Dr. Jim Stewart:

I thank the Deputy for his question. Regarding section 110, section 110 refers to this particular section in the 1997 Finance Act which underwrites an earlier provision. The basic idea was to encourage securitisation in the International Financial Services Centre, IFSC. Rather confusingly, there are two types of companies that may be section 110 companies. There are financial vehicle corporations, FVCs, that the Central Bank has been looking at for years and in which the European Central Bank, ECB, has been very interested, and then special purpose vehicles, SPVs, that may benefit also under this provision. There are thousands of special purpose vehicles in Ireland, only a small number of which are section 110 vehicles.

An interesting aspect is that according to Revenue data, there are approximately 2,200 of these that are alive; they are trading. However, according to Central Bank data there appears to be only about 1,650 so one of the issues Cillian Doyle and myself have been doing research on is to try to explain that gap. One of the possible reasons we have for explaining that gap is regulatory problems in locating an FVC and an SPV because it seems to us that the only way the Revenue finds out that a company is a section 110 company is when it is sending in its annual report and accounts. The Central Bank is supposed to collect this data within one week of anything trading but many companies do not seem to report to the Central Bank. Interestingly, many of the companies that have bought distressed property are in the Central Bank registry as a FVC but they are not strictly an FVC. There are many other companies that are simply omitted. That area certainly deserves much more research. I hope that is helpful to the Deputy.