This is a Seanad Bill which has been amended by the Dáil. In accordance with Standing Order 113, it is deemed to have passed its First, Second and Third Stages in the Seanad and is placed on the Order Paper for Report Stage. On the question "That the Bill be received for final consideration", the Minister may explain the purpose of the amendments made by the Dáil. This is looked upon as the report of the Dáil amendments to the Seanad. The only matters, therefore, which may be discussed are the amendments made by the Dáil. For Senators' convenience, I have arranged for the printing and circulation of the amendments. Senators may speak only once on Report Stage.
Companies (Miscellaneous Provisions) Bill 2009 [Seanad Bill Amended by the Dáil]: Report and Final Stages.
Question proposed: "That the Bill be received for final consideration."
I am very pleased to be returning to this House with the Companies (Miscellaneous Provisions) Bill, as amended by the Dáil.
The Dáil amendments to this Bill are grouped into three thematic areas. Of the nine amendments made by the Dáil, six arise from the introduction of a new mechanism introduced to meet a recently identified business opportunity. This mechanism will allow collective investment funds, that are constituted as bodies corporate, to migrate their head offices into and out of Ireland without first having to wind up in their current jurisdictions. The amendments relative to this theme are Nos. 1, 2 and 6 to 9, inclusive.
As Senators will have observed, this first group of amendments is lengthy and results in over 12 pages of text being inserted into the Bill that the Seanad passed last month. I did not take the decision to propose such a long addition to the Bill lightly. However, as my colleague, the Minister of State at the Department of Enterprise, Trade and Employment, Deputy Conor Lenihan, remarked during the Second Stage debate on this Bill on 19 November, company law must respond dynamically and flexibly to opportunities and challenges arising from changes in our operating environment.
The mechanism introduced in this group of amendments is evidence of such responsiveness. It is this Government's response to a business opportunity that was brought to our attention recently by representatives of the Irish collective investment funds industry. The industry asserted that there is currently a short-term window of opportunity for Ireland to attract investment funds business from third countries if we amended our laws in the way provided for in these amendments.
The funds entities in question are seeking to relocate to well regulated jurisdictions. This would respond to investor concerns arising from the recent financial turmoil. The mechanism described in these amendments is the result of further consultations which were immediately undertaken with the industry representatives, the Financial Regulator and the Companies Registration Office. The mechanism has appropriate safeguards in place to protect Ireland's reputation as a well regulated fund management centre and the new mechanism is being restricted to funds whose activities will be or are regulated by the Financial Regulator.
In addition to meeting the short term window of opportunity identified by the funds industry I should, however, add that this mechanism will also have long term application and will add to the overall funds regulatory regime available in the State.
On the specific issues contained in each amendment within this group, amendment No. 7 is the substantive amendment and outlines in detail the mechanism which will apply to inward and outward migrating collective investment funds entities. It does this by amending section 3 and thereby inserting three new sections into the Companies Act 1990. The new section 256F describes in detail the arrangements that will apply to inward migrating funds, while the new section 256G outlines the situation for outward migrating funds. The third new section 256H outlines further requirements relating to statutory declarations touching on solvency that must be made by directors of both inward and outward migrating funds. Amendment No. 8 cross-applies this migratory mechanism to the UCITS regulations. This is being done on the basis that UCITS fund companies are also regulated by the Financial Regulator. The remaining amendments in this group are consequential on the two amendments I have just described. Amendment No. 6 is an amendment to the punctuation in the existing text of the Bill to facilitate the insertion of the new sections. Amendment No. 9 has the effect of providing that the funds migrating mechanisms will come into operation when commencement dates have been ordered by the Minister, while amendments Nos. 1 and 2 are adjustments to the Long Title of the Bill that are necessary to allow the migrating mechanism be cross-applied to UCITS constituted as companies.
