Dáil debates

Friday, 24 June 2005

Investment Funds, Companies and Miscellaneous Provisions Bill 2005 [Seanad]: Report and Final Stages.

 

10:30 am

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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Amendment No. 1 is in the name of the Minister and I ask him to propose that we recommit the Bill to Committee Stage for discussion on it.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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I move:

That the Bill be recommitted in respect of amendment No. 1.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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Is that agreed?

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I received a note from the Chair regarding amendment No. 11 in my name. It is a technical amendment that corrects what I believe to be an error. I ask the Minister of State to accept the recommittal of the Bill at that stage also so that the defect can be debated. I have no objection to the recommittal onamendment No. 1.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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We will deal with that when we come to it.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I thought it good to give the Chair notice of it.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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I will hear the Deputy on it when we come to it.

Question put and agreed to.

Bill recommitted in respect of amendment No. 1.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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I move amendment No. 1:

In page 8, between lines 5 and 6, to insert the following:

"(2) Without prejudice to the generality of subsection (1), an order or orders under that subsection may appoint different days for the coming into operation of section 31 so as to effect the repeal provided by that section of an enactment specified in it on different days for different purposes.".

As the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Michael Ahern, mentioned on Second Stage, the European Union has adopted a new directive on market abuse covering insider dealing and market manipulation on regulated markets. Part 5 of the Companies Act 1990 contains the existing law on insider dealing which implemented an earlier EU directive. These provisions apply where share dealing facilities are provided by a recognised stock exchange. Currently, the Irish Stock Exchange is the only such recognised stock exchange.

Part 4 of the present Bill paves the way for the transposition of the new EU market abuse regime. Section 30 enables the Minister to make regulations to transpose the relevant EU directives. Section 31 provides inter alia for the repeal of Part 5 of the Companies Act 1990. Section 37 allows for the Minister to apply the new Irish market abuse law to non-regulated markets. Any such application must be by way of provisional order that must be confirmed by an Act of the Oireachtas.

Currently, the Irish Stock Exchange operates the official list — the regulated market — on the recently launched Irish enterprise exchange, IEX, which in EU terms is not a regulated market for the purposes of certain EU directives emanating from the EU financial services action plan. It was always the intention to apply the market abuse regime to the IEX using the powers in section 37. However, it will be necessary to examine the proposed transposing regulations to be made under section 30 to see what modifications may be necessary in the application of the full market abuse regulations in the IEX. This will take some time.

In the meantime, it is considered undesirable to have no statutory prohibition on insider dealing applying to the IEX market. This amendment to section 2 will allow for the deferment of the repeal of part 5 of the 1990 Act in its application to the IEX market until the section 37 order can be made. The amendment is practical and sensible and I ask the House to accept it.

Amendment agreed to.

Bill reported with amendment.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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I move amendment No. 2:

In page 12, lines 10 to 12, to delete all words from and including "under" in line 10 down to and including "1942" in line 12.

As the Minister of State, Deputy Michael Ahern, mentioned on Committee Stage, it is the intention that the Central Bank and Financial Services Authority of Ireland, which is defined in section 6 of the Bill and is referred to throughout Part 2 as "the Bank", will designate its functions in Part 2 to one of its constituent bodies — the Irish Financial Services Regulatory Authority, known by its initials as IFSRA.

As currently worded, the annual report referred to in section 10(7) is that required pursuant to section 6 paragraph (i). This is the report of the Central Bank and Financial Services Authority. However, since it is IFSRA that will be required to present the annual report in this case, it is preferable that the text be amended for accuracy. This text now reads the same as section 3(6) of the Unit Trusts Act 1990. I would be grateful if the House accepted this amendment.

Amendment agreed to.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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Amendment No. 3 in the name of the Minister arises out of Committee proceedings. Amendment No. 4 is an alternative. Amendments Nos. 5, 6 and 7 are related and amendment No. 8 is an alternative to amendment No. 7. Amendments Nos. 3 to 8, inclusive, will be discussed together.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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I move amendment No. 3:

In page 21, line 28, to delete "filed" and substitute "lodged".

