Michael Ahern (Cork East, Fianna Fail)

Yes, within a week.

On the point made by Senator Quinn regarding the principles-based regulation vis-À-vis rules-based regulation, we are always mindful of the need to strike the right balance. IFSRA was fully consulted on the provisions in the Bill.

I agree with the comment that introducing amendments to Bills on many different subjects is not the perfect solution. The Company Law Review Group has been examining future developments in regard to company law. A significant amount of work has already been undertaken by my Department in this regard, with the support and assistance of the members of the Company Law Review Group, to implement the group's recommendations for changes to company law. These recommendations, when implemented, will radically update, consolidate and reform company law. I hope that Bill will be available in 2006.

Without going into any great detail, it might be helpful to give a brief outline of the work in hand. In general terms, it is proposed to divide the present provisions found in company law into three broad categories or pillars, as follows: pure company law; market-related company law matters; and provisions relating to investment companies at present located in company law.

A brief overview of what each of these will deal with follows: at the heart of the changes is the proposal to refocus company law, such that the private company limited by shares with a standard constitution becomes the primary focus of the law. This reflects the fact that the private company limited by shares comprises over 88% of all companies on the register of companies in the Companies Registration Office, CRO.

To further facilitate this emphasis on the private company, Part A of the new principal Companies Act will solely deal with this category of company. This means that persons who are members of such a company will have all the company law applicable to them in the one place. Part B of the pure company law provisions will contain the appropriate law applicable to all other types of company, whether private and limited by shares but with specific objects, public limited, or private or public limited by guarantee or unlimited.

The market-related provisions, which for the most part will apply to public companies limited by shares, will deal with such matters as the preparation and issue of prospectuses when securities are issued to the public, with ongoing disclosure of information to the market and will also contain the national legislative provisions relating to market abuse. All of these are areas in which the EU has adopted directives. Some of the national provisions will be in primary law, and some will be contained in regulations made under the European Communities Act 1972, as amended.

The company law provisions relating to investment companies are at present found in Part XIII of the Companies Act 1990. As I mentioned in the introduction to the Bill, I and my predecessors have greatly expanded the range of legal vehicles that can be used by the investment funds industry, and the Bill introduces a further one, the non-UCITS common contractual fund — with which I will deal presently — or non-UCITS CCF for short.

As part of the programme for rationalisation of the underpinning legislation, and with a view to having as uniform a regulatory supervisory structure as possible in place for all investment vehicles, it is proposed to bring together all of the relevant law relating to investment entities in this third pillar.

My intention in giving this outline was to share with Senators the major reforms that are being planned and worked on by and in co-operation with the Company Law Review Group. It may be that a few interim stages may have to be negotiated to get to the final destination, but the Bill will allow a significant first preparatory step to be taken.

On the point made by Senator McDowell, on non-UCITS CCF, this mirrors what is done by Part XIII of the Companies Act 1990 regarding UCITS. Regarding the common contractual funds, the legislation will provide the legislative framework for an Irish-authorised and regulated investment fund structure which will allow for the pooling of assets of a number of pension funds.

Many multinational companies operate pension schemes in a number of different jurisdictions for the benefit of employees in those jurisdictions. When these local pensions funds are centralised or pooled, a number of cost savings are achieved through economies of scale. These savings include a reduction of management fees, administration costs and custodian fees. In addition, the pooling of assets allows smaller individual funds to diversify their risk by using a larger number of investment managers than would be possible if they were to operate on a stand-alone basis.

The availability of UCITS common contractual funds has allowed Ireland to market itself as a jurisdiction for consideration to multinational companies looking for an investment fund structure to pool the assets of a number of individual funds. The availability of an Irish pension pooling investment fund structure has been well received in the marketplace and it is anticipated that there will be a strong demand for the UCITS CCF.

However UCITS structures by their very nature include inherent restrictions, for example, restrictions in investment policy, acceptable asset classes, borrowing restrictions etc. These restrictions limit the value of the UCITS CCF structure and highlight the need for a CCF beyond the UCITS structure to complete the product range. Considering the experience, benefits and potential of the UCITS CCF structure due to its inherent restrictions, a number of the Department of the Taoiseach industry authority working groups, that is, the IFSC funds working group and the pension task force have highlighted the general introduction of a non-UCITS CCF structure. We can discuss the matter in greater detail on Committee Stage. In reply to another point made by Senator McDowell on setting the limit at €2.5 million for prospectuses, this limit was set in the directive.

I thank all Senators who contributed to this most useful and informative debate. I hope I have clarified most, if not all, the questions raised. We will consider these matters in more detail on Committee and Report Stages. I will examine the points that have been raised and I look forward to further debate on these matters.