Billy Kelleher (Cork North Central, Fianna Fail)

I welcome the Second Stage contributions from Senators as they have been very helpful and insightful. I was a Member of this House from 1993 to 1997 and I endorse the view that this House allows for broad, reflective debate at times and some very interesting points were raised by Senators on all sides.

I remind Senators that the Bill is very focused and aims to deal with a limited number of issues requiring immediate attention. Some of the company law suggestions made by Senators are not directly related to these urgent issues and therefore I consider that any positive response should await the major company law reform and consolidation Bill which is being drafted and to be published next year. This is a significant undertaking containing approximately 1,200 sections. It will consolidate all company law. There have been broad discussions with the stakeholders and the Government will be bringing the Bill forward as soon as possible but it is a significant undertaking by the Department and by all those who have been consulted.

The Tánaiste is still actively considering a number of the issues upon which there were divided views in the company law review group, for instance, the question of the directors' compliance statement which was raised by Senator O'Toole yesterday. The Tánaiste will bring her resulting legislative proposals to Government before the major Bill is published. It will be ultimately for the House to consider and adopt the final legislative proposals.

The contributions by Senators Cannon, Callely, Norris, Coghlan and Butler touched on financial regulatory matters that properly fall within the remit of the Minister for Finance. I will ensure these comments are brought to his attention for his consideration and that of his officials. Senators will be aware that the Minister for Finance has announced his intention to bring forward proposals for a revised regulatory framework for the financial sector. It is acknowledged that the financial services sector is of critical and strategic importance in the broader economy. Approximately 25,000 people are directly employed in the financial services sector and the Government wants to ensure there are proper and appropriate regulatory frameworks in place. There has been broad discussion about this issue and the Government does not intend to have a knee-jerk reaction to issues that have been raised in other jurisdictions particularly in the United States. We are aiming for a calm, rational analysis of the need for changes in regulation while at the same time being conscious that this country, as a global, open trading economy, is competing in the international markets and that financial services are very mobile. We must still be able to protect our integrity and assure investors and markets that the systems and regulations in place here are appropriate and will stand up to scrutiny. However, this is an issue for another day in the context of regulation of the financial services.

In response to the point raised by Senator Cannon yesterday and Senator Coghlan today, that the Office of the Director of Corporate Enforcement should have a role with regard to the activities of building societies and credit unions, the Tánaiste and I hold the view that the regulation of these financial services sectors rests with and should remain the responsibility of the Financial Regulator.

Senators Callely and Boyle raised issues relating to the disclosure of loans to connected persons. Section 26 of the Companies Act 1990 defines connected persons for the purpose of Part 3 of that Act, the Part which deals with transactions involving directors. This definition includes the directors' parents, brothers, sisters or children. As the Tánaiste explained yesterday, the Financial Regulator is empowered under the Central Bank Acts to require more detailed disclosures in the accounts of loans made to persons connected to directors of licensed banks. It must be remembered that company law covers all companies and only a limited number of companies are licensed banks. We need to be aware that this Bill must encompass all companies and is not just specifically for the areas referred to by some Senators. The provisions of this Bill accommodate the position whereby the Financial Regulator can, if considered appropriate, use a refined definition which will be solely appropriate to companies which are licensed banks.

Senator Boyle raised some fundamental questions about the nature of directors' loans and the purposes for which they are given. These provisions fall to be further examined in the reform and consolidation Bill as previously mentioned.

I refer to the point raised by Senator Ryan in connection with section 40. Is the Senator suggesting it could criminalise officers?