On Committee Stage, the Minister of State promised to consider amendments equivalent to the current amendments Nos. 4 and 5. Following the advice of the Office of the Parliamentary Counsel, amendments Nos. 3 and 5 now address the points raised and amendment No. 8 is, therefore, a consequential amendment. I do not intend to accept amendment No. 6 as I am advised that the current formulation in the Bill is satisfactory. It would be noted in particular that this already contains a requirement that the appeal must be lodged within five days. On amendment No. 7, we would prefer to keep the two-day timeline where it appears and, therefore, I do not intend to accept that amendment. I trust this puts the matter in context for the House.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Thank you, we always get clarity from the Minister of State. These amendments basically relate to procedures with regard to the appeals mechanism to the Supreme Court. I did not know much about the Supreme Court and its appeals mechanisms, but of late, as the Chair will appreciate, I am learning more about them through personal experience.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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We wish the Deputy well.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Unfortunately, I could not attend the Committee Stage debate because I was involved in an important committee sitting at the same time and my colleague, Deputy Burton, dealt with amendments for me. The Minister of State dealing with the Bill at the time undertook to consider the amendments and come back on Report Stage and has done so. What happens when one makes a coherent technical argument from the Opposition side of the House, never ceases to amaze me. One such argument was made with regard to, for example, in line 28, the deletion of the word "filed" and its replacement with the word "served". My colleague effectively argued on Committee Stage that the version in the original Bill is based on a misunderstanding of the procedure of the Supreme Court. It is based on a belief that one files the appeal first and then one serves it. In fact, the opposite is the case — the appeal is made when it is served. It is only after it has been served and a copy of it has been endorsed with the particulars of service that the Supreme Court will accept it for filing. That is the actual procedure. It would be extraordinary and unique if we were to decide that the mechanism for this Supreme Court appeal procedure was to be different. I have proposed the replacement of the word "filed" with the word "served" for that reason. When I win an argument on Committee Stage, I am always amazed on Report Stage to discover that the Minister is unwilling to accept the amendment I propose as a consequence. In this case, the Minister of State, Deputy Treacy, proposes the insertion of the word "lodged" rather than the word "served", which I have suggested.

Amendment No. 5 proposes the deletion of the word "delivered" and its replacement with the word "perfected". This change is necessary so that the provisions of the Bill are in line with the procedure used in the Supreme Court. An order is not "delivered" by the Supreme Court. I am awaiting a decision of the Supreme Court on matters in which I have a direct interest. My understanding of the procedure of the Supreme Court is that it does not deliver an order to anybody. When the Supreme Court makes a decision, the registrar who draws up the "perfected" order after the judge has made the verbal announcement in the court administratively creates the order of the decision of the Supreme Court. As I have said, the order is not "delivered" by anyone. The parties to the action make a formal request for the order.

I have also learned that in all cases between parties, the time for appeal to the Supreme Court of a High Court decision does not begin until the order has been "perfected". The perfection of an order can take months in some instances. The advice I have received from my legal adviser is that the word "perfected" is the appropriate word in this instance. The word "delivered" has no meaning within the understanding of the manner in which the superior courts operate.

Amendment No. 6 states that notice of an appeal to the Supreme Court "shall be filed in the Office of the Supreme Court within 5 days" of the order being served by the court. It seems to me that the amendment is appropriate because service comes before filing. I consider that five days is an appropriate timeframe within which to operate. I have not heard the Minister of State give any reason for any resistance to the use of such a mechanism for handling appeals.

