )

Substitute the following subsections for subsection (2):

“(2) The Bank may exempt a specified person, or the members of a specified class of persons, from being required to hold a licence where the requirement would arise only from the creation of securities or other obligations to which the definition of ‘banking business’ relates, but only if the Bank is satisfied that the granting of the exemption would be consistent with the proper and orderly regulation of banking.

 

 

(2A) An exemption granted under this section is subject to such conditions as the Bank thinks fit to impose.

 

 

(2B) The Bank shall revoke an exemption granted under this section if satisfied—

 

 

(a) that the circumstances relevant to the exemption have changed and are now such that the exemption would no longer be granted, or

 

 

(b) that a condition of the exemption is not being, or has not been, substantially complied with.

 

 

(2C) The Bank shall publish in Iris Oifigiúil a notice of every exemption and revocation under this section.”.

4.

Section 15

Substitute the following subsection for subsection (2):

 

 

“(2) If, on delivery of documents under section 352 of the Companies Act 1963 , or under regulation 4 or 7 of the European Communities (Branch Disclosures) Regulations 1993 (S.I. No. 395 of 1993), it appears to the registrar of companies that the company to which those documents relate—

 

 

(a) would be holding itself out as carrying on business as a banker in the State, or

 

 

(b) would have as one of its objects in its memorandum of association the carrying on of banking business in the State,

 

 

the registrar shall give the Bank written notice of the matter.”.

5.

Section 17 (as substituted by item 2 of Part 6 of Schedule 1 to the Central Bank and Financial Services Authority of Ireland Act 2003 )

Delete subsection (5).

6.

Section 17A (as substituted by item 2 of Part 6 of Schedule 1 to the Central Bank and Financial Services Authority of Ireland Act 2003 )

In subsection (8), delete the definitions of “associated company”, “company”, “functions”, “holding company”, “legal practitioner”, “prescribed record”, “related body” and “subsidiary company”.

7.

Section 18 (as substituted by section 37 of the Central Bank Act 1989 and amended by section 8 of the Central Bank Act 1998 )

Substitute the following section for section 18:

 

“Holders of licences and others to provide Bank with required information and returns.

18.—(1) This section applies to the following persons:

(a) a person who is the holder of a licence;

(b) any person who carries on—

(i) a business of an associated company or related body of the holder of a licence, or

(ii) a business in respect of which the person is, because of section 7(4)(b), exempt from being required to hold a licence, or

(iii) a business as an investment trust company, or

(iv) a business as a moneybroker, or

(v) a business as a financial intermediary, or

(vi) a business of issuing, holding or otherwise participating in any market in financial instruments, including those to which Chapter VIII of Part II of the Central Bank Act 1989 applies.

 

 

 

(2) A person to whom this section applies shall provide the Bank, at such times, or within such periods, as the Bank specifies from time to time, with such information and returns concerning the relevant business carried on by the person as the Bank specifies from time to time.

 

 

 

(3) A person to whom this section applies shall, at such time or within such period as the Bank specifies, provide the Bank with such information or return (not being information or a return specified under subsection (2)) as it requests in writing concerning the relevant business carried on by the person.

 

 

 

(4) A reporting agent designated by the European Central Bank shall provide the Bank or the European Central Bank, at such times or within such periods as the Bank or the European Central Bank specifies from time to time, with such information and returns concerning the activities of the agent as the Bank or the European Central Bank specifies from time to time.

 

 

 

(5) A reporting agent designated by the European Central Bank shall, at such time or within such period as the Bank or European Central Bank specifies, provide the Bank or European Central Bank with such information or return (not being information or a return specified under subsection (4)) as the Bank or European Central Bank requests in writing concerning the activities of the agent.

 

 

 

(6) The Bank may specify information or a return for the purposes of this section only if it considers it necessary to have that information or return for the proper performance of the functions imposed, or the proper exercise of the powers conferred, on it by law.

 

 

 

(7) The European Central Bank may specify information or a return for the purposes of subsection (4) or (5) only if that Bank considers it necessary to have that information or return for the proper performance by that Bank of tasks and duties imposed, or the proper exercise of the powers conferred, on that Bank by or under the Rome Treaty or the ESCB Statute.

 

 

 

(8) A person shall not provide for the purpose of this section information or a return that the person knows to be false or misleading in a material respect.

 

 

 

(9) This section applies to the business of an associated company or a related body only in so far as the information and returns sought by the Bank are, in its opinion, materially relevant to the proper appraisal of the business of the holder of the licence concerned.

 

 

 

(10) In this section—

 

 

 

‘information and returns’ and ‘information or return’ include audited accounts and audited group accounts, and any other documents that are equivalent or correspond to audited accounts or audited group accounts;

 

 

 

‘moneybroker’ has the same meaning as it has in section 108 of the Central Bank Act 1989, for the purposes of Chapter IX of that Act;

 

 

 

‘relevant business’, in relation to a person to whom this section applies, means—

 

 

 

(a) in the case of a person who is the holder of a licence, the banking business to which the licence relates, or

 

 

 

(b) in the case of a person referred to in subsection (1)(b), the business carried on by the person.”.

8.

Section 27 (as substituted by section 70(e) of Central Bank Act 1997)

(a) Substitute the following subsection for subsection (2):

“(2) Subsection (1) of this section does not apply to advertising for or otherwise soliciting deposits or other repayable funds from the public—

(a) by the holder of a licence, the Bank, or a person to whom, because of subsection (4) of section 7 of this Act, subsection (1) of that section does not apply, or

 

 

(b) by a person to whom, because of section 8(2) of this Act, section 7(1) of this Act does not apply, or

 

 

(c) by a person authorised to carry on business in the State by the European Communities (Licensing and Supervision of Credit Institutions) Regulations 1992, or

 

 

(d) by a person on behalf of a person referred to in paragraph (a), (b) or (c) of this subsection.”;

 

 

(b) In subsection (5), insert “or other repayable funds” after “deposits”.

 

PART 5

Amendment of Insurance (Miscellaneous Provisions) Act 1985

Item

Provision affected

Amendment

1.

Section 1

Substitute the following definition for the definition of “the Minister”:

 

 

“ ‘the Minister’ means the Minister for Finance.”.

2.

Sections 2 and 3

Repeal the sections.

3.

Section 4

After “attorney” insert “or proxy”, wherever occurring.

4.

Section 6

Delete “, after consultation with the Minister for Finance,”.

5.

Section 7

Delete “given after consultation with the Minister for Finance”.

6.

Section 8

Substitute the following subsection for subsection (1):

 

 

“(1) The memorandum and articles of association of the Company must be in a form, consistent with this Act, that is approved by the Minister.”.

7.

Section 9

In subsection (2), delete “, after consultation with the Minister for Finance,”.

8.

Section 10

(a) In subsection (1), delete “after consultation with the Minister for Finance”;

 

 

(b) in subsection (2), delete “after consultation with the Minister for Finance”;

 

 

(c) in subsection (3), delete “after consultation with the Minister for Finance”;

 

 

(d) in subsection (4), delete “, after consultation with the Minister for Finance,”.

9.

Section 14

(a) In subsection (1), delete “, with the consent of the Minister for Finance,”;

 

 

(b) in subsection (3), insert “, or the Minister for Enterprise, Trade and Employment,” after “Minister”;

 

 

(c) in subsection (4), delete “with the consent of the Minister for Finance”;

 

 

(d) in subsection (6), insert “, or the Minister for Enterprise, Trade and Employment,” after “Minister” wherever occurring;

 

 

(e) in subsection (7), delete “for Finance”;

 

 

(f) in subsection (8), insert “, or the Minister for Enterprise, Trade and Employment,” after “Minister”.

