Brian Cowen (Laois-Offaly, Fianna Fail)

Regarding the amendment before us, the definition of Irish investment services law in section 3 already includes the specific regulations referred to in the Deputy's proposed amendment so there is no need to refer to that part of the regulations, namely Regulation No. 188, which deals with summary offences. The Office of the Parliamentary Counsel agrees with this analysis and we are, therefore, not in a position to support the Deputy's proposal.

Regarding the wider issues raised by the Deputy, section 5 provides that a person guilty of an offence under certain provisions of these regulations, such as operating without authorisation, is liable on conviction on indictment to a maximum penalty of €10 million and-or imprisonment for a period not exceeding ten years. I would regard such a penalty as a serious outcome for any person.

It is considered in Regulation No. 7(1) that operating without authorisation, under the new Markets in Financial Instruments Directive, MiFID, regime as set out in SI No. 60 of 2007, should be an indictable offence to have sufficient deterrent effect. There are other proposed indictable offences in section 5. Regulation No. 40(1) relates to failure to keep records for the minimum time period. Regulation No. 109(6) relates to appointing a tithe agent who is not entered in a public register to be maintained by the bank. Regulation No. 112(1) relates to failure to keep proper books and records. Regulation No. 19 relates to providing false or misleading information in an application for investment firm authorisation. Regulation No. 52 relates to providing false or misleading information in an application to operate as a regulated market. Regulation No. 152(1) relates to advertising investment services and so on where not authorised. Also covered as indictable offences are misappropriation by an investment firm, obstructing an authorised officer, failing to comply without reasonable excuse with the instruction of an authorised officer, providing misleading information to an authorised officer where the person knows or ought to know that the information is false and misleading or wilfully or knowingly obstructing inquiries by the bank relating to acquiring transactions or knowingly or recklessly providing false and misleading information.

Subsection 4 provides that the conviction on indictment provision does not affect any penalty already provided for by Irish investment services law in respect of a summary conviction for that offence. The section is also without prejudice to the right to bring summary proceedings in respect of any offence. Subsection 5 provides that the section comes into operation on 1 November 2007 in tandem with the introduction of the other MiFID obligations.

Regarding the question of Ormond Quay, that bank was regulated by the German regulator.

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