A coherent argument was made on Committee Stage for the amendments I have tabled on Report Stage. The Minister of State seems to have accepted the essence of the amendments but he has not, for reasons that may be regarded as perverse, accepted the words I have suggested. I have been advised that they are the appropriate legal words, but the Minister of State has chosen different words. I hope he has not chosen his alternative words for the sole reason that they are not the words offered by the Opposition. I await a coherent argument from the Minister of State in explanation of why the amendments tabled by Members on this side of the House do not propose words appropriate for inclusion in the Bill. I ask him to explain why his words are preferable.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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I have listened with great interest to the remarks of Deputy Howlin, who is a very eminent legislator. I had the pleasure of his company and that of the former Deputy, Ivan Yates, on Committee Stage of the Child Care Bill 1988, which lasted 15 months.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I remember.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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All the Deputies on that committee helped to create very good legislation. My rule is simple — I do not believe anybody has a monopoly on wisdom. We need to listen to the views of everyone if legislation is to be strong, solid, focused and all embracing.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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The Minister of State must intend to leave soon because he is reminiscing.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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I will not leave for years. I will not leave until the people of Galway East decide that it is time for me to do so.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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It is a bad sign when the Minister of State is reminiscing.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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No. One must look back at history to pinpoint the way forward, but one must not be a prisoner of that history.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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We should always learn from history. Fair play to the Minister of State.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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Every elected Member has a role to play in the formulation of legislation.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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But——

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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Like the Minister of State, Deputy Michael Ahern, and our eminent officials, I do not have a desire to frustrate any quality contributions. I would not propose an alternative word for that reason. The words in the amendments I have tabled have been recommended by the Office of the Chief Parliamentary Counsel, following a great deal of examination on the part of that office. I have taken on board the advice of the office. I am sure the Deputy was pleased to learn that one of his amendments was accepted in his absence because it was considered to be meritorious.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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That is right.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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Amendments Nos. 3 and 5 have been tabled on the basis of the advice of the Office of the Chief Parliamentary Counsel. We agree with that office's recommendation of the word "perfected". We are totally guided by that advice in this instance. I listened with great interest to Deputy Howlin's comments about the Supreme Court. I am worried that justice delayed is justice denied. It is obvious that the decisions delivered by judges do not become operative until the perfection is carried.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Yes.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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I can understand all of that. Based on the eminent legal advice and taking into account the totality of the contributions made, in writing and otherwise, I regret that the amendments I have proposed are the best I can do today.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I was waiting for an erudite explanation from the Minister of State of the legal correctness of the words he has proposed, as opposed to the words I have proposed. It is not good enough to explain it to the House on the basis that it is the opinion of the Office of the Chief Parliamentary Counsel, as it is now known. I suppose "draftsman" is too pedestrian a term for such an eminent person.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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A counsel advises.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Matters could be hastened by putting the advice of the counsel on the record. I invite the Minister of State to do so.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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I do not have written advice. This has been a process of consultation, advice and discussion with the Office of the Chief Parliamentary Counsel. I do not have any written advice from the counsel, apart from the notes taken by the great officials while in his eminent presence. The final documentation is proposed on that basis.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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So we have to buy a pig in a poke.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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No. We are operating on the basis of the consensual conclusion of great people in their intellectual capacity, taking into account their experience and their understanding of the documentation before them and the words proposed.

Amendment agreed to.

Amendment No. 4 not moved.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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I move amendment No. 5:

In page 21, line 30, to delete "delivered" and substitute "perfected".

Amendment agreed to.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I move amendment No. 6:

In page 21, line 30, after "court" to insert the following:

"and shall be filed in the Office of the Supreme Court within 5 days after such service".

I did not hear any response from the Minister of State to my proposal that notice of an appeal to the Supreme Court "be filed in the Office of the Supreme Court within 5 days" of the order being served by the court. Is there any reason the timeframe suggested in this amendment cannot be accepted?

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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I have been advised that the present formulation of the Bill in this regard is satisfactory. It will be noted that the proposed new section 256D(2) of the 1990 Act, to be inserted by section 25 of this Bill, requires that the appeal be lodged within five days.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Is the provision proposed in my amendment already encompassed within the Bill?

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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I think so. I have been assured that it is.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Very good.

Amendment, by leave, withdrawn.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I move amendment No. 7:

In page 21, to delete lines 31 to 41 and substitute the following:

"(3) Notice of appeal by the umbrella fund shall be served on the Central Bank and on the relevant creditor who made the application pursuant to section 256C, and notice of appeal by the party that made the application pursuant to section 256C shall be served on the Central Bank and the umbrella fund.".