10.

Section 15

(a) In subsection (1), delete “to him by the Minister for Finance”;

 

 

(b) in subsection (2), delete “for Finance”.

11.

Section 17

Delete “, to such extent as may be sanctioned by the Minister for Finance,”.

 

PART 6

Amendment of Insurance Act 1989

Item

Provision affected

Amendment

1.

Section 2

Insert the following definition after the definition of “the Court”:

 

 

“ ‘EEA country’ means a country that is a member of the European Economic Area;”.

2.

Section 11

Substitute the following subsection for subsection (2):

 

 

“(2) The Bank has a right to disclose any such return or document to the supervisory authority of another EEA country so long as the disclosure is not prohibited by law.”.

3.

Section 18

Substitute the following subsection for subsection (3):

 

 

“(3) If the head office of an undertaking is located in another EEA country, the Bank shall notify the supervisory authority of that country before issuing a direction under this section in respect of the undertaking.”.

4.

Section 20

Substitute the following section for section 20:

 

 

“Qualifications, experience and fitness of directors, managers and authorised agents of insurers.

20.—(1) For the purposes of this section, a person holds a management position with an insurer if the person—

(a) is a director of the insurer, or

(b) holds a management position with the insurer that is specified by the Bank, or

(c) is the authorised agent of the insurer in the State.

 

 

 

(2) The Bank may, by notice in writing, require an insurer to submit such information as the Bank requires concerning—

 

 

 

(a) the qualifications and experience of persons who hold management positions with the insurer, and

 

 

 

(b) the fitness of those persons to hold those positions.

 

 

 

(3) On being satisfied on reasonable grounds that a person holding a management position with an insurer—

 

 

 

(a) does not have the appropriate qualifications or adequate experience, or

 

 

 

(b) is not otherwise fit to hold the position,

 

 

 

the Bank may direct that, while the person continues to hold the position, the insurer must take such of the measures specified in subsection (4) as the Bank notifies in writing to the insurer.

 

 

 

(4) The following measures are specified for the purposes of subsection (3):

 

 

 

(a) to refrain from taking on new business, or new business of a specified type or class;

 

 

 

(b) to limit its premium income to a specified amount;

 

 

 

(c) to refrain from making investments of a specified class or description;

 

 

 

(d) to realise, within a specified period, investments of a specified class or description;

 

 

 

(e) to maintain in the State assets of a value equal to the whole, or a specified proportion of, the amount of its liabilities in respect of business carried on in the State;

 

 

 

(f) to take such further measures as may be specified in the direction.

 

 

 

(5) The Bank may from time to time vary or revoke a direction given under this section.

 

 

 

(6) If an insurer has its head office in another EEA country, the Bank shall notify the supervisory authority of that country before issuing a direction under this section in respect of the insurer.

 

 

 

(7) On being satisfied on reasonable grounds that an insurer has not complied, or is not complying, with a direction under this section, the Bank may suspend or revoke the insurer's authorisation in respect of any class or part of a class of business in accordance with the procedures prescribed by section 58.

 

 

 

(8) An insurer—

 

 

 

(a) shall notify the Bank in writing of every proposal to appoint a person to a management position with the insurer, and

 

 

 

(b) shall not make the appointment if the Bank, within 30 days of being notified of the proposal, objects to the proposal on the ground that the person proposed to be appointed—

 

 

 

(i) does not have the appropriate qualifications or adequate experience, or

 

 

 

(ii) is not otherwise fit to hold the position.

 

 

 

(9) A direction or objection of the Bank under this section is an appealable decision for the purposes of Part VIIA of the Central Bank Act 1942 .

 

 

Qualifications, experience and fitness of persons concerned in management of applicants for authorisations.

20A.—(1) For the purposes of this section, ‘management position’, in relation to an applicant for an authorisation, means—

(a) a director, or

(b) a management position specified by the Bank, or

(c) an authorised agent.

 

 

 

(2) An applicant for an authorisation to carry on a specified class or description of insurance business shall provide the Bank with such information as the Bank requires concerning—

 

 

 

(a) the qualifications and experience of persons who hold, or whom the applicant proposes to appoint, to management positions with the applicant, and

 

 

 

(b) the fitness of those persons to hold those positions.

 

 

 

(3) The Bank shall not grant an authorisation if it appears to the Bank that a person referred to in subsection (2)—

 

 

 

(a) does not have the appropriate qualifications or adequate experience to hold a management position with the applicant, or

 

 

 

(b) is not otherwise fit to hold such a position.

 

 

Provisions supplementary to sections 20 and 20A.

20B.—(1) If the head office of an insurer or an applicant for an authorisation is not located within the State, sections 20 and 20A apply only to persons who perform functions of the undertaking in the State.

(2) The Bank is not liable in respect of any claim for damages arising directly or indirectly from the application of any of the provisions of section 20 or 20A.”.

5.

Section 22

Substitute the following subsection for subsection (1E):

 

 

“(1E) The Bank may direct a company to stop carrying on the business referred to in subsection (1), by notice in writing either indefinitely or for such period as it may specify in the direction, in all or any of the following circumstances:

 

 

(a) if the company contravenes subsection (1)(b) or (1C),

 

 

(b) if information that is, to the knowledge of the company, false or misleading is included in a notice of the company given under subsection (1)(b) or (1C),

 

 

(c) if the Bank considers that, having regard to the risks insured or proposed to be insured by the company, the company is under capitalised, or

 

 

(d) if the Bank considers that one or more of the directors or the senior managers of the company are not fit and proper, or are not suitably qualified, to direct and manage the company's business, or

 

 

(e) if the Bank considers that the company has not a sufficient number of fit and proper or suitably qualified employees in the State to carry on effectively the company's business, or

 

 

(f) if the Bank has information showing that the company has engaged in unlawful activities, either within or outside the State.

 

 

(1EA) A direction given by the Bank to a company under subsection (1E) does not absolve a company from performing its obligations in respect of the business of reinsurance carried on by it before that direction was given.”.

6.

Section 31

Delete subsections (3), (5) and (7).

7.

Section 58

(a) In subsection (3), substitute “all other EEA countries” for “any other Member State of the European Communities”;

 

 

(b) delete subsection (4).

 

PART 7

Amendment of Central Bank Act 1989

Item

Provision affected

Amendment

1.

Section 50 (as substituted by item 5 of Part 9 of Schedule 1 to the Central Bank and Financial Services Authority of Ireland Act 2003 )

In subsection (4), insert “or 268” after “section 233”.

2.

Section 77

Substitute the following subsection for subsection (2):

 

 

“(2) The Minister may give consent under subsection (1) only after consulting the Minister for Enterprise, Trade and Employment, and after being satisfied that the Bank's proposed decision to approve or refuse its approval—

 

 

(a) would be in the interests of proper and orderly regulation of banking, and

 

 

(b) would be in the public interest, bearing in mind the effect of the transaction on the continued availability of financial services, both generally and on a social and geographical basis and on the capacity of the State to manage the State's economy generally and in order to comply with its obligations under the law of the European Communities.”.

3.

Section 101

Substitute the following subsection for subsection (1):

 

 

“(1) In approving rules of an existing exchange or for a proposed exchange, the Bank may impose conditions or requirements on the exchange.

