Joan Burton (Dublin West, Labour)
Link to this: Individually | In context

Question 96: To ask the Minister for Enterprise, Trade and Employment his response to the recently submitted annual report from the stock exchange pursuant to Part V of the Companies Act 1990 in regard to insider trading; if he is satisfied that sufficient procedures are in place to deal with this practice; and if he will make a statement on the matter. [31131/07]

John McGuinness (Carlow-Kilkenny, Fianna Fail)
Link to this: Individually | In context

Section 120 of the Companies Act, 1990 imposed a reporting obligation on every recognised stock exchange in relation to the exercise of functions under Part V (Insider Dealing) of the Act. The scope of that reporting obligation, as applying to the Irish Stock Exchange, was reduced significantly on the coming into operation on 6 July 2005 of the Market Abuse (Directive 2003/6/EC) Regulations 2005 (S.I. No. 342/2005). As a result of those Regulations, the Stock Exchange's supervisory functions and related reporting obligation, under Part V of the Act, now apply only to trading in Irish securities other than securities admitted to trading on a regulated market.

The Stock Exchange Report to which the Question refers is that for the year ended 31 December 2006, the first full year under the new regulatory arrangements. The Report meets the statutory requirements prescribed in Section 120 of the Companies Act, 1990 and has been noted.

Among the many significant changes introduced by the 2005 Regulations (S.I. No. 342/2005) was the appointment of the Financial Regulator (then described as the Central Bank and Financial Services Authority of Ireland) as the single administrative competent authority for the purposes of the EU Directive being transposed by those Regulations viz. Directive 2003/6/EC on insider dealing and market manipulation (Market Abuse Directive). The effect of this change is that the Financial Regulator is now the relevant supervisory authority in this country for the purposes of ensuring compliance with the new regulatory regime by issuers whose securities are admitted to trading on a regulated market. In practice, the companies involved here would be those attached to the Stock Exchange's so called official list and would include all the larger companies. The new system also includes strengthened provisions and arrangements for preventing, investigating and sanctioning insider dealing and market manipulation.

While the new regulatory arrangements are of relatively recent origin, I am confident that these Community-wide arrangements will prove to be adequate to deal with insider dealing/market manipulation behaviour found to be in breach of the new rules. I am also considering whether to extend the application of the new arrangements in this country to those markets which are not currently covered by them.