Tuesday, 23 October 2018
Markets in Financial Instruments Bill 2018: Committee and Remaining Stages
I would like to make one comment and I ask the Minister of State to take it back to his colleagues. A report of the Law Reform Commission by Dr. Patrick Honohan, former Governor of the Central Bank, was launched this morning. It recommends the establishment of a corporate crime agency to work directly with the new corporate crime agency in the Office of the Director of Public Prosecutions. I have gathered that this Bill does not actually address these matters.
The report also calls for the Financial Regulator to be able to impose fines and other instruments on a company or individual that has behaved badly. Interestingly, Dr. Honohan said he had taken the commonsense approach that reckless trading was a criminal offence that could and should be prosecuted. However, he was told to dream on, that there was not sufficient case law to establish a case against these people. That is an absolutely appalling statement from the Office of the Director of Public Prosecutions. If there is not sufficient case law, it should be established. The only way to establish case law is by taking cases.
Dr. Honohan has pointed out that reckless trading formed no part of the convictions of individuals for white-collar crime. That is appalling. I served as chairman of several companies that were working in the charitable field. They were limited companies. I suspended the operations of one of them because I was afraid of a prosecution for reckless trading if we went on. It seems to me that in light of the financial crisis that we went through eight or ten years ago, we really should establish a method of dealing properly with white-collar crime. I do not see any reason reckless trading should not be a prosecutable offence. It is time that the Office of the Director of Public Prosecutions was told to get off its backside and do something about this by establishing case law.
I thank the Senator. I note that the Central Bank can impose fines under the administrative sanctions regime. As the regulator it is allowed to do so. This legislation facilitates the criminal sanction of a penalty of €10 million, ten years in prison or both. That is what this legislation does and that is why it is so important.
I do not want to get into the conversation about a corporate crime agency. It is a broader conversation for another time. However, I do want to thank all the Senators who participated in the debate. This is really important legislation. It is another tool in our armoury to ensure what the Senator spoke of a moment ago, namely, that people know there is a serious criminal sanction of ten years in prison or a fine of €10 million.Ireland has developed a large financial services sector that is twice the size of the European average and employs 90,000 people in domestic and international financial services spread throughout the country. One third of the jobs are based outside County Dublin. The perception is that they are all in County Dublin but they are not.
The process of reform has turned from crisis management to how financial markets can serve the broad policy objectives of jobs and growth. We believe that putting in place criminal sanctions for serious infringement of the markets in financial instruments directive, MiFID, rules will provide a deterrent effect against any blatant misbehaviour and thus promote orderly markets, market integrity and investor protection.
Similarly the essential technical amendments to both the Credit Reporting Act 2013 and the Financial Services and Pensions Ombudsman Act 2017 are required to ensure that the central credit register and the Financial Services and Pensions Ombudsman cover the products envisaged by Government when initially enacted. The ombudsman will have the necessary power to investigate, where appropriate. This relates to Senator Kieran O'Donnell's question about long-term financial products and whole-of-life policies. The ombudsman has the authority to deal with these matters.
I thank the Senators who participated in the debate and I appreciate their flexibility and work on this legislation.
I commend the Minister of State on his stewardship of the Bill. The point made by Senator Norris is one on which, as the Minister of State said, we should have a debate at a future date. The Minister of State and Senator Kieran O'Donnell were members of the Joint Committee of Inquiry into the Banking Crisis. The point that drove people daft was that nobody in the eyes of the ordinary citizen, an gnáth-dhuine, was held to account. They went into courtrooms and people walked away. I am not going to question the courts.
What we need to see happen with respect to the armoury the Minister of State mentioned is for people to be held to account. To be fair to him, whatever else about him, he is a straight shooter, he does not hold back and he is a man for whom I have great admiration. There is no point in having all the armoury and all these tools in the holster if people are not held to account. To return to my fundamental point, people were driven cracked by the lack of accountability. In their dealings with insurance companies and banks, people talk about the small print, the fine print, having to shop around and all the different types of products. There is also an obligation on those institutions to be honest with people, which they are not in some cases.
I might not be too popular for saying that. I know the Minister of State during his tenure in office will always be one to advocate for accountability. Let us hope that those beyond this House and the other House will also use the armoury they have. If we learned nothing from the financial crisis and from engagement with a wide variety of institutions on a number of issues-----