 

 

(1A) The Bank may, at any time after approving the rules of any such exchange—

 

 

(a) impose further conditions or requirements on the exchange, or

 

 

(b) amend or revoke any condition or requirement imposed under this subsection or subsection (1).

 

 

(1B) The powers conferred on the Bank by subsections (1) and (1A) are exercisable only for the purposes of ensuring—

 

 

(a) the prudent regulation of the exchange concerned, and

 

 

(b) the protection of consumers of financial services, and

 

 

(c) the effective and efficient regulation of the State's financial system.

 

 

(1C) The Bank may extend a condition or requirement imposed on an exchange under subsection (1) or (1A) so that the condition or requirement also applies to either or both of the following:

 

 

(a) all or any of the members of the exchange;

 

 

(b) any company established in connection with a member's membership of the exchange.

 

 

(1D) The Bank may not impose a condition or requirement under subsection (1) or (1A), or amend or extend such a condition or requirement, unless it—

 

 

(a) has notified the exchange, and any member or company affected by the condition or requirement, or by the amendment or extension, of its intention to impose the condition or requirement, or make the amendment or extension, and

 

 

(b) has given the exchange, and any such member or company, the opportunity to make representations to the Bank to show why the condition or requirement should not be imposed, or the amendment or extension should not be made.

 

 

(1E) If securities created by the Minister could be the subject of dealings on an exchange, the Bank shall not impose a condition or requirement under subsection (1) or (1A) in relation to any such dealings without having notified the Minister of its intention to impose the condition or requirement.”.

4.

Section 117

Substitute the following subsections for subsection (4):

 

 

“(4) A person supervised by the Bank who—

 

 

(a) fails to provide information in accordance with subsection (3)(a), or

 

 

(b) fails to comply with a direction under subsection (3)(b), or

 

 

(c) publishes, or issues a document that contains a reference to, a code of practice so as to suggest that the code has been issued or approved by the Bank when this is not the case,

 

 

commits an offence.

 

 

(4A) A person who is convicted of an offence under subsection (4) is liable—

 

 

(a) on summary conviction, to a fine not exceeding €2,000, or

 

 

(b) on conviction on indictment, to a fine not exceeding €40,000.

 

 

(4B) A person who—

 

 

(a) having been convicted of an offence under subsection (4)(a), continues to fail to provide information, or

 

 

(b) having been convicted of an offence under subsection (4)(b), continues to fail to comply with the direction,

 

 

commits a further offence on each day, or part of a day, on which the failure continues after that conviction.

 

 

(4C) A person who is convicted of an offence under subsection (4B) is for each such offence liable—

 

 

(a) on summary conviction, to a fine not exceeding €500, or

 

 

(b) on conviction on indictment, to a fine not exceeding €5,000.”.

 

PART 8

Amendment of Trustee Savings Banks Act 1989

Item

Provision affected

Amendment

1.

Section 24A

In subsection (3)(e), substitute “trustee savings bank or related body” for “licence holder”.

 

PART 9

Amendment of Companies Act 1990

Item

Provision inserted

Amendment

1.

Section 253

In subsection (2A)(a), substitute “Central Bank” for “Bank”.

 

PART 10

Amendment of Stock Exchange Act 1995

Item

Provision inserted

Amendment

1.

Section 30 (as amended by item 4 of Part 19 of Schedule 1 to the Central Bank and Financial Services Authority of Ireland Act 2003 )

(a) In subsection (5), insert “, a member of or officer of the Regulatory Authority” after “the Bank”;

(b) In subsection (6), insert “, a member or officer of the Regulatory Authority” after “the Bank”;

(c) In the definition of “committee of inspection” in subsection (6B), insert “or 268” after “section 233”.

2.

Section 53

Substitute the following subsections for subsection (1):

 

 

“(1) This section applies to the following persons:

 

 

(a) the supervisory authority;

 

 

(b) employees and officers of that authority;

 

 

(c) the members of any Board of that authority;

 

 

(d) the Regulatory Authority;

 

 

(e) members and officers of the Regulatory Authority and employees of the Bank.

 

 

(1A) A person to whom this section applies is not liable in damages for anything done or omitted to be done in performing functions under this Act unless it is proved that the act was done, or omitted to be done in bad faith.”.

3.

Section 55 (as amended by item 7 of Part 19 of Schedule 1 to the Central Bank and Financial Services Authority of Ireland Act 2003 )

In subsection (1), insert “and may, whenever appropriate, revoke the appointments of those persons” after “this Act”.

4.

Section 65

Repeal the section.

5.

Section 69

(a) In subsection (3), insert the following paragraph after paragraph (a):

 

 

“(aa) a person authorised by the Chief Executive of the Regulatory Authority;”;

 

 

(b) Delete subsection (3)(d).

6.

Second Schedule

Repeal the Schedule.

 

PART 11

Amendment of Investment Intermediaries Act 1995

Item

Provision affected

Amendment

1.

Section 2

(a) In subsection (1), insert the following definition after the definition of “director”:

 

 

“ ‘financial institution’ means—

 

 

(a) an insurance undertaking as defined in Article 1(a) of Directive No. 92/49/EEC, or

 

 

(b) an assurance undertaking as defined in Article 1(a) of Directive No. 92/96/EEC, or

 

 

(c) a UCITS as defined in Article 1(2) of Directive No. 85/611/EEC (as amended), or

 

 

(d) an investment firm as defined in Article 1(2) of Directive No. 93/22/EEC, or

 

 

(e) any other undertaking the activities of which are similar to those of an undertaking referred to in subparagraphs (a) to (d) or the principal activity of which is to acquire holdings of financial assets,”;

 

 

(b) In subsection (1), insert the following definition after the definition of “proposed investment business firm”:

 

 

“ ‘publication’ includes publication on an Internet website;”;

 

 

(c) In subsection (1), insert the following definition after the definition of “related undertakings”:

 

 

“ ‘relevant collective investment scheme instrument’ means—

 

 

(a) units or shares in undertakings for collective investments in transferable securities within the meaning of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2003 (S.I. No. 211 of 2003), or

 

 

(b) units in a unit trust, or

 

 

(c) shares in an investment company, or

 

 

(d) capital contributions to an investment limited partnership;”;

 

 

(d) In subsection (1), substitute the following definition for the definition of “product producer”:

 

 

“ ‘product producer’ means a firm, institution, collective undertaking, investment company or insurance undertaking of a kind referred to in section 26(1A);”.

2.

Section 6

Substitute the following subsection for subsection (1):

 

 

“(1) The expenses incurred by the Minister in administering this Act are payable out of money provided by the Oireachtas.”.

3.

Section 22

(a) In subsection (5), insert “, or a member or officer of the Regulatory Authority” after “the Bank”;

 

 

(b) In subsection (6), insert “, or a member or officer of the Regulatory Authority” after “the Bank”;

 

 

(c) In the definition of “committee of inspection” in subsection (6B), insert “or 268” after “section 233”;

 

 

(d) In subsection (6B), substitute the following definition for the definition of “responsible authority”:

 

 

“ ‘responsible authority’ means—

 

 

(a) the Governor of the Bank, or

 

 

(b) the Chief Executive of the Regulatory Authority, or

 

 

(c) any person to whom the Governor of the Bank or the Chief Executive of that Authority has delegated responsibility for appointing persons under this section.”.

4.

