Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

I move amendment No. 4:

In page 4, line 36, after “interest” to insert “in the securitisation”.

As I mentioned earlier, these are technical amendments concerned with wording changes to reflect the securitisation regulation. The Central Bank has been consulted to ensure that they do not give rise to unintended consequences.

Amendment No. 4 will add the words "in the securitisation" to the term "retain on an ongoing basis a material net economic interest of not less than 5 per cent", so that it will now read "retain on an ongoing basis a material net economic interest in the securitisation of not less than 5 per cent". This is so that the term will reflect the securitisation regulation.

Amendment No. 5 will add the term "original lender" as another term that will have the same meaning as in the securitisation regulation.

Amendment No. 6 specifies that the owner, sponsor or original lender of the securitisation is required to retain on an ongoing basis a material net economic interest in the securitisation of not less than 5%. The previous wording only referred to "owner" while the revised wording reflects the regulation. These amendments are to give effect to our intention from the beginning, which has been to ensure that passive securitisation was not captured in any way by the new regulatory regime. As the Minister of State at the Department of Finance, Deputy D'Arcy, will know well given his responsibility for financial services, securitisation is a bona fide activity and an important part of the financial services sector in Ireland. It was never intended to capture this activity. Where it happens and involves a bank, for example, then the customer relationship would remain with the bank or financial institution. The provision is giving effect to that intention.

I will thank those who need to be thanked later on but I wish to highlight that this has been done in consultation with the Department of Finance and the Central Bank.

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