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

Investment funds are established for the purpose of investing the pooled funds of investors in assets in accordance with the investment objectives and policies published in the proposed prospectus. A fund is established for a particular purpose and the objectives of that fund are set out in the prospectus. People in normal society are then free to invest in that fund. In the context of investment limited partnerships, the investment fund will be authorised as an investment if it meets the requirements of the Central Bank's rules and guidance. It will be an alternative investment, known as an "alternative investment fund" which is recognised across the EU and can be marketed across the EU's internal market. Nobody here wants to limit the free movement of people, goods and services within the EU. An investment limited partnership may seek investment exposures which are not limited to Ireland or even to the EU. The amendment makes reference to the degree to which a fund could make a contribution within the State but it quite possible that some of the funds managed here will not be invested in Ireland. They could be invested anywhere in the EU or even outside the EU. It is not a requirement that the investment funds must be used solely in Ireland. That is not what this legislation is about because we are long past the position of trying to prevent the free movement of goods and services in the EU. This must operate in the EU context.

The European Social Entrepreneurship Funds regulation already provides the regulatory framework for funds with a social investment objective. Investment limited partnerships may be established under that regulatory framework and would be regulated by the Central Bank of Ireland. Furthermore, an EU regulation on sustainability disclosures in the financial services sector was recently agreed and will apply from March 2021. Under that regulation, it is a requirement that investment funds consider the environmental and social impacts of their investment. They are not obliged to solely invest in projects with environmental or social objectives. They will be obliged to consider such objectives as part of their prospectus but cannot be directed to invest solely in such projects. Funds will be obliged, before publishing any prospectus, to consider the impact on environmental and social objectives. That EU regulation will operate from March 2021.

It is for the reasons just outlined that I am not able to accept the amendments. They seek to limit investment to within the State but it is accepted that the scope of these funds should be broader than that. Further, these funds will be governed by EU processes and the new regulation on sustainability disclosures which comes into effect next year.