Section 26

Substitute the following subsections for subsection (1):

 

 

“(1) An investment product intermediary is a restricted activity investment product intermediary for the purposes of this Act if—

 

 

(a) the only investment business service that the intermediary provides, or in relation to which the intermediary provides investment advice, is one or more of—

 

 

(i) receiving and transmitting orders for relevant collective investment scheme instruments, shares in a company that is listed on a stock exchange, bonds that are listed on a stock exchange, prize bonds, tracker bonds, insurance policies, or personal retirement savings accounts within the meaning of the Pensions Act 1990 , or

 

 

(ii) acting as a deposit agent or as a deposit broker,

 

 

and

 

 

(b) in the course of performing an activity of the kind specified in paragraph (a), the intermediary transmits orders only to an entity, or an entity of a class, specified in subsection (1A), and

 

 

(c) the intermediary does not hold clients' funds or securities in such a way as, in dealings with clients, to become indebted to those clients.

 

 

(1A) The following entities and classes of entities are specified for the purposes of subsection (1)(b):

 

 

(a) investment firms authorised in accordance with Directive 93/22/EEC of 10 May 1993 by a competent authority of another Member State of the European Communities;

 

 

(b) authorised investment business firms (other than restricted activity investment product intermediaries or certified persons);

 

 

(c) member firms within the meaning of the Stock Exchange Act 1995 ;

 

 

(d) credit institutions authorised in accordance with Directives 77/780/EEC of 12 December 1977 and 89/646/EEC of 15 December 1989;

 

 

(e) in relation to investment business firms and credit institutions authorised to carry on business in a state other than a Member State, such branches of those firms or institutions as the supervisory authority approves from time to time;

 

 

(f) collective investment undertakings authorised under the law of a Member State of the European Communities to market units in collective investments to the public, and to the managers of such undertakings;

 

 

(g) investment companies with fixed capital as defined in Article 15(4) of Council Directive 77/91/EEC of 13 December 1976 the securities of which are listed or dealt in on a regulated market in a Member State;

 

 

(h) insurance undertakings;

 

 

(i) the Prize Bond Company Limited, or any successor to it as operator of the Prize Bond scheme.

 

 

(1B) An intermediary does not cease to be a restricted activity investment product intermediary for the purposes of this Act only because the intermediary—

 

 

(a) accepts non-negotiable cheques or similar instruments made out to a body referred to in subsection (1A) in connection with receiving and transmitting orders, or

 

 

(b) when acting as a deposit agent, accepts cash from a client for the client's account with a credit institution, or

 

 

(c) when providing services other than investment business services or investment advice, holds cash on behalf of clients, or

 

 

(d) accepts cash from a client in circumstances to which section 25G applies when acting as an insurance intermediary, or

 

 

(e) accepts cash from a client in circumstances to which section 25E applies when acting as a tied insurance agent.

 

 

(1C) Nothing in this section affects the obligation of a restricted activity investment product intermediary to comply with regulations in force under section 43D of the Insurance Act 1989 in so far as they relate to the matters referred to in section 43E(1)(a)(iii) and (iv) of that Act.”.

5.

Section 28

Substitute the following section for section 28:

 

 

“Obligations on product producers.

28.—(1) A product producer may not—

(a) appoint an investment product intermediary to act on its behalf—

(i) in receiving or transmitting orders for collective investment scheme instruments, or

 

 

 

(ii) in receiving or transmitting orders for company shares or bonds, that are listed on a stock exchange, or

 

 

 

(iii) in receiving or transmitting orders for prize bonds, or

 

 

 

(iv) in receiving or transmitting orders for tracker bonds, or

 

 

 

(v) in receiving or transmitting orders for insurance policies, or

 

 

 

(vi) in receiving or transmitting orders for personal retirement savings accounts, or

 

 

 

(vii) when acting as a deposit agent or as a deposit broker,

 

 

 

or

 

 

 

(b) pay commission to an investment product intermediary, or

 

 

 

(c) accept any orders transmitted, or any insurance placed, by an investment product intermediary on behalf of a client,

unless to the best of the producer's knowledge, after having made reasonable enquiries, the investment product intermediary is appropriately qualified.

 

 

 

(2) An investment product intermediary is appropriately qualified for the purpose of subsection (1) only if the intermediary—

 

 

 

(a) is a certified person, or

 

 

 

(b) is of good character and is in compliance with this Act and, where the product producer is an insurance undertaking, is also in compliance with the Insurance Acts.

 

 

 

(3) For the purposes of subsection (2), a product producer is entitled to assume that an investment product intermediary is in compliance with this Act and with the Insurance Acts if the intermediary is authorised—

 

 

 

(a) by the supervisory authority under section 10 or 13 to operate as an investment business firm, or

 

 

 

(b) by a competent authority in another Member State to undertake activities similar to those undertaken by such a firm.

 

 

 

(4) Subsection (5) applies to and in respect of—

 

 

 

(a) product producers who appoint investment product intermediaries to act on their behalf for any purpose specified in subsection (1), and

 

 

 

(b) investment product intermediaries who are so appointed.

 

 

 

(5) On being requested to do so by notice in writing given by the supervisory authority, a product producer who has appointed an investment product intermediary shall, for so long as is specified in the notice, monitor the activities of the intermediary in order to be satisfied that the intermediary complies with the requirements imposed by or under this Act on investment product intermediaries. If requested to do so by that notice or by a further notice in writing given by the supervisory authority, the product producer shall also provide that authority with evidence in writing that that producer has not contravened subsection (7). The supervisory authority may provide a product producer with such information as appears to the supervisory authority necessary to enable the producer to comply with this subsection.

 

 

 

(6) A person who, for the purpose of obtaining an appointment of the kind referred to in section 27, gives information that the person knows or ought reasonably to know is false or misleading commits an offence.

 

 

 

(7) A product producer shall not—

 

 

 

(a) accept an order transmitted by an investment business firm on behalf of a client of the firm, or

 

 

 

(b) accept money belonging to such a client, or

 

 

 

(c) pay commission to the firm,

 

 

 

unless the firm is an investment business firm—

 

 

 

(d) that, to the best of the product producer's knowledge and belief, complies with this Act and, if the firm is an insurance intermediary, also complies with the Insurance Acts, and

 

 

 

(e) that is authorised under section 10 or is deemed to be authorised under section 26 or 63, and

 

 

 

(f) to which the product producer has given an appointment in writing in accordance with Part IV that has not been terminated.

 

 

 

(8) A product producer who contravenes subsection (7) commits an offence.

 

 

 

(9) In this section—

 

 

 

‘commission’ includes fee and any other form of remuneration.

 

 

 

(10) This section applies to and in respect of investment product intermediaries appointed before or after the commencement of item 5 of Part 11 of Schedule 3 to the Central Bank and Financial Services Authority of Ireland Act 2004.”.

6.

Section 52

Substitute the following subsection for subsection (6):

 

 

“(6) If—

 

 

(a) an authorised investment business firm maintains an account with a credit institution or a financial institution, and

 

 

(b) the account contains money, or relates to investment instruments or documents of title, entrusted to or received by the firm for or on account of a client,

 

 

the firm commits an offence if it fails to designate the account as a ‘section 52 account’ in all of its financial records. This subsection does not apply to an authorised investment business firm that is a certified person.”.

7.

Section 53

Substitute the following subsections for subsection (1):

 

 

“(1) This section applies to the following persons:

 

 

(a) the supervisory authority;

 

 

(b) employees and officers of that authority;

 

 

(c) the members of any Board of that authority;

 

 

(d) the Regulatory Authority;

 

 

(e) members and officers of the Regulatory Authority and employees of the Bank.

 

 

(1A) A person to whom this section applies is not liable in damages for anything done or omitted to be done in performing functions under this Act unless it is proved that the act was done, or omitted to be done in bad faith.”.

