Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

Section 6 amends section 5(3) of the 1994 Act by changing "fair market value of the property" to "fair and appropriate value of the property" in order to track the language used in the EU directive on alternative investment fund management and its implementation. It also inserts the umbrella fund concept into the legislation, which is essentially one of the principal aspects of this Bill.

The setting up of any investment fund involves significant costs in terms of meeting legal and regulatory requirements, getting clearance at EU level as well as with the Revenue Commissioners and the Central Bank. There is a substantial amount involved. An umbrella fund means that instead of having to go through that process every time a new investment fund or sub-fund is created, the umbrella fund and all sub-funds under its control are all regulated by the Central Bank and all have to comply with the same Revenue rules. It means that a sub-fund can be established much more quickly under an umbrella fund that has already gone through the more extensive process at the beginning. I must stress that all such funds are fully regulated by the Central Bank. The reason this section is included in the legislation is to ensure that they are fully regulated by the Central Bank. This is part of the regulatory regime, to bring in sub-funds under an umbrella fund rather than every new investment fund having to commence the entire regulatory process again. The aim is to promote investment opportunities in Ireland.