Question, "That the words proposed to be deleted stand", put and declared carried.

Amendment declared lost.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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I move amendment No. 8:

In page 21, line 31, to delete "filed" and substitute "lodged".

Amendment agreed to.

Bill recommitted in respect of amendments Nos. 9 to 11, inclusive.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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As amendments Nos. 9 and 10 are related, they may be discussed together, by agreement.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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I move amendment No. 9:

In page 30, line 43, after "€2,500,000" to insert the following:

"(and the means by which that limit shall be calculated, in particular in the case of a series of such offers of securities, shall be the same as that provided for by regulations under section 46 in relation to analogous limits specified by those regulations for any purpose)".

Since the definition of "local offer" was drafted for inclusion in this Bill, drafting of the regulations to transpose the Prospectus Directive has been progressed alongside the progression of this Bill through the legislative process. Arising from that exercise, there is a mismatch between what section 38 and the draft regulations say about the manner in which the limit of €2,500,000 is calculated. Amendments No. 9 and 10 will remove the mismatch and clarify the situation de facto.

Amendment agreed to.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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I move amendment No. 10:

In page 31, to delete lines 41 to 46.

Amendment agreed to.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I move amendment No. 11:

In page 32, to delete lines 32 to 34 and substitute the following:

"(2) Article 2 of the Companies (Recognition of Countries) Order 1964 (S.I. No. 42 of 1964) is amended by the substitution of 'section 250' for 'sections 250 and 367'.".

I have been given legal advice on this matter and I propose that Article 2 of the Companies (Recognition of Countries) Order 1964, S.I. 42 of 1964, be amended by the substitution of "section 250" for "sections 250 and 367".

The 1964 order recognises Northern Ireland and British company decisions for the purposes of four separate sections of the parent Act, the Companies Act 1963. The sole relevant sections of that Act to which I refer are sections 250, 367, 388 and 389. As currently promulgated, this Bill in section 37(1) repeals one of these sections, namely, section 367, but leaves the other three sections in place. I asked my adviser to check the other three section and was informed that following a check of the Attorney General's index, the other three sections have not been repealed by any other Act of the Oireachtas. Since the Attorney General's index is clear only up to the end of 2003, there may be some enactment since then of which I am unaware, but that is the position as I ascertain it from the available information. Accordingly it is not prudent to revoke the 1964 order, either to a specific extent or at all. One does not revoke the order. The correct course would be to delete the reference in the order to section 367, which is the import of my amendment.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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The current version of the Bill would regard this as section 40(2). I will quote from it:

The Companies (Recognition of Countries) Order 1964 (S.I. No. 42 of 1964) is revoked to the extent that it is for the purposes of section 367 of the Act of 1963.

I accept the validity of the amendment proposed by Deputy Howlin. However, I am advised that the present formulation of this Bill is satisfactory and that it is unnecessary to make any further changes in this regard. Consequently, I regret I am unable to accept the amendment.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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In parliamentary drafting terms, since the order is in place, sections of it will remain law under the Companies Acts of 1963, subsequent to the enactment of this provision. My understanding is that in practice one is not therefore revoking the statutory instrument but deleting a section of it. The formulation of the words "to revoke" in that context is not correct procedure. The Minister of State has made no argument in that regard. This is my strong advice arising from my experience. The formulation I suggest achieves what the Minister of State wants to do but in a manner consistent with normal parliamentary procedure.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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The Bill refers to Article 2 of the Companies (Recognition of Countries) Order 1964, so there is a recognition of that order, SI 42 of 1964 which, as the Bill says, is amended by the substitution of "section 250" for "sections 250 and 367". This proposal, as contained in the Bill — obviously having come through the due process of legal advice, the Office of the Attorney General, the Office of the Parliamentary Counsel and so on — with Deputy Howlin's amendment was put back for advice to the Parliamentary Counsel who, in discussions with our team, accepted the validity of the amendment proposed but advised that the formulation as proposed in this Bill is fully satisfactory and that it was unnecessary to accept the proposed change. That is the legal advice available to us and I am obliged to be guided by it. Is dona liom, but sin é.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The Minister of State is not obliged to do any such thing. This is Parliament. If we want the legal advisers to create law, we will then simply meet annually to rubber-stamp the drafts put before us by the Parliamentary Counsel. If the import of my amendment is right, if it is consistent with normal practice in legislation to date, if it is not in any way deficient and if it achieves the purpose which the Minister of State intends, why is he resisting it?

