Ivor Callely
Question:60 Mr. Callely asked the Minister for Finance the regulations that apply to the investment/financial service sector; if he has satisfied himself with the existing regulations; and if he will make a statement on the matter.
Written Answers. - Investment-Financial Services Sector.
The investment/financial services sector is a very wide area covering many activities and institutions.
Under the Central Bank Act, 1989, the Central Bank is the regulatory authority for banks and companies operating in the International Financial Services Centre, IFSC. The Central Bank also supervises the building societies under the Building Societies Act, 1989. Legislation in this area is the responsibility of the Minister for the Environment.
In relation to the Stock Exchange, under an Act dating from 1799, the Minister for Finance approves the rules of the Exchange and issues gilt dealer licences, which are a prerequisite for membership of the Exchange. However, the Government has already announced that it had decided to introduce legislation to change and update the existing regulation and supervision of the Irish Stock Exchange and its members. This legislation is intended to replace the existing legislation, which is inadequate for supervisory purposes, and for compliance with the requirements of the EC Investment Services Directive which is expected to be adopted very shortly. The Government also decided that the Central Bank of Ireland should be the regulatory authority in this area.
Regulation in relation to the listing functions of the Exchange are a matter for the Minister for Enterprise and Employment.
The Government has also announced that responsibility for the prudential supervision of financial service intermediaries whose activities are not currently subject to regulation will be assigned to the Central Bank. The process of preparing the complex necessary legislation giving effect to this decision is currently underway in conjunction with the Central Bank. It is envisaged that the legislation will also deal with the transposition of the EC Directives on Investment Services and Capital Adequacy, which set out certain regulatory and supervisory requirements in this area. Arrangements to conform with these requirements will have to be in operation by the end of 1995 at the latest.
Insurance services and insurance intermediaries are subject to the arrangements in the Insurance Act, 1989, and this is a matter for the Minister for Enterprise and Employment.
I am satisfied with the regulatory framework as it applies to my area of responsibility. Legislation will be introduced to improve supervision and to allow the Central Bank supervise the Stock Exchange and financial services intermediaries.