Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

Ba mhaith liom mo ghlór a chur leis an Bille seo agus cuirim fáilte roimh an Bille seo os comhair an Tí inniu. Beidh Páirtí Shinn Féin ag tabhairt tacaíocht don Bille seo. Tá cúpla ceist againn agus ábhar mion a táimid ag iarraidh tabhairt tríd ach beidh sin fágtha go dtí leibhéal coiste agus sílim go mbeadh sé fábharach dá mbeimid ábalta deileáil le oifigigh na Roinne fosta le cuid de seo a phlé sula théann sé go dtí leibhéal an coiste ach sa chéad dul síos, is dul chun cinn mór é go bhfuil sé os ár gcomhair inniu. Ba mhaith liom fosta ceist a chur ar cén fáth gur tháinig seo i bhfeidhm ar an 30 Eanáir ach nach bhfuilimid ach ag deileáil anois ag an Dara Céim inniu.

I welcome this legislation for several reasons. I have a query relating to how the measures came into force on 3 January, yet we are only dealing with Second Stage of the legislation today. However, I welcome it because of the content and because we are dealing with the matter through primary legislation. This point is important. This is complex law and is not being dealt with through secondary legislation, although that was an option. It is important that this law is dealt with through primary legislation. It will give the Select Committee on Finance, Public Expenditure and Reform, and Taoiseach an opportunity to tease out in detail the implications of the legislation and ensure that it is fit for purpose.

I note how this adds to an existing range of consumer protection legislation. There is now such a range and maze of codes, regulations and Acts. There is growing need for composite consumer protection legislation to clarify all codes and statutory instruments and all the various recommendations. That needs to come later down the road, perhaps.

The specialist nature of these provisions requires a separate Act and I have no issue with it. However, there is a wider issue with regard to pulling all the consumer protection provisions together into composite legislation. That will make it easier for people to know all the various strands of consumer legislation under a composite enactment.

Commentators have said that the second Markets in Financial Instruments Directive, MiFID II, is designed to throw light on some of the darker parts of the financial markets in investments. The measure does not necessarily imply that anything sinister or wrong is going on with such products or that part of the market. It simply means that they are out of sight and out of mind for the vast majority of us. It is fair to say that Ireland, more than any other EU state, with the possible exception of Luxembourg, is exposed to the possible reputational and actual damage of the vast financial sector that operates here, or at least operates here on paper.

MiFID II brings greater transparency, regulation and surveillance of deals done, investments made and benefits gained. That is welcome. It also shines a light on the casual boys' club of trading data and information that can exist. The amount of trading that goes on in the so-called dark pools and that is mired in secrecy will be limited. Brokers and traders will now have to report almost instantly the detail of deals done. That is welcome. Overall, it is a welcome, if perhaps unglamorous, addition to financial regulation.

I said in my opening remarks that I looked forward to examining at a later stage the exemptions Ireland has chosen to use. I hope to tease out the matter on Committee Stage with the Minister and I wish to give him advance notice. I intend to tease out the full explanation for, and secure reassurance on, why these optional elements do not dilute the effectiveness of MiFID II or leave us more exposed to reckless behaviour. That is something we need to be assured of.

I welcome the addition of section 9, which addresses the issues I have raised as well as a technical issue in the Financial Services and Pensions Ombudsman Bill. I will suggest amendments to the section. I have discussed an issue with a constituent. We have been dealing with the Department for a lengthy period now. I believe even more clarity is required. I would be happy to engage with officials of the Department in advance of Committee Stage to ensure we get this right. I am keen to have my concerns allayed on the need for an amendment. My concerns are technical but that would be helpful.