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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If an amendment brought forward from the Opposition has a legal import, we are obliged to take legal advice on it. We did so in this instance and the legal advice is that it is unnecessary to make this change. However, in view of the case made by Deputy Howlin, I will ask the eminent officials present to have further discussions with the Parliamentary Counsel, and if any further change is necessary when the Bill goes to the Seanad, we will consider it.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I am obliged to the Minister of State.

Amendment, by leave, withdrawn.

Bill reported with amendments.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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I move amendment No. 12:

In page 51, lines 3 to 10, to delete all words from and including "State" in line 3 down to and including "2A." in line 10 and substitute the following:

"State"—

(I) the only securities of which for the time being are authorised (or during the period of 5 years referred to in paragraph (b) were authorised) to be traded by a recognised stock exchange on a market regulated by that exchange are those specified in section 2A, and

(II) which is not a company prescribed for the purposes of paragraph (c).'.".

This is a further amendment to that agreed on Committee Stage. The takeover panel considered that the wording of the new paragraph 3 may allow a company that listed only equities or securities in London, and listed only debts or securities in Dublin to fall outside the scope of being a relevant company for the purposes of the Takeover Panel Act. The amendment now proposed will have the effect of preventing a company avoiding being treated as the relevant company by dividing its debt and equities between two separate locations.

Amendment agreed to.

Bill recommitted in respect of amendment No. 13

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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I move amendment No. 13:

In page 54, after line 42, to insert the following:

"87.—(1) Section 33AN of the Central Bank Act 1942 (inserted by the Central Bank and Financial Services Authority of Ireland Act 2004) is amended by inserting the following definitions after the definition of 'contravene':

'"designated enactment" does not include Part 4 or 5 of the Investment Funds, Companies and Miscellaneous Provisions Act 2005;

"designated statutory instrument" does not include the Market Abuse (Directive 2003/6/EC) Regulations 2005 (S.I. No. of 2005) or the Prospectus (Directive 2003/71/EC) Regulations 2005 (S.I. No. of 2005);'.

(2) Schedule 2 to the Central Bank Act 1942 (inserted by the Central Bank and Financial Services Authority of Ireland Act 2003) is amended—

(a) in the item relating to the Postal and Telecommunications Services Act 1983, in column 3 of Part 1, by substituting 'Sections 67 and 104' for 'Section 104',

(b) in the item relating to the Dormant Accounts Act 2001, in column 3 of Part 1, by substituting 'The whole Act' for 'Part 3 and section 17',

(c) by inserting in Part 1 the following item after the item relating to the Assets Covered Securities Act 2001:

'
No. 28 of 2001 Company Law Enforcement Act 2001 Section 110A
No. 2 of 2003 Unclaimed Life Assurance Policies Act 2003 The whole Act
No. — of 2005 Investment Funds, Companies and Miscellaneous Provisions Act 2005 The whole Act
',

and

(d) by inserting in Part 2 the following items after the item relating to the European Communities (Cross Border Payments in Euro) Regulations 2002 (S.I. No. 335 of 2002):

'
S.I. No. 211 of 2003 European Communities (Undertakings for Collective Investments in Transferrable Securities) Regulations 2003 The whole instrument
S.I. No. 198 of 2004 European Communities (Reorganisation and Winding-Up of Credit Institutions) Regulations 2004 The whole instrument
S.I. No. 727 of 2004 European Communities (Financial Conglomerates) Regulations 2004 The whole instrument
S.I. No. 853 of 2004 European Communities (Distance Marketing of Consumer Financial Services) Regulations 2004 The whole instrument
S.I. No. 13 of 2005 European Communities (Insurance Mediation) Regulations 2005 The whole instrument
S.I. No. — of 2005 Market Abuse (Directive 2003/6/EC) Regulations 2005 The whole instrument
S.I. No. — of 2005 Prospectus (Directive 2003/71/EC) Regulations 2005 The whole instrument
',".