8.

Section 58

Substitute the following subsections for subsection (1):

 

 

“(1) If the Bank grants approval under section 56, or consents to a proposed amendment to a memorandum or article of association or rules, it may, in the interests of the proper and orderly regulation and supervision of approved professional bodies or certified persons, also do all or any of the following:

 

 

(a) make its approval or consent subject to such conditions or requirements as it considers fit;

 

 

(b) impose conditions or requirements that relate to the affairs or operation of an associated undertaking or related undertaking;

 

 

(c) amend or revoke conditions or requirements imposed under this subsection;

 

 

(d) at any time after approving a professional body impose conditions or requirements on the body, including—

 

 

(i) a requirement that the body amend any memorandum of association or articles of association of the body, and

 

 

(ii) if the body has rules relating to the provision of investment business services or investment advice by certified persons, or the regulation and supervision of certified persons — a requirement that the body amend or revoke those rules.

 

 

(1A) The Minister may, from time to time in the interests of the proper and orderly regulation and supervision of approved professional bodies or certified persons, issue guidelines to the Bank with respect to the imposition by the Bank of conditions and requirements under subsection (1). However, the Minister is required to obtain the consent of the Minister for Justice, Equality and Law Reform before issuing any such guidelines that relate to an approved body of lawyers.

 

 

(1B) As soon as practicable after issuing guidelines under subsection (1A), the Minister shall arrange for notice of their issue to be published in Irish Oifigiúil. Failure to comply with this subsection does not of itself affect the validity of the guidelines concerned.

 

 

(1C) When imposing a condition or requirement under subsection (1), or amending such a condition or requirement, the Bank shall comply with any guidelines issued to it under subsection (1A).”.

9.

Section 64

(a) In subsection (1), insert “and may, whenever appropriate, revoke the appointments of those persons” after “this Act”;

 

 

(b) substitute the following subsection for subsection (4):

 

 

“(4) In this section, ‘responsible authority’ means—

 

 

(a) the Governor of the Bank, or

 

 

(b) the Chief Executive of the Regulatory Authority, or

 

 

(c) any person to whom the Governor of the Bank or the Chief Executive of that Authority has delegated responsibility for appointing persons under this section.”.

10.

Section 71

Substitute the following subsection for subsection (4):

 

 

“(4) The Minister may lay before each House of the Oireachtas a report forwarded under subsection (2) if the Minister thinks it proper to do so having regard to the public interest and the rights of any person referred to in the report.”.

11.

Section 74

Repeal the section.

12.

Section 78

In subsection (3), substitute the following paragraph for paragraph (c):

 

 

“(c) a person authorised by the Chief Executive of the Regulatory Authority;”.

13.

Section 79

Substitute the following subsection for subsection (1):

 

 

“(1) A person who is found guilty of an offence under section 9, 10(16), 16(14), 19(1)(b), 21(9), 23(1), 23(15), 28(6) and (9), 30, 34(1), 34(3), 35(4), 36(6), 46(2), 52(3), 52(5), 52(6), 52(9), 54(6), 56(9), 61(14), 75(3), 78(2), 79(4), 79(7), 79(8) of, or paragraph 8(3) of the First Schedule to this Act is liable—

 

 

(a) on summary conviction to a fine not exceeding €1,250 or, in the case of a natural person, to imprisonment for a term not exceeding 12 months, or both, or

 

 

(b) on conviction on indictment, to a fine not exceeding €1,250,000 or, in the case of a natural person, to imprisonment for a term not exceeding 10 years, or both.”.

14.

Second Schedule

Repeal the Schedule.

 

PART 12

Amendment of Consumer Credit Act 1995

Item

Provision inserted

Amendment

1.

Section 2

(a) In subsection (1), insert the following definition after the definition of “borrower”:

 

 

“‘business’ includes trade and profession;”;

 

 

(b) in subsection (1), substitute the following definition for the definition of “consumer”:

 

 

“‘consumer’ means—

 

 

(a) a natural person acting outside the person's business, or

 

 

(b) any person, or person of a class, declared to be a consumer in an order made under subsection (9);”;

 

 

(ba) in subsection (1), to substitute the following definition for the definition of “housing loan”:

 

 

“‘housing loan’ means—

 

 

(a) an agreement for the provision of credit to a person on the security of a mortgage of a freehold or leasehold estate or interest in land—

 

 

(i) for the purpose of enabling the person to have a house constructed on the land as the principal residence of that person or that person's dependants, or

 

 

(ii) for the purpose of enabling the person to improve a house that is already used as the principal residence of that person or that person's dependants, or

 

 

(iii) for the purpose of enabling the person to buy a house that is already constructed on the land for use as the principal residence of that person or that person's dependants,

 

 

or

 

 

(b) an agreement for refinancing credit provided to a person for a purpose specified in paragraph (a)(i), (ii) or (iii), or

 

 

(c) an agreement for the provision of credit to a person on the security of a mortgage of a freehold or leasehold estate or interest in land on which a house is constructed where the house is to be used, or to continue to be used, as the principal residence of the person or the person's dependants, or

 

 

(d) an agreement for the provision of credit to a person on the security of a mortgage of a freehold or leasehold estate or interest in land on which a house is, or is to be, constructed where the person to whom the credit is provided is a consumer;”;

 

 

(c) in subsection (1), substitute the following definition for the definition of “mortgage intermediary”:

 

 

“‘mortgage intermediary’ means a person (other than a mortgage lender or credit institution) who, in return for commission or some other form of consideration—

 

 

(a) arranges, or offers to arrange, for a mortgage lender to provide a consumer with a housing loan, or

 

 

(b) introduces a consumer to an intermediary who arranges, or offers to arrange, for a mortgage lender to provide the consumer with such a loan;”;

 

 

(d) in subsection (1), substitute the following definition for the definition of “mortgage lender”:

 

 

“ ‘mortgage lender’ means a person who carries on a business that consists of or includes making housing loans;”;

 

 

(e) insert the following subsection after subsection (8):

 

 

“(9) The Minister for Finance may, by order notified in Iris Oifigiúil, declare any specified person, or any person of a specified class of persons, to be a consumer for the purposes of the definition of ‘consumer’ in subsection (1).”.

2.

Section 12

Substitute the following subsections for subsections (1) and (2):

 

 

“(1) A person commits a summary offence under this Act if the person—

 

 

(a) in Part IA, contravenes section 7(2) or (3), 8(2), 8D or 8F, or

 

 

(b) in Part IB, contravenes section 8K(2) or (3), 8L(2) or 8P, or

 

 

(c) in Part II, contravenes section 26 or 27, or regulations under section 28, or

 

 

(d) in Part III, contravenes section 39, or

 

 

(e) in Part IV, contravenes section 43(2), or

 

 

(f) in Part VI, contravenes section 61, 64 (1) or 69, or

 

 

(g) in Part VII, contravenes section 87 or 91, or

 

 

(h) in Part VIII, contravenes section 93(6) or (9), 94, 95, 98(4) or (5), 99, 105(3) or (4), 106(2) or (3), or

 

 

(i) in Part IX, contravenes section 116(1) or (2), 117, 122(3), 123, 124, 128, 129(2), 130, 131(4) or (5), 132, 133(1) or (2), 134 or 135(3), or

 

 

(j) in Part X, contravenes section 138, 139, 142 or 143(2), or regulations made under section 137, or

 

 

(k) in Part XI, contravenes section 144(1) or (3), 145 or 148.

