Michael Healy-Rae (Kerry South, Independent)
Link to this: Individually | In context

Question 47: To ask the Minister for Finance his views on an investment (details supplied); and if he will make a statement on the matter. [11749/12]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

Firstly, I wish to inform the Deputy that it would not be appropriate for me to comment on an individual's investment portfolio. The Central Bank has in place a Consumer Protection Code (the Code). This Code applies to all financial institutions regulated by the Central Bank (regulated entities). The Code was introduced in 2006 and revised in 2010 coming into full force on 1 January 2011.The 2006 version of the Code placed a number of requirements on regulated entities about the contents of advertisements directed at "consumers". These requirements included providing consumers with a number of important warnings. Three of these warnings were particularly important in relation to investments, namely:

"Past performance is not a reliable guide to future performance".

Where an advertisement contained information on simulated performance it had to contain the following warning "These figures are estimates only. They are not a reliable guide to future performance of this investment".

Where a product could fluctuate in price or value, an advertisement had to contain the following warning "the value of your investment may go down as well as up".

The requirements for these three warnings have been included in the revised version of the Code. In addition, two other important warnings have been added. The first is that where the consumer may not get back 100% of the initial capital invested the advertisement must contain the following warning: "if you invest in this product you may lose some or all of the money you invest ". The second is that where the promised return on capital is only applicable on a specified date the advertisement must contain the following warning: "If you cash your investment before....you may lose some or all of the money you invest". A copy of the Central Bank's Consumer Protection Code may be accessed on the Central Bank's website www.centralbank.ie. In addition, the European Communities (Markets in Financial Instruments ) Regulations 2007 require that certain information about the nature and risks of financial instruments be provided to consumers. Regulation 84 specifies that an investment firm has to provide clients or potential clients with a general description of the nature and risks of financial instruments.