Under the 1942 Central Bank Act, as amended by the Central Bank and Financial Services Authority of Ireland Act 2003, the Irish Financial Services Regulatory Authority, IFSRA, in respect of Acts specified in Schedule 2, discharges the function of the Central Bank and Financial Services Authority of Ireland. In Parts 2, 3, 4 and 5 of the present Bill, certain functions are being given to the Central Bank and Financial Services Authority of Ireland. It was always the intent that these would be discharged by IFSRA.

No difficulty arises in Part 3 as this Part amends Part XIII of the 1990 Act. However, in respect of Parts 2, 4, and 5, we have now been advised by the Office of the Attorney General and the Parliamentary Counsel that the necessary designation should be done by way of primary law. Separately, the Department of Finance already had under consideration some changes to the Second Schedule and was proposing to add other statutory provisions to the Schedule. The purpose of the amendment in subsection(2) is to make all the changes needed to the Second Schedule in primary law. The amendment in subsection(1) is required to ensure that the administrative sanction regime set up in the Central Bank and Financial Services Authority of Ireland Act 2004 does not apply to the market abuse and prospectus provisions. Consequent on that, I would be grateful if the House were to accept this proposal.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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Will the Minister of State clarify what section of the Bill he is proposing to amend?

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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I am speaking of a new section after section 86. We are proposing to add a new section.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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I have some concerns about the miscellaneous provisions attached to this legislation. I can make my argument on this amendment now or wait until later.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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It might be preferable to wait until the final Stage of the Bill, when the Deputy will have more scope to talk about everything in the Bill.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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Yes.

Amendment agreed to.

Bill reported with amendment.

Bill, as amended, received for final consideration.

Question proposed: "That the Bill do now pass."

11:00 am

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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My ministerial colleague, Deputy Michael Ahern, has asked me to convey his appreciation for the valuable input of Members to the debate on this technical and complicated legislation. He is appreciative of the co-operation he has received in ensuring the Bill passes all Stages in a relatively short time. Part 2 introduces a new contract fund structure, the common contractual fund, CCF, which is non-UCITS CCF to distinguish it from a CCF authorised under the UCITS regulations.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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That is clear anyway.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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Part 3 introduces investment fund segregated liability and cross-investment, facilitating the ring-fencing of liability at subdued level and allowing for cross-investment between sub-funds and an umbrella structure. Parts 4 and 5 facilitate the implementation of the EU market abuse and prospectus legislation. Part 6 makes a number of amendments to the Companies Acts that have arisen from difficulties with the operation of existing provisions, facilitates operators using electronic technology and rectifies an incomplete cross-reference in existing law.

Part 7 makes necessary amendments to consumer law, mainly increasing the maximum level of fines that can be imposed on conviction for breach of consumer protection legislation. It also amends the Competition Act 2002, the Irish Takeover Panel Act 1997 and the Industrial and Provident Societies legislation. Arising from amendments made earlier, it also amends the Central Bank Act 1942.

I thank Members for their valuable contributions and their co-operation. I also thank the staff of the Office of the Parliamentary Counsel and the Attorney General's office for their assistance in the drafting of the legislation and the excellent staff in the Department of Enterprise, Trade and Employment, whom I had the pleasure of working with for almost five years.

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael)
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I welcome the Minister of State's remarks. I support the investment fund amendments, which are required to implement an EU directive that will provide for an expanded financial services sector and enhance its administrative potential and the prospects for high value added employment. The success of the IFSC and its companies is testament to the need to amend the Acts mentioned to ensure they will continue to expand.