 

 

(2) A person commits an offence under this Act (other than a summary offence) if the person—

 

 

(a) in Part IV, contravenes section 45, 46 or 49, or

 

 

(b) in Part V, contravenes section 54, or

 

 

(c) in Part VIII, contravenes section 96, 97, 98(1) or (2), 100, 101, 102, 103(2), 107, 110 or 111, or

 

 

(d) in Part IX, contravenes section 118 or 127, or

 

 

(e) in Part X, contravenes section 140, or

 

 

(f) in Part XI, contravenes section 146, or

 

 

(g) in Part XII, contravenes section 149(1), (12A) or (12C), section 149A(2), (14) or (16) or a direction given under section 149(5) or (6) or section 149A(6) or (7).”.

3.

Section 116

(a) Substitute the following subsection for subsection (7):

 

 

“(7) Except as provided by subsection (7A), an authorisation remains in force for 12 months from the date specified in the authorisation.

 

 

(7A) In the case of a particular applicant, or an applicant of a particular class designated by the Bank for the purposes of this subsection, the Bank may, if it so chooses, grant an authorisation for a period longer than 12 months, subject to such conditions or requirements as the Bank specifies. If the Bank grants an authorisation for a period longer than 12 months, the authorisation remains in force for that period from the date specified in the authorisation.”.

 

 

(b) Substitute the following subsection for subsection (9):

 

 

“(9) The Bank may refuse to grant an authorisation on any of the following grounds:

 

 

(a) the applicant does not satisfy the condition specified in subsection (1)(b);

 

 

(b) the applicant, or any business with which the applicant is or has been associated, has, during the previous 5 years, been convicted of an offence that, if committed by a natural person, would be punishable by imprisonment;

 

 

(c) the applicant is the holder of—

 

 

(i) a bookmaker's licence issued under the Betting Act 1931 , or

 

 

(ii) a licence for the sale of intoxicating liquor granted under the Licensing Acts 1833 to 1994, or

 

 

(iii) a gaming licence issued under the Gaming and Lotteries Act 1956 , or

 

 

(iv) a pawnbroker's licence granted under the Pawnbrokers Act 1964 , or

 

 

(v) a moneylender's licence;

 

 

(d) the applicant has failed to provide a current Revenue tax clearance certificate in respect of himself or his business;

 

 

(e) the applicant is not, in the opinion of the Bank, a fit and proper person to carry on business as a mortgage intermediary.”;

 

 

(c) Substitute the following subsection for subsection (11):

 

 

“(11) The Bank may suspend or revoke an authorisation on any of the following grounds:

 

 

(a) the holder no longer satisfies the condition specified in subsection (1)(b);

 

 

(b) the holder, or any business entity with which the holder is associated, is convicted of an offence that, if committed by a natural person, would be punishable by imprisonment;

 

 

(c) the holder has become the holder of—

 

 

(i) a bookmaker's licence issued under the Betting Act 1931 , or

 

 

(ii) a licence for the sale of intoxicating liquor granted under the Licensing Acts 1833 to 1994, or

 

 

(iii) a gaming licence issued under the Gaming and Lotteries Act 1956 , or

 

 

(iv) a pawnbroker's licence granted under the Pawnbrokers Act 1964 , or

 

 

(v) a moneylender's licence;

 

 

(d) the holder is failing, or has failed, to provide a current Revenue tax clearance certificate in respect of the holder or the holder's business;

 

 

(e) the holder is failing, or has failed to comply, with a condition or requirement imposed on the holder under subsection (7);

 

 

(f) the applicant is contravening or has contravened a regulation in force under subsection (10);

 

 

(g) the holder is no longer, in the opinion of the Bank, a fit and proper person to carry on the business of a mortgage intermediary;

 

 

(h) the Bank would, if the holder were an applicant for an authorisation, be entitled to refuse to grant an authorisation to the applicant on a ground specified in subsection (9).”.

4.

Section 149 (as substituted by item 42 of Part 21 of Schedule 1 of the Central Bank and Financial Services Authority of Ireland Act 2003 )

Insert the following subsections after subsection (12):

“(12A) A credit institution shall not impose a charge for providing a service to a customer or group of customers if—

(a) the charge has not been previously notified to the Bank or to the Director, or

(b) the charge exceeds the charge notified for the service in accordance with subsection (1), or

(c) the charge does not comply with a direction issued by the Bank under this section.

 

 

(12B) The Bank may, by notice given in writing, require a specified credit institution, or credit institutions of a specified class, to publish in such publications, and within such timeframes, as are specified in the notice details of the amounts of charges notified to the Bank under this section.

 

 

(12C) A credit institution to which a notice has been given under subsection (12B) shall comply with the notice within the timeframe specified in the notice.”.

5.

Section 149A (as substituted by item 43 of Part 21 of Schedule 1 of the Central Bank and Financial Services Authority of Ireland Act 2003 )

(a) Substitute “regulated business” for “bureau de change business”, wherever occurring;

(b) Substitute the following subsections for subsection (14):

“(14) A holder of an authorisation shall not impose a charge for providing a service to a customer or group of customers if—

(a) the charge has not been previously notified to the Bank or to the Director, or

 

 

(b) the charge exceeds the charge notified for the service in accordance with subsection (2), or

 

 

(c) the charge does not comply with a direction issued by the Bank under this section.

 

 

(15) The Bank may, by notice given in writing, require a specified holder of an authorisation, or holders of a specified class of authorisation, to publish in such publications, and within such timeframes, as are specified in the notice details of the amounts of charges notified to the Bank under this section.

 

 

(16) A holder of an authorisation to whom a notice has been given under subsection (15) shall comply with the notice within the timeframe specified in the notice.

 

 

(17) In this section—

 

 

‘bureau de change business’ has the same meaning as in section 28 of the Central Bank Act 1997 (as substituted by section 27 of the Central Bank and Financial Services Authority of Ireland Act 2004);

 

 

‘service’ means any service provided by the holder of an authorisation to a customer in relation to a bureau de change business or money transmission business carried on by that holder;

 

 

‘money transmission business’ has the same meaning as in section 28 of the Central Bank Act 1997 (as substituted by section 27 of the Central Bank and Financial Services Authority of Ireland Act 2004).”.

 

PART 13

Amendment of Netting of Financial Contracts Act 1995

Item

Provision inserted

Amendment

1.

Section 1

In the definition of “financial contracts”, substitute the following paragraph for paragraph (g):

 

 

“(g) contracts designated by regulations made under section 3.”.

 

PART 14

Amendment of Credit Union Act 1997

Item

Provision affected or inserted

Amendment

1.

Sections 37A, 37B, 37C, 37D, 37E and 37F

Insert the following sections after section 37:

 

“Member to receive written notice of loan approval.

37A.—(1) On approving a loan in accordance with section 36 or 37, a credit union shall, in writing, notify the member who applied for the loan of the approval and of any time limit within which the approval will expire.

 

 

 

(2) A notice under subsection (1) may be in a form that, when endorsed by the member on accepting a loan offered by the credit union, constitutes a credit agreement for the purposes of section 37B and 37C.

 

 

Credit agreement in respect of loans exceeding €200.

