John Brassil (Kerry, Fianna Fail) | Oireachtas source

I welcome the opportunity to speak on this Bill. Since the UK's decision to leave the European Union in May 2016, there has been an almost constant sense of upheaval and uncertainty. We have already seen the Article 50 deadline extended twice and, in both instances, a no-deal Brexit was very much on the table. Today, we still live with the uncertainty of Brexit. The UK is going to the polls in just a few short weeks and the Government that results will dictate the course of Brexit. If, by the end of January 2020, the deal as has been currently negotiated is passed, the UK will have left the European Union. What will commence then is the work on putting in place a free trade agreement between the UK and the EU. This will not be a simple task and the deadline enshrined in the agreement of the end of 2020 will not make matters easier.

Notwithstanding the political uncertainty surrounding Brexit, the uncertainty felt in the business community has already had a real impact. While it has been said many times that uncertainty is bad for business, it cannot be underestimated. Businesses that otherwise would be in a position to invest, to grow, to create jobs and to expand into other markets are reluctant to do so because of the Brexit uncertainty. In the financial sector, it is no different. In the struggle to bring certainty to an uncertain situation, comprehensive changes are often needed, such as the one behind this Bill.

Brexit has not gone away, nor will it go away for some time. In order to bring political certainty and to provide the Government with the stability to negotiate Brexit, Fianna Fáil extended the confidence and supply agreement to cover a fourth budget. That budget, presented in October, came at the most uncertain of times, when a no-deal Brexit was a distinct possibility. Thankfully, on that occasion, that scenario was avoided. While we have given the Government the space to protect Ireland from a no-deal Brexit, we have been critical of the Government's preparation for Brexit. The Government was far too slow in hiring extra staff to deal with customs checks, it was too bureaucratic in rolling out vital funding for SMEs in the agrifood sector and it gave very little clarity on what would happen in a no-deal scenario. This lack of preparedness, I believe, added to the uncertainty in the economy. Earlier this year, the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Bill 2019 was passed with the support of the Fianna Fáil Party.

This legislation follows on in that vein.

The financial services sector in Ireland is a huge part of the economy. Like any economy around the world, Ireland needs a fully functioning, efficient and trustworthy stock exchange. For Irish companies to grow and compete on a global scale and to access vital funds, they need to be on the Stock Exchange. Before Brexit, Ireland enjoyed an economic sweet spot. We were attractive to US firms and investment funds, were part of the European Union and had a crucial historical connection to the financial services sector in London. After Brexit this changed significantly.

One of the many changes was to how our Stock Exchange works. Each stock exchange requires a CSD to function properly. These institutions enable the efficient trading of securities on the Stock Exchange. It is critical for the functioning of any stock exchange that these mechanisms are in place, work effectively and provide confidence. Without confidence, stock exchanges simply do not work.

Due to Ireland's historical connection to the financial centre in London, the Irish Stock Exchange, now called Euronext Dublin, availed of Euroclear UK, which is a central securities depository in the UK. When the UK becomes a third country following Brexit, under European legislation the Irish Stock Exchange will not be permitted to use a central securities depository in the UK. It is for this reason that Euronext Dublin, the Stock Exchange in Ireland, announced last year that it will no longer use the depository in the UK but will move instead to a similar institution in Belgium. In order to facilitate this move, this legislation is required. This transfer will involve the migration of highly sensitive functions and information, and such a move needs to be properly authorised by shareholders in advance. The Bill lays out the ground rules for this move and sets out the company obligations needed in advance of it. Companies need to issue circulars to their shareholders in advance of the passing of a special resolution. The Bill outlines what information needs to be contained in the circulars and outlines the penalties if companies do not comply with the legislation.

I have a number of broad points to make on the Bill and the wider financial services sector. First, I must question why it has taken this long to bring this legislation forward. The decision by the Euronext Dublin Stock Exchange to move to the Euroclear Bank Belgium was taken in October of last year. Perhaps this has to do with resources, but why were these provisions not included in the Withdrawal of the United Kingdom from the European Union (Consequential Provisions) Bill 2019 earlier this year?

Second, was consideration given to the establishment of one of these CSDs here in Ireland? Typically, each country with a stock exchange has a domestic CSD and there is no need to look beyond the country's borders. Here in Ireland we have relied for many years on London, and now we will rely on Belgium. I will ask a simple question. Would it not be preferable to have our own CSD here in Ireland? We would not have to rely on other countries if this facility were present in Ireland. Perhaps the Minister of State could address this in his response.

Third, I wish to raise the issue of the international financial services sector in general. Since the establishment of the IFSC in Dublin in the 1980s, this sector has grown from strength to strength. Ireland is home to among the biggest financial services companies in the world and plays a crucial role in the global financial world. Earlier this year the Government published its updated roadmap for the industry, which I welcome. The industry has been seeking legislation governing limited partnerships for a number of years now. The limited partnership model is preferred by many North American private equity funds, and at present we appear to be at a distinct disadvantage in attracting these types of funds to locate here. Fianna Fáil welcomed the publication of the Investment Limited Partnerships (Amendment) Bill 2019, yet since then it appears to have fallen off the radar. The Bill passed Second Stage in September but has yet to see the light of day in the finance committee. Passing that legislation would be a great boost for the sector in Ireland and could lead to substantial jobs growth in Dublin and throughout the country. Perhaps the Minister of State could provide an update on the legislation in his response.

Fianna Fáil will support the legislation before the House tonight. It is crucial for Ireland Inc. to have a seamless and smooth transfer to the new system. We look forward to engaging constructively with all parties to get the legislation passed in a timely manner in order that companies can make the arrangements required to move to Euroclear Belgium.

See this speech in context