Pearse Doherty (Donegal, Sinn Fein)
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232. To ask the Minister for Finance when he, or his predecessor, became aware that the Central Bank was to become the ‘home’ country for Israeli bonds within the EU; the engagement he has had with the Central Bank on the matter since the International Court of Justice ruling in January; and if he will make a statement on the matter. [41592/24]

Jack Chambers (Dublin West, Fianna Fail)
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As the Deputy will be aware, the Central Bank of Ireland (CBI) as the financial regulator is independent in its operations. The CBI’s role as financial regulator extends to securities markets. In this regard it was designated as Ireland’s competent authority for the purposes of carrying out the functions of a competent authority referred to in the EU Prospectus Regulation (Regulation (EU) 2017/1129 – “the Regulation”) and the Irish Prospectus Regulations (Statutory Instrument No. 380 of 2019). Accordingly, I have no role or function in relation to this regulatory matter.

As this issue is a regulatory matter and within the competency of Central Bank of Ireland, as our competent authority, I have not raised this matter with them and I understand that this specific regulatory matter was not raised by my predecessor. Following consultation with CBI, my officials supplied factual information to the Budget Oversight Committee in relation to the matter. This followed on from a commitment that I made to the Committee on 18 September when the matter was raised. The factual information is set out below.

The Regulation applies to persons seeking admission of securities to trading on a European Economic Area (EEA) regulated market or making an offer of securities to the public within the EEA, albeit not seeking admission to trading on an EEA regulated market. The Regulation covers a variety of different securities, including third country government bonds. Third country issuers have to choose one of the competent authorities in the EU as their Home Member State subject to certain criteria set out in the Regulation.

It must approve any security prospectus that meets the standards of completeness, comprehensibility and consistency under the terms of the Regulation. The criteria for the scrutiny of the completeness, comprehensibility and consistency of the information contained in the prospectus is set out in a European Commission Delegated Regulation (Commission Delegated Regulation (EU) 2019/980).

The CBI cannot refuse the approval of a prospectus without a legal basis. An example of a legal basis would be the imposition of EU financial sanctions against the issuer, as was the case with Russian Sovereign Bonds following the invasion of Ukraine. The issuer can challenge any decision by the CBI to refuse a prospectus to the Irish Financial Services Appeals Tribunal or seek a review of the decision through the Irish courts.

The CBI approved the first prospectus for the State of Israel bond issuance programme in 2021. The securities are offered in Ireland (and Austria, France, Germany and the Netherlands through the EU passport). They are not listed on a regulated market in the EU but remain listed on the London Stock Exchange.

Prior to 2021, the UK was the EU Home Member State under the EU Prospectus Regulation for the State of Israel. Ireland was chosen by Israel as the new Home Member State after Brexit. The choice of Home Member State within the EU is up to the issuer and the CBI can only object if they believe they do not have legal jurisdiction for the approval based on the terms of the Regulation.