Skip to main content
Normal View

Dáil Éireann debate -
Wednesday, 3 Jul 1991

Vol. 410 No. 3

Ceisteanna — Questions. Oral Answers. - Regulation of Investment Companies.

Ruairí Quinn

Question:

5 Mr. Quinn asked the Minister for Finance if his attention has been drawn to recent allegations of fraud and misappropriation of the funds of private investors and small investment companies; if he proposes to take any steps, including legislative measures to provide effective regulation of such investment companies and the protection of individual investors; and if he will make a statement on the matter.

I am very concerned at the recent allegations to which the Deputy refers. I understand that the fraud squad are investigating these allegations and it would therefore not be appropriate for me to comment on them.

The operation of the Insurance Act, 1989, in relation to the insurance related business of intermediaries is a matter for the Minister for Industry and Commerce. However, under the proposed European Community investment services directive, I will be introducing legislation to license and regulate, on behalf of the public, those areas of investment activity which are not currently subject to regulation. Under this legislation any person or firm providing such an investment service to the public will be required to be licensed and to meet ongoing supervisory requirements.

Will the Minister agree that a large number of small investors with little access to professional advice are at risk and in some cases appear to have been conned by people who are not being regulated by the Department of Finance or the Central Bank? Will the Minister indicate what action he proposes to take to alert people to the exposure they may have in relation to their investment with such companies or, indeed, any companies?

As I said, I am not going to comment on these allegations but it is probably a reflection on the pressures on investment managers from serious cashflow shortages as a result of the general economic downturn that has taken place. As I spelled out to the Deputy, supervision of insurance intermediaries is a matter for the supervisory authorities of the other areas. The issue of supervision in the various financial areas is being sorted out, with the Central Bank being given additional supervisory powers. There are still certain areas under the Department of Industry and Commerce. However, the public should always be aware — this is a fact of life no matter what time we are talking about — that people are inclined to respond to advertisements for a higher rate of return but time and again it has been proved to be a poor choice. The public will have to be aware that they make the choice and no matter what supervision is there if they make a foolish choice no legislation can make up for that.

I invite the Minister to say what he proposes to do.

I have to say to Deputies and the Minister that time is fast running out. If Question No. 6 is to be answered it must be responded to now.

If Question No. 6 is not answered all three Deputies will have had one of their Priority Questions answered. I am sure my two colleagues would not disagree——

(Limerick East): I disagree; that is not the rule.

Am I in order in inviting the Minister to take the opportunity, notwithstanding any legislation that may be in the pipeline, to publicly advise every small investor to make sure that an investment broker is bonded before they give him a shilling? The Minister has an obligation as Minister for Finance to regulate the market in that manner.

The Irish Association of Investment Managers have made a suggestion that we look at section 26 of the Central Bank Act, 1989, to see if that can be used.

Will the Minister issue a public advertisement?

I have no hesitation in warning the public in every way possible to be wary of making foolish investments to get an extra bit of money over the top.

They are being conned; they are being robbed.

This is the end of Priority Questions; I am sorry about that. The Chair does his best in these matters.

I will be putting an advertisement in the newspapers to advise people and the Central Bank have been asked to see what other ways they have available to them under present legislation to take action.

The Chair does his best to try to ensure that Priority Questions are dealt with within the prescribed time. On occasions the Chair receives no co-operation in this regard despite his best endeavours.

I thought the Chair handled the situation very well.

Yes, as far as the Deputy is concerned but, obviously, another Deputy is displeased.

(Limerick East): There are two questions left. May I have quick answers to them? I will not delay the House.

We are moving to other questions. I now call Question No. 8.

(Limerick East): May I raise a point of order?

I am not prepared to accept any further points of order on this matter which is covered by Standing Orders. If the Deputy feels there is anything fundamentally wrong with them——

(Limerick East): I am entitled to make a point of order.

No, the Deputy has already made a point of order.

(Limerick East): I have not made any point of order. The Chair did not allow me to do so.

Deputy Noonan, Standing Orders lay down the procedure for dealing with Priority Questions. If the Deputy feels there is anything fundamentally wrong with that he should seek to change it and I will be glad to co-operate with him in the matter.

(Limerick East): I want to make a point of order.

The Deputy has sought to do so for the last three or four minutes.

(Limerick East): That is correct and I should be allowed to make the point. There is an agreement in this House that the major Opposition party get three Priority Questions.

I am not aware of any such agreement.

(Limerick East): There is an agreement arising from a Standing Order and the Chair has an obligation to fulfil that.

I will accept no reflection on the Chair from the Deputy or any other Member. I do my best.

(Limerick East): The Chair allowed one Priority Question to dominate the proceedings. It took us eight or nine minutes.

The Chair does his best in these matters. I call for a reply to Question No. 8.

(Limerick East): The Minister is filibustering because he does not want to answer Priority Question No. 7 in particular. He has set the sheriff on people to try to improve the half year returns.

That is not so; I have no problems.

Deputy Noonan is abusing the privilege of Question Time and he should resume his seat.

(Limerick East): He set the sheriff on honest business people to try to improve the half year returns——

Deputy Noonan will resume his seat or leave the House.

(Limerick East):——and the Chair is helping him.

The Deputy should withdraw that remark or leave the House.

(Limerick East): Which remark would the Chair like me to withdraw?

The Deputy made a reflection on the Chair; that I was co-operating with the Minister.

(Limerick East): I intended no reflection on the Chair but the matter has been badly handled when there are two Priority Questions outstanding.

The Deputy is reflecting again upon the Chair.

(Limerick East): I am reflecting upon the Minister.

The Minister is always happy to answer questions, no matter what source they come from.

(Limerick East): The Minister is sending the sheriff after decent business people——

The Chair will change his attitude towards Priority Questions if this continues. We cannot delay any longer on Priority Questions.

We will be gone next Wednesday.

That may be so but I shall not forget it.

We should abandon Priority Questions; it is a nonsense.

Perhaps the Committee on Procedure and Privileges should have a very close look at this situation. The Chair will not continue to admonish Deputies in dealing with these questions and be treated in this fashion.

Top
Share