37B.—(1) If the amount of a loan approved by a credit union exceeds €200, the credit union shall ensure that—

 

 

(a) a credit agreement is entered into in writing and signed by the member concerned and by or on behalf of all other parties to the agreement, and

 

 

 

(b) a copy of the agreement—

 

 

 

(i) is handed personally to the member immediately after the agreement is entered into, or

 

 

 

(ii) is delivered or sent to the member within 10 days after the agreement is entered into, and

 

 

 

(c) any contract of guarantee relating to the loan is in writing and signed by the guarantor and by or on behalf of all other parties to the agreement, and a copy of the guarantee and the agreement—

 

 

 

(i) is handed personally to the guarantor immediately after the contract is entered into, or

 

 

 

(ii) is delivered or sent to the guarantor within 10 days after the contract is entered into.

 

 

 

(2) For the purposes of this section, a contract of guarantee—

 

 

 

(a) includes the indemnity referred to in section 35(1), and

 

 

 

(b) may form part of the relevant agreement or may be in a separate document.

 

 

 

(3) A credit union that makes a loan without having complied with subsection (1) commits an offence.

 

 

 

(4) If a credit union is found guilty of an offence against subsection (3), the following provisions apply:

 

 

 

(a) the credit union is taken to have waived all interest agreed to be paid by the member in respect of the loan;

 

 

 

(b) the member, or the member's personal representative, is entitled to recover as a debt, by proceedings brought in a court of competent jurisdiction, any interest paid in respect of the loan.

 

 

Contents of credit agreements.

37C.—(1) When entering into a credit agreement with a member, a credit union shall ensure that it contains a statement setting out the following particulars:

 

 

 

(a) the name and address of each party to the agreement;

 

 

 

(b) the amount of the loan provided under the agreement and the total amount payable in respect of the loan;

 

 

 

(c) details of the security (if any) given in respect of the loan;

 

 

 

(d) the date or dates on which the loan is to be provided (unless unascertainable at the time of the agreement);

 

 

 

(e) the number of repayment instalments under the agreement and amount of each of those instalments;

 

 

 

(f) the date, or the method of determining the date, on which each repayment instalment is payable;

 

 

 

(g) the rate of interest charged in respect of the loan and the relevant APR;

 

 

 

(h) the circumstances in which that APR may be amended;

 

 

 

(i) any charges that, although not included in the calculation of the APR, must be paid by the member in specified circumstances;

 

 

 

(j) the date on which the loan expires;

 

 

 

(k) the manner in which the member can terminate the agreement before the final repayment instalment is payable and the cost to the member of terminating the agreement;

 

 

 

(l) any cost or penalty that the member may incur for failing to comply with the agreement.

 

 

 

(2) The credit union shall also ensure that the agreement specifies a cooling-off period under which the member—

 

 

 

(a) has a right to withdraw from the agreement without penalty if the member gives to the credit union a written notice to that effect within 10 days after the date of receiving a copy of the agreement, or

 

 

 

(b) may indicate that the member does not wish to exercise the right.

 

 

 

(3) The indication referred to in subsection (2)(b) must be in the form of a statement signed by the member. The member's signature must be separate from, and additional to, the member's signature to the agreement.

 

 

 

(4) A credit union that fails to comply with subsection (1) or (2) commits an offence.

 

 

Notice of important information to be included in credit agreements.

37D.—(1) A credit union shall not enter into a credit agreement with a member, unless the agreement and the notice referred to in section 37A(1) display prominently on their respective front pages, in a form approved by the Bank, the following information:

 

 

(a) the amount of the loan;

 

 

(b) the period of the agreement;

 

 

 

(c) the number of repayment instalments;

 

 

 

(d) the total amount repayable to the credit union;

 

 

 

(e) the cost of the loan to the member;

 

 

 

(f) the APR in respect of the loan;

 

 

 

(g) particulars of the cooling-off period.

 

 

 

(2) A credit union that contravenes subsection (1) commits an offence.

 

 

Definition and calculation of ‘APR’ for the purposes of sections 37C and 37D.

37E.—(1) For the purposes of sections 37C and 37D—

 

 

‘APR’, in relation to a credit agreement entered into between a credit union and a member, means the annual percentage rate of charge.

 

 

(2) The APR specified in a credit agreement must be that rate, on an annual basis that equalises the present value of all commitments (loans, repayments and charges), future or existing, agreed by the credit union and the member concerned, calculated in accordance with the mathematical formula set out in Annex II to the European Communities (Consumer Credit) Regulations 2000 (S.I. No. 294 of 2000) as in force from time to time.

 

 

Regulations for the purposes of sections 37A37D.

37F.—The Minister may make regulations under section 182 as to the form and content of credit agreements and, for that purpose, may amend or modify sections 37A, 37B, 37C or 37D.”.

2.

Section 114 (as amended by item 77 of Part 24 of the Central Bank and Financial Services Authority of Ireland Act 2003 )

(a) In subsection (1)(a), substitute “the Minister for Enterprise, Trade and Employment” for “the Minister”;

(b) in subsection (1)(b), substitute “that Minister” for “the Minister”.

3.

Section 125

Insert the following subsection after subsection (8):

 

 

“(9) Nothing in this Part or in a credit union's rules prevents the Financial Services Ombudsman from investigating and adjudicating a complaint made against a credit union under Part VIIB of the Central Bank Act 1942 about the provision of, or the failure to provide, a financial service, so long as the complaint—

 

 

(a) falls within the jurisdiction of that Ombudsman under that Part, and

 

 

(b) does not relate to a matter that involves only the governance of the credit union.”.

4.

Section 126

Insert the following subsections after subsection (5):

 

 

“(6) The Financial Services Ombudsman may, if satisfied that the circumstances make it appropriate to do so, deal with a dispute that would, but for subsection (3), be a complaint in respect of which that Ombudsman would have jurisdiction under Part VIIB of the Central Bank Act 1942 .

 

 

(7) If the Financial Services Ombudsman elects to deal with a dispute as provided by subsection (6), subsection (3) ceases to apply to the dispute.”.

5.

Section 127

Delete the section.

 

PART 15

Amendment of Investor Compensation Act 1998

Item

Provision affected or inserted

Amendment

1.

Section 2

(a) In subsection (1), insert the following definition after the definition of “Act of 1995”:

 

 

“ ‘administration’, in relation to a collective investment scheme, includes (but is not limited to)—

 

 

(a) performing a valuation service, and

 

 

(b) performing a fund accounting service, and

 

 

(c) acting as a transfer agent, and

 

 

(d) acting as a registration agent;”;

 

 

(b) in subsection (1), substitute the following definition for the definition of “administrator”:

 

 

“ ‘administrator’, in relation to an investment firm, means an administrator of the firm appointed under section 33 or 33A;”;

 

 

(c) in subsection (1), insert the following definition after the definition of “close relative”:

 

 

“ ‘Companies Acts’ means the Companies Act 1963 as amended from time to time, and includes all Acts that are to be construed together with that Act as one Act;”;

 

 

(d) in subsection (1), insert the following definition after the definition of “Minister”:

 

 

“ ‘operator’, in relation to an investor compensation scheme approved under section 25, means the person responsible for operating the scheme;”;

 

 

(e) substitute the following subsection for subsection (5):

 

 

“(5) Despite subsection (1), a firm is not an authorised investment business firm, or authorised as such, for the purposes of this Act if—

 

 

(a) the firm is not an investment firm within the meaning of the Investor Compensation Directive, and

 

 

(b) the only activity that the firm is authorised to carry on under the Investment Intermediaries Act 1995 is either administering collective investment schemes or undertaking custodial responsibilities involving the safekeeping and administration of investment instruments of or relating to such schemes.”.

2.

Section 9

In subsection (4)(c), substitute the following subparagraph for subparagraph (iii):

 

 

“(iii) an authorised officer appointed under section 17A of the Central Bank Act 1971 , or”.

