Paudge Connolly (Cavan-Monaghan, Independent)

The difficulty is they have no way of proving they were not in the tax net. A small group of vulnerable people is affected by Revenue's plans in regard to insurance investments. Some of them cannot eat or sleep because of what is happening. As we have not yet reached the deadline, I propose that action be taken to address the issue because it will send people to an early grave.

A recent case of failure to refund insurance premia when loans were repaid early was brought to public attention by IFSRA's consumer section. This was another example of the authority's important role in highlighting abuses. The company law provisions in the Bill appear to be realistic and eminently reasonable. It is self-evident that changing circumstances require regular consolidation of company law. The rate of development nowadays is such that consolidation of company law will need to be revisited more frequently than has been the case hitherto. The accepted timeframe for consolidation of taxation law is ten years. It would be reasonable to take steps to make company law more accessible and understandable to foreign investors.

The sections dealing with market abuse and the penalties involved go a long way towards beefing up our laws on money laundering and insider dealing. Insider trading laws were initially introduced after the stock market crash of 1929. Examples of circumstances in which insider dealing occurs include projections of future losses or acquisitions; mergers or tender offers; news of significant sale of assets; changes in dividend policies; and impending bankruptcy or financial liquidity problems. In short, the practice can occur when material information becomes available which could reasonably affect the price of the stock. Given that the 1929 laws have not prevented insider trading, further legislation is necessary but new ways of circumventing this type of legislation will require us to continue to review penalties to discourage the practice.

The line between legal and illegal trading remains murky and this will probably continue to be the case because it suits certain quarters. For example, a person who overhears two company executives discussing a deal on an aircraft or discovers a company memorandum left behind on a seat, neither of which is an unlikely scenario, may use this information to trade to his or her heart's content because he or she would be exonerated in any subsequent investigation.

Maximum penalties of €10 million and-or ten years' imprisonment for transgressions in this area, while new to Ireland, are somewhat conservatively pitched when compared to penalties for similar offences in the United States. In this context, one recalls the junk bond scandal in the mid-1980s when Ivan Boesky and Michael Milken were fined $100 million and $47 million, respectively, in addition to receiving long stretches in prison. In more recent times, the case of Martha Stewart, America's trend setter in domestic matters, captivated the US public when she was jailed for five months and fined a paltry $30,000. Her crime was to offload $225,000 of shares in a biotech company, ImClone Systems, in December 2001, just one day before federal regulators turned down a review of a cancer drug developed by the firm. The judge took into account her loss of freedom, reputation and prestige in arriving at the penalties imposed.

Insider dealing is regarded as a white-collar crime and this Bill sets out certain penalties to deal with it. More adequate treatment for such offences would be that anyone found trading on inside information must pay the Government an amount equal to the profit made in addition to other penalties. Anyone found guilty of lying, misleading or providing false information to a market abuse investigation should be subject to heavy penalties. EU directives in this matter bind us, however, and our legislation must comply.

The Bill provides the legislative framework for an Irish-authorised and regulated investment fund structure that will allow for the pooling of assets by institutional investors. Pension schemes are operated by multinational companies in different jurisdictions for the benefit of employees in those jurisdictions. Economies of scale result in cost savings being made when these local pension funds are pooled, including a reduction in management fees, administration costs and custodial fees. Also, the pooling of assets permits smaller, individual funds to diversify their risk by using a larger number of investment managers than if they were operating on a stand alone basis.

It was emphasised that this Bill is designed for the financial services sector in Dublin. It is important, however, to remember that smaller business parks exist in rural areas, such as the Lough Egish business park in County Monaghan. If an international investor looked at the situation in that business park, he would see it does not have broadband and there is no way he would give it a second's consideration. Heroic efforts are being made to expand broadband across the State, with almost every town being dug up to lay broadband cable and this will prove to be a fantastic service. In Lough Egish, however, 12 companies are operating successfully and expansion is possible but it will not happen without broadband. If consideration was given to bouncing the signal from point A to B, we could overcome such difficulties.

In smaller towns, a small number of jobs would mean a great deal if they had adequate encouragement and support. It would give real meaning to decentralisation. Early this year we heard a great deal about decentralising but there are major difficulties with the project, although the intentions are good. The concept however, is to be welcomed. We could start by developing small centres. MBNA has offices in Carrick-on-Shannon and there is no reason we could not encourage such a business into an area like Cavan and Monaghan.

That is what decentralisation will become: international companies locating in small towns. An educated work force will be willing to move to them and that would then make them more attractive for Departments from Dublin. These issues must be addressed.

The IDA and Enterprise Ireland should not forget rural areas. We should ask about the number of jobs those agencies have attracted and how we will rebuild rural areas. We talked about hub towns and gateways but no real meaning was given to them. It was a nice strategy that got a week or two in the news but it has not delivered. Those ideas are good but they must be backed up.

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