PART IV

Investment Product Intermediaries

25. —In this Act “investment product intermediary” means an investment business firm or a solicitor holding a practising certificate (within the meaning of the Solicitors Acts, 1954 to 1994) who—

(a) acts as a deposit agent or acts as a deposit broker, or

(b) provides a service of the reception and transmission of orders to a product producer in any of the instruments referred to in section 4 (2) (a) to (c) or shares in a company which are listed on a stock exchange or bonds so listed or prize bonds.

26. —(1) In this Act “restricted activity investment product intermediary” means a person whose only investment business service is receiving and transmitting orders in the instruments referred to in section 4 (2) (a) to (c) of this Act or receiving and transmitting—

(a) orders in shares in a company which are listed on a stock exchange or bonds so listed, or

(b) orders in prize bonds, or

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

or engaging in any or all of these services and, in the course of engaging in any of these services transmits orders only to all or any of the following, namely—

(i) investment firms authorised in accordance with Directive 93/22/EEC of 10 May, 1993(1) by a competent authority of another Member State, or to an authorised investment business firm, not being a restricted activity investment product intermediary, or a certified person, or to a member firm, within the meaning of the Stock Exchange Act, 1995, in the State;

(ii) credit institutions authorised in accordance with Directives 77/780/EEC of 12 December, 1977(2) and 89/646/EEC of 15 December, 1989(3) ;

(iii) to such other branches of investment business firms or credit institutions authorised in a third country as the supervisory authority may approve from time to time;

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

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

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

and which does not hold clients' funds or securities, so that in its dealings with clients it does not become a debtor to its clients, but this shall not prevent it from—

(I) taking non-negotiable cheques or similar instruments made out to one of the undertakings mentioned at subparagraphs (i) to (vi) of this subsection, for the purposes of the receipt and transmission of orders, or

(II) when acting as a deposit agent, taking cash from a client for the client's account with a credit institution.

(2) A restricted activity investment product intermediary shall, while it remains a restricted activity investment product intermediary, and notwithstanding section 10 of this Act, be deemed to be an authorised investment business firm for the purposes of this Act, provided that the restricted activity investment product intermediary has not had its authorisation revoked under section 16 (2) of this Act and not re-instated and that no director, officer or manager of the restricted activity investment product intermediary has been such a director, officer or manager of an investment business firm which has had its authorisation under section 16 (2) of this Act revoked and not re-instated.

(3) Subsection (2) of this section shall apply without prejudice to any of the powers of a supervisory authority in relation to this Act.

27. —A person shall not act as or hold himself out to be an investment product intermediary unless he holds an appointment in writing from each product producer for which he is an intermediary, and unless—

(a) he is a member of any approved representative body specified for this purpose by the Minister for Enterprise and Employment whose rules require compliance with the terms of this Act, or

(b) he is a certified person, or

(c) he otherwise complies with the provisions of this Act, and

he effects a policy of professional indemnity insurance in a form specified by the Minister for Enterprise and Employment (and different forms may be specified for different classes of person), after consultation with the Bank, indemnifying him up to such sum, in such manner, in respect of such matters and valid for such minimum period as the Minister for Enterprise and Employment may prescribe from time to time, following consultation with the Bank.

28. —(1) A product producer may not appoint an investment product intermediary to act on its behalf in the reception or transmission of orders in the instruments referred to in section 4 (2)(a) to (c) or shares in a company or bonds which are listed on a stock exchange, or prize bonds or in acting as a deposit agent or as a deposit broker or any or all of these, and may not pay any commission, fee or other reward to an investment product intermediary, or accept any orders transmitted by an investment product intermediary on behalf of a client, unless to the best of the product producer's knowledge and belief, having caused reasonable enquiry to be made, the investment product intermediary—

(a) is a member of an approved representative body specified by the Minister for Enterprise and Employment whose rules require compliance with the terms of this Act, or

(b) is a certified person, or

(c) otherwise complies with the terms of this Act and is of good character.

(2) A product producer may for the purposes of subsection (1) of this section assume that an investment product intermediary, not being a restricted activity investment product intermediary, which is authorised for that activity by a supervisory authority under section 10 of this Act, or by a competent authority in another Member State, complies with the terms of this Act.

(3) It shall be an offence for a person to provide false or misleading information for the purposes of obtaining an appointment for the purposes of section 27 of this Act.

(4) Where any payment in any form is made to or through an investment product intermediary, such that a receipt is required to be issued under section 30 of this Act, the payment shall be treated as having been paid to the relevant product producer when the investment product intermediary takes receipt of the payment:

Provided that the investment product intermediary has a written appointment from that product producer.

29. —A restricted activity investment product intermediary shall state on all stationery and in all advertisements and on first entering into a business relationship with a client that it is not within its terms of authorisation to accept cash (other than in relation to acting as a deposit agent) or other funds or securities on behalf of its clients or to act on a discretionary basis in the management of client funds and, without prejudice to the generality of the aforesaid, the Minister for Enterprise and Employment may prescribe other information to be given or conditions to be satisfied by a restricted activity investment product intermediary.

30. —Without prejudice to any codes of conduct which may be issued or approved of by a supervisory authority under section 37 of this Act, an investment product intermediary shall issue a receipt for each non-negotiable or negotiable instrument or other payment received for the purposes of transmitting an order or a deposit to a product producer and the receipt shall state succinctly the terms and conditions upon which a transaction was entered into and, without prejudice to the generality of the aforesaid, shall state clearly—

(a) the name and address of the person furnishing the instrument or payment;

(b) the value of the instrument or payment;

(c) the date of its receipt;

(d) the name of the person to whom the instrument is payable; and

(e) the purpose of the payment,

and an investment product intermediary which fails to issue such a receipt shall be guilty of an offence.

31. —(1) A product producer shall establish and maintain a register of all its appointed investment product intermediaries at its principal office in the State, if any.

(2) The register referred to in subsections (1) and (4) of this section shall be open to public inspection at reasonable times during normal working hours.

(3) A product producer shall provide the Minister for Enterprise and Employment with information to be included by a product producer in the register kept for the purposes of this section at such intervals as that Minister may specify.

(4) The Minister for Enterprise and Employment shall establish and maintain a register of all investment product intermediaries appointed by product producers.

(5) Where the appointment of an investment product intermediary is discontinued the product producer shall inform a supervisory authority immediately of the termination of the appointment and the circumstances surrounding the termination of the appointment.

⁽¹⁾ O.J. No. L.141 11/6/93.

⁽²⁾ O.J. No. L.322 17/12/77.

⁽³⁾ O.J. No. L.386 30/12/89.

⁽⁴⁾ OJ. No. L.26 30/1/77.