Simon Harris (Wicklow, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I thank the Deputy for his question. I have to be clear. We are not authorising things that are not already authorised in terms of UCITS, AIFs or the likes. We are putting a new vehicle in place for them to operate. Currently, there simply is not a well-fit vehicle for them to operate in. We already have a situation where there are similar such mechanisms as we are trying to put in place here in France, Luxembourg, the United Kingdom and a range of other European countries. We are trying to create an investment vehicle for funds in this country.

What we are doing, and I touched on it in the discussion on section 8, relating to the specific section is that the ICAV will require authorisation from the Central Bank to carry on the business of an ICAV. It also limits the business to that permitted to be carried on under this Act and, where applicable, the alternative investment funds regulation or the UCITS regulations which govern activities on investment funds. In essence, every ICAV will need an authorisation to carry on business either as an alternative investment fund or as a UCITS under the UCITS regulation.

I will defend to the death the idea that we are in any way dumbing down or reducing regulation. What we are trying to do is treat these as they should be treated and rather than involving the Companies Registration Office in something that is not a normal company, the Central Bank will take over the role. However, the actual level of scrutiny under the Central Bank remains, and the Deputy will see throughout the course of this Committee Stage that I am introducing a number of amendments that will further enhance regulation regarding accounting standards and so on that we will get to later.

On the section about which the Deputy has asked me specifically, every ICAV will need an authorisation either as an AIF or as a UCITS before it can conduct any investment activity. The UCITS regulations which are in place since 2011 already make provisions for such authorisations and a proposed amendment to the UCITS regulations contained in section 132 will enable an ICAV to apply to apply to be authorised as a UCITS. However, in respect of an AIF, it is necessary to provide for the authorisation of an ICAV as an AIF, and section 17 simply states that chapter 2 of Part 2 of the Bill provides for that authorisation procedure. In this section we are simply outlining the process that needs to be followed to be authorised as an ICAV.