Michael D'Arcy (Wexford, Fine Gael) | Oireachtas source

-----trading that has the potential to cause systemic risks. It improves transparency and oversight of financial markets, and for the first time establishes the principle of transparency for non-equity instruments such as bonds and derivatives. The Bill also introduces measures to deal with excessive volatility, improves conditions for competition in the trading and clearing of financial instruments and builds and strengthens investor protection rules.

The directive was transposed into Irish law by statutory instrument in August of last year and it entered into application on 3 January 2018. However, it is necessary to provide for criminal sanctions and penalties for infringements outlined in MiFID II via primary legislation. Hence the need for this Bill. It provides that a person guilty of an offence under certain provisions of the MiFID II regulations, such as operating without authorisation, is liable on conviction on indictment to a maximum penalty of €10 million, imprisonment for ten years or both. This is a continuation of the criminal sanctions regime that existed in Irish law under our MiFID I regime.

While the main part of this Bill is the introduction of criminal sanctions under MiFID II, the Bill also contains amendments to definitions in the Credit Reporting Act 2013 and the Financial Services and Pensions Ombudsman Act 2017. The Credit Reporting Act provides that the Central Bank of Ireland shall establish, maintain and operate a database of specified personal and credit information known as the central credit register. The purpose of the register is to ensure that credit providers will have access to the most accurate and up to date information regarding a borrower's total debt exposure when considering an application for credit, or when an existing loan is in arrears or being restructured. It is advised by the Office of the Attorney General that the definition of "credit" included in the Act, which was intended to exclude trade credit from the scope of the central credit register, would also unintentionally exclude hire purchase and similar credit agreements. The amendment to the Act included in this Bill remedies the issue.

The Bill also makes an amendment to the definition of "long term contract" in the Financial Services and Pensions Ombudsman Act 2017 which refers to the European Communities Life Assurance Framework Regulations 1994. The policy intent was to capture life assurance contracts of all durations, including open-ended products. It has now emerged that the European Union (Insurance and Reinsurance) Regulations 2015 implementing the Solvency II Directive superseded the 1994 regulations for many insurance undertakings. This Bill amends the definition to ensure that products to which the 2015 regulations apply are also included in the definition. The purpose of this amendment is to grant access, on a statutory footing to the Financial Services and Pensions Ombudsman for consumers wishing to make a complaint about these products. I will now provide a short outline of the Bill.

Sections 1 and 2 contain the Short Title of the Act and a provision dealing with expenses incurred in the administration of the Act. Sections 3 and 4 repeal the criminal sanctions and penalties contained in the Markets in Financial Instruments and Miscellaneous Provisions Act 2007 and provide for further definitions. Section 5 provides for the definitions and details of fines and penalties that I have already outlined in relation to infringements of MiFID II. Section 6 allows the Central Bank to charge fees in relation to its functions under MiFID II. Section 7 contains an amendment to Schedule 2 to the Central Bank Act 1942. Section 8 amends the Credit Reporting Act 2013, as I have already outlined. Section 9 contains the amendment to the Financial Services and Pensions Ombudsman Act 2017. I thank my fellow Deputies for the opportunity to speak today on the Markets and Financial Instruments Bill 2018. I look forward to debating this measures and commend the Bill to the House.

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