Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I move amendment No. 26:

In page 58, to delete lines 30 to 37, and in page 59, to delete line 1 and substitute the following:

“(c) the other information provided for in the Schedule.

(3) The annual accounts shall give a true and fair view of the assets, liabilities and financial position of the ICAV at the end of the financial year and of the profit or loss of the ICAV for the financial year.
(4) The annual accounts may be prepared in accordance with—

(a) generally accepted accounting practice in the State,
(b) international financial reporting standards, or
(c) subject to subsection (5), an alternative body of accounting standards.

(5) To the extent that the use of any alternative body of accounting standards does not contravene any provision of this Part, a true and fair view of the assets and liabilities, financial position and profit or loss of an ICAV may be given by the use by the ICAV of those standards in the preparation of its annual accounts.
(6) In this section “alternative body of accounting standards” means standards that”.

Changes in EU law mean that all ICAVs will eventually be subject to a requirement that the auditor must confirm that the accounts present a true and fair view. This is a more exacting and explicit requirement and provides more detailed rules than were provided for in the Bill as published. The manner in which the requirement can be imposed on ICAVs has been the subject of some consideration. Section 94 permits the preparation of annual accounts to Irish accounting standards, international financial reporting standards and US and Japanese standards and envisages the standards of other jurisdictions being available also. The effect of the amendment to section 94 will be to continue to allow for a range of accounting standards but only in so far as they are consistent with the true and fair standard. The Central Bank will also be able to impose its own requirements on the accounting standards of ICAVs; therefore, while information can be presented for the benefit of investors in an accounting standard that they are, perhaps, more used to in terms of business, this will be allowed only in so far as these standards are consistent with a true and fair view and, if the Central Bank so chooses, with additional requirements which it can also impose. I hope the proposed change will be welcomed as sending a signal that there will be no diminution of the overall regulatory standards for the ICAV. Deputy Pearse Doherty raised the issue of accounting standards on Second Stage and I hope he welcomes the measure.
Amendments Nos. 68 to 70, inclusive, simply correct typographical errors in the Schedule, setting out the form the accounts of an ICAV should take. In the first instance, what should read as “total assets” reads as “totals assets” and in the second, what should read “total liabilities” reads “total assets”. The possibility of working to a range of accounting standards will be attractive to fund managers as it will allow them to present their annual accounts in a manner which may be best understood by their particular investor base and overseas investors. In determining precisely in other jurisdictions what accounting standards are acceptable, the Minister for Finance may make regulations prescribing them. An amendment is included to require the Minister to consult the Central Bank and other relevant stakeholders before making such regulations and this is a common-sense precaution. There is an amendment to section 98 on the report of the auditor of accounts to require that the auditor give his or her opinion on whether the accounts meet the true and fair standard and have been properly prepared in accordance with the relevant financial reporting framework.
This group of amendments also provides for an offence of a director of an ICAV failing to comply with his or her duty to comply with the section and corrects an oversight in section 94 of the Bill, as initiated, in that regard. This is setting out to restrict the ability of anybody to circumvent the true and fair requirement. If we insert it in the legislation, we can be proud of it because we will be ahead of the curve. Although it has not yet been transposed or introduced, it is prudent and appropriate that we introduce it in our ICAV.