3.

Section 19

In subsection (3), insert “the operator of” after “by”.

4.

Section 20

Insert the following subsections after subsection (2):

 

 

“(3) The Company is responsible only for the expenses of an administrator that are properly incurred in the course of performing the administrator's functions under this Act.

 

 

(4) The Company is not responsible for expenses that an administrator of an investment firm incurs in respect of functions that the administrator performs contemporaneously with functions that the administrator performs as liquidator of the firm. It makes no difference that the functions performed as liquidator also relate to the performance of functions as administrator of the firm.”.

5.

Section 21

In subsection (3)(b), substitute “Investor Compensation Directive” for “Investment Services Directive”.

6.

Section 25

In subsection (6), substitute the following paragraph for paragraph (c):

 

 

“(c) as to the probity and competence of each of the directors and other persons concerned in the management of the proposed scheme,”.

7.

Section 27

In subsection (3)(a), insert “the operator of” after “the Company or to”.

8.

Section 32

(a) In subsection (1), substitute “the operator of” for “the person responsible for administering”;

 

 

(b) in subsection (1)(b), substitute the following paragraph for paragraph (b):

 

 

“(b) a court has made a ruling (other than a decision under the Companies Acts appointing an examiner or provisional liquidator),”;

 

 

(c) substitute the following subsection for subsection (2):

 

 

“(2) If the supervisory authority is satisfied that an investor was, for good reason, unable to make an application for a payment under section 34 within the period stipulated by the Company, or by the operator of the compensation scheme, the supervisory authority shall direct the Company or operator to treat the application as if it were made within the stipulated period.”.

9.

Section 33

(a) Insert the following subsection after subsection (1):

 

 

“(1A) The supervisory authority may appoint an administrator under subsection (1) only with the agreement of the Company.”.

 

 

(b) Substitute the following subsections for subsection (3):

 

 

“(3) The administrator shall deliver to the Company, or, where appropriate, to the operator of the compensation scheme concerned—

 

 

(a) a statement, or

 

 

(b) if an interim statement is delivered under subsection (3B), a final statement,

 

 

specifying the names of eligible investors and the net loss (if any) and the compensatable loss (if any) of each of those investors.

 

 

(3A) As a prelude to complying with subsection (3), the administrator may, if the Company or the operator of the relevant compensation scheme so agrees, deliver an interim statement specifying names of eligible investors and the estimated net losses (if any) and the estimated compensatable loss (if any) of each of those investors.

 

 

(3B) On, or as soon as practicable after, delivering a statement in accordance with subsection (3) or (3A), the administrator shall deliver a copy of the statement to the supervisory authority.”.

10.

Section 33A

Insert the following section after section 33:

 

 

“Appointment of liquidator or official assignee as administrator.

33A.—If the Court has appointed a liquidator or the official assignee in respect of an investment firm, it may also appoint the liquidator or official assignee as administrator of the firm, but only as a result of a proposal made by the supervisory authority with the agreement of the Company.”.

11.

Section 34

(a) In subsection (2), substitute “the operator of the compensation scheme” for “that compensation scheme”;

 

 

(b) substitute the following subsection for subsection (3):

 

 

“(3) If the administrator has delivered an interim statement in accordance with section 33(3A), the Company or operator of the compensation scheme concerned may make provisional compensation payments under this section on the basis of that statement. If, in relation to an eligible investor, the amount of compensation paid on the basis of that statement is less than that specified in the final statement delivered in accordance with section 33(3), the Company or operator of the compensation scheme concerned shall make a further compensation payment to the investor in respect of the outstanding balance.”;

 

 

(c) in subsection (4), substitute “the operator of the compensation scheme” for “the relevant compensation scheme”;

 

 

(d) in subsection (5), substitute “the operator of a compensation scheme approved” for “a compensation scheme approved of”;

 

 

(e) insert the following subsection after subsection (7):

 

 

“(8) The Company or the operator of the compensation scheme concerned may appeal to the Court against a statement of compensatable loss delivered in accordance with section 33(3) or 33(3A) on the ground that the loss has not been properly calculated in accordance with section 30. However, the right conferred by this subsection may be exercised only after consultation with the supervisory authority.”.

12.

Section 35

(a) In subsection (1), substitute “the operator of a compensation scheme approved” for “a compensation scheme approved of”;

 

 

(b) In subsection (1), substitute “the Company or operator” for “the Company or compensation scheme”;

 

 

(c) In subsection (2)(a), substitute “the operator of a compensation scheme approved” for “a compensation scheme approved of”;

 

 

(d) in subsection (5), substitute “the operator of an investor compensation scheme approved” for “an investor compensation scheme approved of”;

 

 

(e) in subsection (5), substitute “the Company or operator” for “the company or compensation scheme”;

 

 

(f) insert the following subsection after subsection (5):

 

 

“(5A) If—

 

 

(a) an eligible investor proves a claim in the liquidation proceedings referred to in subsection (5), and

 

 

(b) the amount proved exceeds the amount of compensation paid by the Company, or by the operator of a compensation scheme approved under section 25,

 

 

the claim of the investor and the subrogated claim of the Company, or operator of the compensation scheme, for the amount of the excess rank equally in those proceedings and are to be paid proportionately. If the assets are insufficient to meet those claims, they are to abate in equal proportions.”.

 

 

(g) in subsection (6), substitute “the operator of an investor compensation scheme approved” for “an investor compensation scheme approved of”;

 

 

(h) in subsection (6), substitute “the Company or operator” for “the company or compensation scheme”;

 

 

(i) insert the following subsection after subsection (6):

 

 

“(6A) If—

 

 

(a) an eligible investor proves a claim under a bond or policy of professional indemnity insurance referred to in subsection (6), and

 

 

(b) the amount proved exceeds the amount of compensation paid by the Company, or by the operator of a compensation scheme approved under section 25,

 

 

the claim of the investor and the subrogated claim of the Company, or operator of the compensation scheme, for the amount of the excess rank equally in those proceedings and are to be paid proportionately. If the assets are insufficient to meet those claims, they are to abate in equal proportions.”.

13.

Section 36

Substitute the following section for section 36:

 

 

“Provisions relating to investment product intermediaries.

36.—(1) A product producer from whom an investment product intermediary holds a valid written appointment shall, in respect of each eligible investor to whom the Company is liable to make a payment in respect of the intermediary under section 34, pay to the Company an amount calculated as follows:

 

 

 

A   =   ICL   ×   RAV

____

INL

 

 

 

where—

 

 

 

‘A’ represents the amount to be calculated;

 

 

 

‘ICL’ represents the eligible investor's compensatable loss;

 

 

 

‘RAV’ represents the amount of client money or the value of investment instruments forming part of the net loss of the eligible investor that were entrusted by the investor to an investment product intermediary for transmission to an identifiable product producer from whom the intermediary held a valid written appointment when the money was, or the investment instruments were, so entrusted;

 

 

 

‘INL’ represents the net loss of the eligible investor.

 

 

 

(2) Product producers are to be subrogated to the Company with respect to claims of the Company against an investment firm in relation to money that product producers have paid to the Company under this section.

 

 

 

(3) Nothing in a contract can affect the liability of a product producer under this section.

 

 

 

(4) The Company may, by proceedings brought in a court of competent jurisdiction, recover as a debt an amount payable to the Company under subsection (1).”.

14.

Section 39

In subsection (2), substitute “the operator of that compensation scheme” for “that investor compensation scheme”.