Mr. Pat Houlihan:

With regard to public interest entities, we are concerned about that because as Ms Hall said, it appears that a number of entities that would not seem to merit being deemed to be in that category are in it. A technical sub-group of the Department’s main consultation group has been examining the proposals in detail and we are about to make a submission to the Commission. We are questioning what the bag contains and also the subtle undertones. I hope they are still subtle after this meeting. We will seek clarification on exactly what is contained and why certain issues were included.

As Ms Hall has said, in one sense it is unfortunate that we are in a minority position because of the undue proportion of companies in the financial services centre. Only a few other member states have similar concerns. The United Kingdom is one, and Malta and Luxembourg are others that would have raised their heads above the parapet on this particular issue.

To demonstrate what is being done in the proposals on the expectation gap, in essence, almost all of the good features of the regulation put bricks in the place of the big hole that currently exists that constitutes the expectation gap. There are good initiatives on the independence and conflict of interest area, the performance of the statutory audit and audit reporting. Ms Hall has touched on that and on the appointment of the statutory auditors. There is much good material in the proposals, which is being taken seriously at all levels in Brussels, both in the Council and in the Parliament. Nobody is saying that it does not do enough or that we should have something more. The Commission has the right of initiative and in some sense we must consume the helping that we are given. Other than within reason we cannot amend what was put before us. By and large, there is close to unanimity in the Council that this is a useful set of proposals. Some people think it goes too far which is a sign that it is getting something right and is biting somewhere. A similar good discussion is ongoing in the Parliament on all the key aspects of the proposal. I hope we will end up with a decent proposal once we have winnowed out all the elements that do not need to be there.