However, I am not satisfied the Minister has decided to make a small number of changes to consumer and financial services regulation at the tail end of the Bill, which, ultimately, transposes a technical EU directive. The lack of a consumer policy in the State has been brought to the attention of every Member. The consumer strategy group was established by the Tánaiste with the purpose of addressing this issue. The group attended a meeting of the Oireachtas Joint Committee on Enterprise and Small Business recently and my colleague, Deputy Howlin, and I had an opportunity to discuss the important recommendations made by it with the chairperson. We were disappointed with the lack of conviction on the part of the interim board representatives regarding the direction of consumer policy. The focus is on one market segment, namely, the grocery trade.

If the Minister felt it appropriate to do so, the legislation presented an opportunity to put the national consumer agency on a statutory footing. The interim board has been established without a representative of the Consumers Association of Ireland, which had a member on the group established to review consumer policy. The association has made a major voluntary contribution to the promotion of information and good ideas to amend consumer law to make it more palatable to the consumer.

All of us have been lobbied about the over-regulation that applies to a number of facets of company law. The Minister of State at the Department of Enterprise, Trade and Employment, Deputy Michael Ahern, has recommended a number of proposals for discussion by the company law review group arising from the audit and accountancy Bill, which both Deputy Howlin and I warned on its proposal was a sledgehammer to break a nut rather than a more balanced approach appropriate to the small business sector.

The issues of compliance statements, the regulatory environment, the changes to the Groceries Order and the need to establish an independent national consumer agency are important but all the Minister of State has done is provide for a modest amendment to the fines appropriate to the Restrictive Practices Act 1982 and the Sale of Goods and Services Act 1978. I welcome the increases, which update fines set 30 years ago. However, the Minister has missed an opportunity to implement an appropriate consumer protection policy and establish a national consumer agency, which would have meant that we did not have to wait another 18 months or for another election to put it on a statutory footing. For that reason, I oppose that segment of the legislation, which does not go far enough to address issues of concern.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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The Minister of State may need another right to reply. This is a technical Bill, which I have no difficulty in supporting, but I agree strongly with Deputy Hogan that had it been introduced as an investment funds Bill to deal with the directive, it would have been acceptable to address our requirements under the directive. The Minister of State added on a companies — miscellaneous provisions — Bill and made modest amendments to company law, particularly the 1964 Act, but the impression was created that an opportunity had been presented to do something in the area of company law, which is crying out to be addressed.

Deputy Hogan mentioned the consumer area. We began our detailed discussion with the consumer strategy group this week at the Joint Committee on Enterprise and Small Business. None of us left the meeting enthusiastic that the focus of the group was in the best interest of the proper balanced development of our country. The globalisation agenda is narrow and issues such as regional development, spatial planning, the core of towns and access of the vulnerable to commercial activity and so on should be included. None of these issues is one-dimensional and the Minister of State, Deputy Michael Ahern, would have a great deal of sympathy with this argument.

However, Ireland, which is a vulnerable economy because it is open and needs to be extremely competitive, has slipped in the competitive stakes in the past two annual assessments. We should not be complacent if we are to maintain the prosperity of the past decade. Last night, reference was made to the decline in manufacturing jobs and the increasing dependence on the service sector, to which we should be alert. High value jobs are needed. During the Reagan era, 1 million new jobs were created but one US citizen said, "I know Ronald Reagan created 1 million new jobs, but I have to have three of them to live." It must be ensured new jobs are high value. The framework of company law must be conducive to flexibility, competitiveness and high standards. Recently we passed health and safety legislation to ensure people are safe at work.

If we are to drive the Lisbon Agenda and provide flexibility in company law, particularly for small and medium sized companies, which are increasingly becoming the bedrock of indigenous employment in the manufacturing sector, we need to constantly update and revise legislation, not by putting an ever heavier hand on enterprise but with a light touch that will safeguard the interests of workers and ensure people in this economy can compete with the best elsewhere.

I agree with Deputy Hogan. Parliamentary time is difficult to secure, as the Minister for Justice, Equality and Law Reform knows. When important legislation from his Department went through the House last night only a fraction of the amendments to the Bill had been debated. Given that parliamentary time is a scarce commodity, when there is an opportunity such as today to consider important changes in company law in a calm atmosphere it is a pity there was not a more substantial Bill before us.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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I concur with many of the sentiments expressed by my colleagues. I respect their personal commitment to this area. I agree it is important that we give as much time as possible to parliamentary discussion. Nothing is more important than legislation and it is important that legislators can devote their time to creating good legislation. That is our primary role and it should be our main focus. Obviously, there are many other distractions that put pressure on Members but I hope we can continue to work together to produce the best legislation.

