I move:
That Seanad Éireann approves the following Order in draft:
Trustee (Authorised Investments) Order, 1976, a copy of which Order in draft was laid before the House on 16 June, 1976.
Trustee (Authorised Investments) Order, 1976: Motion.
The Trustee (Authorised Investments) Act, 1958, defines the investments in which trustees may invest trust funds unless expressly forbidden by the instrument, if any, creating the trust. Equally, the trust deed may confer wider powers of investment but many trusts and analogous funds are restricted to the investments authorised under the Act.
The Minister for Finance may vary the authorised investments by order. The draft order before the House for approval would add Allied Irish Banks Limited Loan Stock 1985 to the list of trustee authorised investments. This stock was issued in 1975 to raise additional capital to provide for the future growth of the bank. It will be repayable at par on 1st August, 1985. In addition to interest at 10 per cent per annum, it carries the right to convert into shares of Allied Irish Banks Limited in any of the years 1977 to 1985. The shares of the bank were granted trustee status in 1969 by the Trustee (Authorised Investments) Order, 1969 (S.I. No. 241 of 1969). The new loan stock is quoted on the stock exchange and I am satisfied that it is suitable as regards both security and income for addition to the list of authorised trustee investments in this country.
The Minister for Finance is obliged under the Act to consult with the following persons in regard to the terms of any order he proposes to make to vary the list of authorised investments —a judge of the High Court nominated by the Chief Justice, the Governor of the Central Bank, the Public Trustee, the Chairman of the Irish Banks' Standing Committee, the President of the Incorporated Law Society of Ireland and the President of the Stock Exchange—Irish Unit. I have consulted these persons and they have raised no objections to the proposed order.
Under the Trustee (Authorised Investments) Act, 1958, "securities guaranteed as to capital and interest by the Minister for Finance" are included in the list of authorised trustee investments. The question has been raised in some quarters as to whether certain interest-bearing deposits which are guaranteed by the Minister for Finance come within the scope of this definition. In order to remove any doubt therefore I am advised that investment in interest-bearing deposit accounts with the Agricultural Credit Corporation Ltd. and with the Industrial Credit Company Ltd. should be specifically added to the authorised list. I propose to do so by means of this order.
As Senators may be aware, I have been considering some further widening of the investment power of trustees. In the case of building societies the new legislation provides the necessary framework and I intend as soon as possible to bring a draft order before the House for approval. My Department have been in consultation with the Irish Building Societies Association and I am happy to say that substantial agreement has been reached on the terms on which trustee status should be extended to the societies.
The other main area where change is indicated concerns banks authorised under section 1 of the 1958 Act to accept trust funds on deposit. That Act largely reflected the banking scene at the time but since then the number of banking institutions operating here and their resources have increased considerably. In addition, as a result of the 1971 Central Bank Act, there is now in force a comprehensive system of bank licensing and supervision conducted by the Central Bank. I am satisfied that in principle the list of banks should be widened and my Department are examining the matter with the Central Bank. I hope it will be possible to deal with the banks and the building societies together.
Meanwhile, I am satisfied that it is desirable that trustees should have power to invest trust funds in Allied Irish Banks Loan Stock 1985 and that it should be added to the list of authorised investments and also that interest-bearing deposits with the Agricultural Credit Corporation Ltd. and with the Industrial Credit Company Ltd. should be specifically added to that list. I commend the motion for the approval of the House.
I would like to refer briefly to this motion. I am totally in favour of it. It is a timely move to widen the category of security in which trustees can invest. The three specific categories that the Parliamentary Secretary has referred to—the Allied Irish Loan Stock 1985 and the Deposit Accounts of the ACC and the ICC—are secure, as secure as any investments in our national life can be. It also means that Allied Irish Banks, the Agricultural Credit Corporation and the Industrial Credit Company will receive larger sums on investment. This will allow all these three organisations to develop and to continue to play the very important part in our national life that we all know they currently play.
It may be slightly irrelevant but I am sure that——
If it is irrelevant the Senator should not utter it.
I may not be irrelevant. I think most Senators would like me to say a word of welcome to the Parliamentary Secretary, as an old boy of this House, on his first appearance here as Parliamentary Secretary.
I would like to be associated with the Senator's remarks and to welcome him here as Parliamentary Secretary. I fully support the motion he has introduced here today.
I should like to be associated with the welcome extended to the Parliamentary Secretary.
I would like to thank the Senators for welcoming me here today. I spent four years in this House as a Senator and naturally I am delighted to be back. With regard to the point made by Senator West, it is the intention behind the order that we would try to channel as much investment as possible into the ACC and the ICC.
Question put and agreed to.