Eoghan Murphy (Dublin Bay South, Fine Gael)
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I move amendment No. 7:

In page 5, between lines 4 and 5, to insert the following:

“Amendment of Companies Act 2014 with respect to market abuse matters

7. The Companies Act 2014 is amended—

(a) by the substitution of the following section for section 1365:

“1365.(1) In this Chapter—‘Commission Implementing Directive’ means Commission

Implementing Directive (EU) 2015/2392 of 17 December 2015 on

Regulation (EU) No. 596/2014 of the European Parliament and of the

Council as regards reporting to competent authorities of actual or

potential infringements of that Regulation;

‘CSMA Directive’ means Directive 2014/57/EU of the European

Parliament and of the Council of 16 April 2014 on criminal sanctions

for market abuse (market abuse directive);

‘Irish market abuse law’ means—

(a) regulations for the time being in force under section 3 of the

European Communities Act 1972 made for the purpose of giving—

(i) full effect to provisions of the Market Abuse Regulation, or

(ii) effect to provisions of the Commission Implementing Directive

or the CSMA Directive,

or both,

(b) any other enactment (other than, save where the context otherwise

admits, this Chapter) enacted for the purpose of giving—

(i) full effect to provisions referred to in paragraph (a)(i) of this

definition, or

(ii) effect to provisions referred to in paragraph (a)(ii) of this

definition,

or both,

(c) any measures directly applicable in the State in consequence of the

Market Abuse Regulation, and

(d) any supplementary and consequential measures adopted for the

time being by the State in respect of the Market Abuse Regulation

or either of the foregoing Directives;

‘Market Abuse Regulation’ means Regulation (EU) No. 596/2014 of

the European Parliament and of the Council of 16 April 2014 on

market abuse (market abuse regulation) and repealing Directive

2003/6/EC of the European Parliament and of the Council and

Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC;

‘Minister’ means the Minister for Finance.

(2) A word or expression that is used in this Chapter and is also used in

the Market Abuse Regulation, the Commission Implementing

Directive or the CSMA Directive shall have, in this Chapter, the same

meaning as it has in that Regulation or either of those Directives,

unless—

(a) the contrary intention appears, or

(b) Irish market abuse law provides otherwise.”,(b) by the deletion of sections 1366 and 1367,

(c) by the substitution of the following section for section 1368:“1368.(1) In this section ‘offence created by Irish market abuse law’ means an

offence created by regulations falling within paragraph (a) of the

definition of ‘Irish market abuse law’ in section 1365(1).

(2) A person who is guilty of an offence created by Irish market abuse law

(being an offence expressed by that law to be an offence to which this

section applies) shall—

(a) without prejudice to any penalties provided by that law in respect

of a summary conviction for the offence, and

(b) notwithstanding section 3(3) of the European Communities Act

1972,

be liable, on conviction on indictment, to a fine not exceeding

€10,000,000 or imprisonment for a term not exceeding 10 years or

both.”,(d) in section 1369—(i) in subsection (1) by the substitution of “Article 14 of the Market Abuse

Regulation” for “a provision of Irish market abuse law (being a provision the

purpose of which is expressed by that law to be for the implementation of

Article 2, 3 or 4 of the 2003 Market Abuse Directive)”, and

(ii) in subsection (2) by the substitution of “Article 15 of the Market Abuse

Regulation” for “a provision of Irish market abuse law (being a provision the

purpose of which is expressed by that law to be for the implementation of

Article 5 of the 2003 Market Abuse Directive)”,(e) in section 1370—(i) in subsection (5) by the substitution of “the Market Abuse Regulation, the

Commission Implementing Directive or the CSMA Directive” for “the

Market Abuse Directive or the supplemental Directives”, and

(ii) by the deletion of subsections (3) and (8),(f) in section 1371(1) by the substitution of “Market Abuse Regulation” for “2003

Market Abuse Directive”, and

(g) in paragraph 5(1) of Schedule 6 by—(i) the substitution of “section 1355 or” for “section 1355, 1367 or”,

(ii) the deletion of clause (b), and

(iii) the substitution of “section 1354 or” for “section 1354, 1366 or”.”.

I will lay out exactly what is happening here to be clear for the committee. I note that amendment No. 7 has been circulated to the committee. The Department of Finance transposed the 2014 European Union market abuse regulation and directive on 30 June, ahead of the 3 July deadline.

The EU's market abuse regime has been extended and developed since the first directive in 2003 to take into account new technologies and market developments. The investigative and sanctioning powers of regulators have been reinforced, while persons reporting potential infringements will be encouraged and protected. Insider dealing and market manipulation have been redefined in the market abuse regulation to, in effect, create new offences.

Prior to 30 June, Irish market abuse law punished market abuse crimes with fines of up to €10 million and imprisonment of up to ten years. The new criminal sanctions under the market abuse directive establish minimum rules for criminal sanctions for those offences and provide for a term of imprisonment of at least four years. However, under section 3(3)(b) of the European Communities Act 1972, a statutory instrument is inappropriate for the introduction of a new offence with fines of more than €500,000 and imprisonment over three years. To maintain the high tariffs, the Department was advised to amend section 136(5) of the Companies Act 2014 by changing the definitions from the 2003 market abuse directive to the 2014 market abuse directive via primary legislation. The amendment ensures that we comply with the new market abuse regulation and directive and will increase the penalty for market abuse up to €10 million and up to ten years imprisonment.

Amendment No. 7 amends section 136(5) to change the definitions in the Companies Act to account for developments in Irish market abuse law and to refer to the relevant EU regulations and directives. The deletion of sections 136(6) and 136(7) is due to their explicit referral to the 2003 market abuse directive. These provisions are no longer necessary due to the amendments to section 136(5). The amendments to section 136(8) ensure that offences under market abuse law are punished by fines of €10 million and imprisonment up to ten years. The amendment to section 136(9) relates to civil liability for breaches of market abuse law and points to the articles listing the offences in the market abuse Regulation No. 596/2014 EU. The amendment to section 137 continues the provision for supplementary rules to be made by the Central Bank which are published as its market abuse rules and the rules are based on Irish market abuse law. The amendment to Schedule 6 updates the wording to reflect the new market abuse regulation and directive.