The recommendations of the consumer strategy group are under consideration by a high level interdepartmental committee that will report back to Government with a detailed implementation plan within three months.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Will Parliament have a role in that?

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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I hope so. I am sure an Oireachtas committee can consider the response.

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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We wish to have an input rather than just discuss the conclusions.

Photo of Noel TreacyNoel Treacy (Galway East, Fianna Fail)
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When the high level interdepartmental committee reports to the Government and proposals are put forward there is no reason they cannot be discussed in a committee. That would be the appropriate place to consider them.

Part 7 was drafted to update the provisions for breaches of existing legislation that remain on the Statute Book as one of the measures of consumer protection legislation which is implemented by the Office of the Director of Consumer Affairs. A major reform of company law is currently under way arising from the recommendations of the company law review group. Work on drafting the new principal Act is under way and the company law review group is assisting the Department of Enterprise, Trade and Employment in the necessary reform of the Companies Acts.

Deputy Howlin and Deputy Hogan referred to competitiveness and Deputy Howlin recalled the Reagan years in the United States. From a European perspective, it is critical that we focus on this issue. The Lisbon Agenda is critical at this time for ensuring that Europe is competitive and enjoys economic growth. This country is fortunate in that it has managed its affairs in a way that stimulates economic growth. Competitiveness is always a challenge and we must be mindful of that and work towards ensuring that we sustain our competitiveness. If it is not sustained, it will have serious implications for economic growth in the future.

Between the domestic management of competitiveness, the requirement to update the legislation on a continuous basis and the Lisbon Agenda at European level, there is plenty to be addressed. However, it is important that this legislation is passed and that, where possible, we improve our legislation. Some of the changes we have made today will be of benefit to the consumer. On that basis, we have done a good day's work.

Question put.

The Dail Divided:

For the motion: 50 (Noel Ahern, Johnny Brady, Martin Brady, John Browne, Joe Callanan, Ivor Callely, Pat Carey, John Carty, Martin Cullen, John Curran, Síle de Valera, Tony Dempsey, John Dennehy, John Ellis, Dermot Fitzpatrick, Seán Fleming, Pat Gallagher, Noel Grealish, Mary Hanafin, Máire Hoctor, Cecilia Keaveney, Billy Kelleher, Peter Kelly, Séamus Kirk, Tom Kitt, Brian Lenihan Jnr, Conor Lenihan, Michael McDowell, John McGuinness, John Moloney, Donal Moynihan, Michael Moynihan, Michael Mulcahy, M J Nolan, Seán Ó Fearghaíl, Charlie O'Connor, Willie O'Dea, Liz O'Donnell, John O'Donoghue, Ned O'Keeffe, Fiona O'Malley, Tim O'Malley, Peter Power, Mae Sexton, Brendan Smith, Noel Treacy, Dan Wallace, Joe Walsh, Ollie Wilkinson, Michael Woods)

Against the motion: 27 (Dan Boyle, Joe Costello, Ciarán Cuffe, John Deasy, Bernard Durkan, Damien English, Olwyn Enright, Eamon Gilmore, Marian Harkin, Phil Hogan, Brendan Howlin, Paul Kehoe, Pádraic McCormack, Paul McGrath, Paddy McHugh, Liz McManus, Gay Mitchell, Olivia Mitchell, Catherine Murphy, Gerard Murphy, Denis Naughten, Dan Neville, Séamus Pattison, John Perry, Emmet Stagg, David Stanton, Billy Timmins)

Tellers: Tá, Deputies Kitt and Kelleher; Níl, Deputies Kehoe and Stagg.

Question declared carried.

Photo of Rory O'HanlonRory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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As the Bill is considered by virtue of Article 20.2.2° of the Constitution to be a Bill initiated in the Dáil, it will be sent to the Seanad.