Michael Ahern (Cork East, Fianna Fail)

The primary national law relating to takeovers in this jurisdiction is the Irish Takeover Panel Act of 1997. This provided for the establishment, on a statutory basis, of the Irish takeover panel, which oversees extensive rules governing the many aspects of takeovers. The panel covers full takeovers as well as case of the acquisition of a substantial interest in a target company. Earlier this year, the European Communities (Takeover Bids (Directive 2004/25/EEC)) Regulations 2006, SI 255 of 2006, were signed into law by the Minister, Deputy Martin. These were designed to transpose into Irish law the necessary provisions to give effect to the EU directive in question. The regulations came into effect on 20 May 2006.

The directive has a narrower focus both as regards the range of companies covered compared with the current regime applying to takeovers here under the Irish Takeover Panel Act and the rules made by the panel for the exercise of its supervisory functions under the Act. The directive applies only to companies admitted to trading on a regulated market, which, in an Irish context means those companies on the official list of the Irish Stock Exchange, whereas the 1997 Act applies to a wider cohort of listed companies. In terms of transactions, the directive only applies to takeover bids whereas the Act also covers other transactions, including substantial acquisitions of shares and offers other than takeovers.

As a result of the transposition of the directive, certain differences exist as regards the takeovers regime applying here, depending on whether the company is a directive or a non-directive company. The primary purpose of the takeovers provisions in the Bill and the amendments made in the Dáil is to empower the panel to minimise these differences to ensure it can apply a single set of rules to all companies and transactions under its jurisdiction, if appropriate.

Perhaps the most significant of these amendments is amendment No. 31, which provides for the substitution of section 1(3) of the 1997 Act which is designed, as far as possible, to align the definition of "acting in concert" in that Act with that applicable in the 2006 regulations. This should provide greater clarity both for market participants as well as the Irish takeover panel and avoid undesirable confusion for all concerned.

Amendment No. 40 relates to the substitution of section 7D, being inserted by section 17 into the 1997 Act. The revised section 7D is expanded in content to spell out more explicitly the powers of the Irish takeover panel when making rules and the circumstances when these can be the same or different, depending on whether the proposed action is for a takeover bid or a takeover or other relevant action within the meaning of the 1997 Act. The remaining amendments in this group are all essentially self-explanatory technical or consequential amendments arising from what I have just described.

During the course of my contributions in this House, I explained that Part 3 was designed to partly transpose and partly pave the way for the transposition of the EU transparency directive. This directive deals with and requires disclosure of specific information by companies whose securities are listed on a regulated market. The directive is due for transposition by 20 January 2007. Due to the nature of some of the disclosure obligations arising, relating as they do to the financial situation of listed companies, it has been decided that the Irish Auditing and Accounting Supervisory Authority should be appointed competent authority in respect of these aspects of the directive. The other competent authority for the transparency directive will be the financial regulator, which is also the competent authority in respect of the transposing law for several related EU directives dealing with the publication of prospectuses and market abuse.

Amendment No. 14 provides for the amendment of section 9 of the 2003 Act to enable IAASA discharge the role of Irish competent authority arising from the requirements of Article 24(4)(h) of the EU transparency directive. Amendment No. 15 makes several amendments to section 10 of the Companies (Auditing and Accounting) Act 2003, which established IAASA, to facilitate it discharging the additional functions now proposed. In particular, IAASA will have the power to apply to the High Court to secure compliance with any of its rules relating to, or arising from, its new functions under transparency regulated markets law.

A further substantive amendment is being made by Amendment No. 16 by substituting section 29(7) of the 2003 Act in a way that accommodates the expanded grounds arising from these new functions that IAASA can petition the High Court to ensure compliance with its rules, etc. Several other amendments were made in Part 3 to deal with such matters as providing parameters within which civil liability may be provided for in regulations to be made by the Minister, and ensuring that any administrative sanctions regime will apply in instances of breaches of rules made by IAASA, as they will apply for breaches of rules made by the financial regulator. Section 87 of the Investment Funds, Companies and Miscellaneous Provisions Act 2005 added the legislation which implemented the prospectus and market abuse directives last year to those enactments to which sections 33C and 33AN and Schedule 2 of the Central Bank Act 1942 refers.

Amendment No. 45 make provision for the addition of the proposed transparency (regulated markets) law to the 1942 Act. The purpose of the amendments to section 33C and 33 AN is to ensure the administrative sanctions which the regulator possesses under the Central Bank and Financial Services Authority Act 2004 for the separate purpose of regulating financial institutions do not apply to the transparency legislation. The purpose of the second part of the new section is to ensure the financial regulator can discharge the functions of the Central Bank and Financial Services Authority arising under Part 3 and the whole of the upcoming Regulations implementing the transparency directive.

Returning to amendments made to Part 3, I draw attention to the amendments made to the definition of what is termed "Transparency (regulated markets) law". Senator Coghlan had tabled several amendments on Committee Stage in this House seeking to have such changes made, as did Deputy Hogan in the Dáil, and the end result of the Parliamentary Counsel's reconsideration of this matter was the making of the amendments.