In short, the interpretation of what constitutes a fixed term may in a small way allow some financial service providers off the hook. This is clearly not within the spirit of the legislation. I have been in contact with the Financial Services and Pensions Ombudsman as well as many consumers who maintain the law still does not protect or empower them, especially in the case of so-called whole-of-life policies. I hope this will be teased out on Committee Stage. I welcome the remarks of Deputy Michael McGrath on the matter. We need to be able to find consensus on the matter on Committee Stage. When I was progressing my legislation through the House, I raised concerns in respect of the definition. At the time I did not have majority support for consideration of a different definition but it has come to pass that there is a block. I am unsure whether the matter falls under the remit of the ombudsman or this legislation. The ombudsman maintains the legislation says what it says and, therefore, there is a restriction. I am keen to hear the Government remarks on the matter. We always need to revisit legislation to determine whether it is doing what we intended.

Despite the differences we had regarding the definition at that time and my attempt to try to widen it in order that there would be no ambiguity regarding these products, I can safely say that everybody believed that these products would be within the scope of this Bill. It is something that I intend to address on Committee Stage, but given the technical nature of this Bill it would be far better if we were to agree and reach some consensus on this issue beforehand.

One of the issues addressed by the markets in financial instruments directive, MiFID I and II is the transparency brought to the process when an adviser, for example, has to declare that he or she has an interest in an insurer, for example, that he or she is recommending as a client. This is a crucial aspect of the legislation. To bring this back to the ordinary consumer, this is an issue which has caused problems. I have put a large amount of evidence before the Central Bank on a range of banks that failed to declare that they were the owner or part-owner of an insurer they recommended to market holders. There has been no action, as I understand it, from the Central Bank's point of view in that regard. There are difficulties with the Central Bank because when a person makes a disclosure to it, it is not able to report to him or her what it is doing.

I am aware that a High Court case on this issue was taken by a number of individuals who took a financial institution to court. They won that High Court case. The company appealed to a higher court and then withdrew its appeal. Therefore the law states what the law states. I assume there was an out-of-court settlement with those individuals. I have no reason to believe that did not happen. I know those individuals were not the only people who were missold that insurance product by the financial institution. This boils down to the fact that the insurance an individual bought when they took out their mortgage was owned or part-owned by the firm that was selling the mortgage. One is not allowed to do that without declaring it. It is unlawful to do that, and that is what the courts have found.

What was interesting about that case was that prior to it being heard in the court, this matter was brought to the attention of the Central Bank and it gave a slap on the hand but it did not carry out any enforcement proceedings in regard to it. I know that every single insurance product sold by this financial institution had the exact same terms and conditions. Thousands of people were affected. We talk about disclosure and non-disclosure and we now have the cervical cancer scandal, but information is power. Thousands of people were also missold the same product by the same financial institution and do not have a clue about it, as that High Court case would have been settled out of court and would have had attached to it a confidentiality agreement or a gagging order. Nobody else is aware that this is happening. This did not involve just that one institution. Some of the main lenders in this State were also involved in this practice. As I said, I have provided legal documentation to the Central Bank on this and it is something on which we need to see action taken.

That shows that, with all of the great laws that are in place, and MiFID I and II deal with this, without a regulator being prepared to act decisively at an early stage, they are worthless. Without information being provided to the consumers, how do they know that there is a technical part of the conditions that provide that a person who is the owner of an insurance company selling an insurance product to a customer must declare he or she owns the company or has an interest in it above 25%? That is what has happened. I ask the Minister of State to intervene, if possible, in regard to that.

In private meetings with the banks, I continue to push with them their responsibility on the tracker issue. I am very much of the view that they hope that issue is going away, but I am very much of the view that this scandal is far from over. There are groups, whether they be bank staff or those in the prevailing eight institutions, that simply cannot be wished away. I take this opportunity to appeal to the Minister of State to ensure that this does not linger on month after month, year after year, and that we would bring this to a speedy conclusion.

The legislation Deputy Ó Laoghaire and I drafted on class action suits is before the Joint Committee on Justice and Equality. That is to be welcomed and it will add to this suite of legislation which will give better protection to consumers.

I welcome this Bill and the fact that it is coming in as this type of legislation and that we will be able to deal with it in detail. It might allay some of my concerns about the exemptions we are using in respect of it, but we need to get it right regarding the few points I made, particularly about life insurance. It will be our intention to table an amendment to that effect but, with the experience the Department has of this matter, we would rather it came from the Department.

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