Brian Cowen (Laois-Offaly, Fianna Fail)

A problem certainly arose in Britain in that respect but it was not an issue in Ireland. In respect of the impact of the sub-prime market on global markets, it is important to note that the sub-prime market constitutes 15% of the US market but less than 1% here.

From a practical point of view, it is important that home reversion products and activities such as lending on the basis of acquiring future equity are brought within the existing regulatory regime of authorisations, standards and codes that apply to all other financial service providers. The Irish financial services industry enjoys a good reputation and the regulatory regime works. It is important that we take the opportunity provided by this Bill to do what I was going to do in the context of the enactment of the third money laundering directive. That is the purpose of the additional amendments which are not germane to the Bill and require the passing of this motion to come within the Bill's ambit.

Regarding the question raised by Deputy Bruton on the National Pensions Reserve Fund and GNP definitions, the custom practised in the Department in respect of the annual contribution to the fund is to consider the GNP figure in the budget each year and to send an amount equivalent to 1% to the fund. That will continue to be the practice after the enactment of this Bill, so the actual contribution to the National Pensions Reserve Fund will not change as a result of this reform. We get the GDP figure from the CSO each year and derive a GNP figure in-house by using a methodology approved by the CSO. The actual definition in the legislation as it stands is somewhat convoluted and obscure, so we are introducing this provision as a technical measure for the sake of legal clarity and simplification. It will not change what actually happens each year.

The concerns expressed by Deputy Burton regarding contracts for difference will be addressed with the introduction of regulations from 1 November under the markets in financial instruments regime because they are classified as financial instruments under Schedule 1, part 3, paragraph 9 of SI 60 of 2007. Therefore, financial spread betting on, for example, specific shares, bonds or indices of shares will become a regulated activity from that date and firms providing these services will have to be authorised. The enactment of this Bill provides us with the regulatory cover for those activities if we proceed as suggested.

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