David Cullinane (Waterford, Sinn Fein) | Oireachtas source

I am sure the Minister of State will agree that this is not the most important Bill that will come before the House in his time - that is for sure. It is a highly technical Bill which seeks to make a contingency provision for the transfer of the settlement of trades in Irish equities and other securities from CREST in London to Euroclear in Belgium as a result of the uncertainty surrounding Brexit. I will speak briefly on the substance of the Bill.

While acknowledging that the Bill is technical in its provisions and that we in Sinn Féin would rather focus our attention on peoples' priorities and not on the interests of big finance, we recognise that this is a contingency provision to respond to the change brought about by Brexit. CSDs allow the transfer of securities and financial instruments through electronic book entries in a central register rather than through physical delivery. These CSDs exist in every EU member state for the ownership transfer of securities, except in Ireland. As one might predict, Ireland has relied on a CSD based in London. This CSD is operated by Euroclear, which uses a settlement system known as CREST. Like so many things, these CSDs are subject to EU rules and regulations; and like so many things, Britain's exit from the EU will call into question Ireland's reliance on the CSD in London. Because of this, the Irish equity market has had to rethink its reliance on the London CSD and has been able to rely on this Government's high regard for its interests.

In October 2018 Euronext Dublin announced it would transfer settlement of trades in these securities from CREST in London to a CSD based in Belgium. This raises the question, why are we not setting up our own CSD? It also raises the question, if we leave or Belgium leaves the European Union, where will these security settlements then move? I question why we cannot set up our own CSD on the Dublin Stock Exchange. Perhaps the Minister could address this issue later. Because of Brexit uncertainty, the European Commission has allowed a temporary equivalence for CSDs located in Britain to allow the Irish market to continue using the current system until March 2021 in the case of a crash-out Brexit. As a result, the Irish market must move elsewhere before March 2021, and Belgium is the destination. Following the decision to move its settlement to Euroclear Bank Belgium, I understand a White Paper was published in May to set out a new model for the market. I also understand that the paper was based on legal advice provided by Arthur Cox. I congratulate Arthur Cox on another injection of public money into its coffers.

As I said, this is a highly technical Bill on an issue that concerns the settlement of securities trading. We look forward to scrutinising the Bill in greater detail on Committee Stage. For now, I ask the Minister to address my concerns about the fact that the CSD for the Irish market will move to Belgium and will not be based on the Irish Stock Exchange.

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