I welcome the amendments. A number of my college friends work in financial institutions and fund management companies in London and they brought to my attention the window of opportunity for Ireland, especially in light of the taxation changes announced in the recent UK budget. Many leading financial institutions operating in the City of London are actively looking at three or four other possible locations for their activities. I know that Dublin is being actively considered. I assume these amendments are part of making Dublin a more attractive investment proposition for some of those institutions. For that reason I am glad the Government has introduced these amendments and I fully support them.
I add my words to those of Senator John Paul Phelan. There are dangers in Ireland responding too quickly to a need in case it damages our reputation. The steps taken by the Government are attractive but well balanced. It is important from the point of view of the international financial organisations that we do not damage in any way the good name we have established over the years. Other countries have risked their good name but I note the opportunities in the financial services area for large employers to come to Ireland. They will not come if there is a danger of our reputation being damaged. The balance achieved by the Minister of State is worthy of support.
I welcome the Minister of State back to the House to deal with this Bill which started its life in this House. I have consulted my colleague, Deputy Penrose, on the matters discussed yesterday. We do not have any issues with these provisions. I wish the Bill well and hope it is successful in dealing with the issues.
I welcome my colleague, the Minister of State, Deputy Billy Kelleher, and his departmental officials to the House. Like other speakers, I congratulate the Minister of State for these amendments. The mechanism being proposed will allow collective investment funds and will put in place the appropriate mechanism to accommodate business opportunities. This is the type of work people want to see Members doing in this House — being proactive and ensuring the appropriate mechanisms are in place to encourage investment opportunities in Ireland.
I thank Senators for their support of these amendments. In answer to Senators John Paul Phelan, Feargal Quinn, Brendan Ryan and Ivor Callely, international reputation is critical. There has been financial turmoil in the international markets for some time and some countries have suffered reputational damage. I say this everywhere I go and particularly in the Houses of the Oireachtas when speaking on this Bill. Ireland's reputation in the context of funds management administration and the financial services centre in general did not suffer reputational damage because there is good governance, oversight and regulation and this is critical. This group of amendments will facilitate fund managers to consider Ireland because of its strong reputation and allow them to migrate funds into Ireland. If a fund wishes to migrate to Ireland, it can also decide to move out. There must be this quid pro quo and balance in place. We are confident that when investment funds are on the lookout for well-regulated locations, Ireland will be seen as a key location because it is competitive and well regulated. Ireland is also situated within Greenwich Mean Time, which is critical, and is English speaking. Ireland can be seen as a link between the EU and the USA and is recognised internationally. We should be very proud of the Irish Financial Services Centre and its international reputation.
The Central Bank and the Financial Regulator, the Companies Registration Office and the Revenue Commissioners were involved in the discussions. We took advice from the key organisations. I assure Senators that these amendments will only enhance what is already a very positive industry in Ireland.
Group 2 deals with a true and fair view of profit and loss accounts, the subject matter of amendments Nos. 3 and 4.
The second area where amendments were made in the Dáil is for convenience referred to as the US GAAP part of the Bill. Two related amendments to this proposal were made on Committee Stage in the Dáil. These are contained in amendments Nos. 3 and 4 and refer to sections 1(3) and 2(2),respectively. Section 1 provides for the use of US GAAP by relevant parent undertakings while section 2 provides for the Minister to make regulations to designate for the use of specified categories of parent undertakings other internationally recognised standards. The latter situation would only arise where a justifiable case was made for this.
The text of both amendments are identical and in neither case is the meaning of the provision as originally drafted changed. The revised text has the effect of expressing more clearly than the original text that a true and fair view may be obtained both of the profit and loss accounts of the individual and group accounts through the use of the US GAAP provision at section 1(3) and by the use of the international accounting standards specified at section 2(2). This will add to the clarity of the text originally proposed, even though I am not sure if this speech has added to the clarity of the debate. I have tried my best.
Group 3 deals with publishing information and purchase of own shares and is the subject matter of amendment No. 5.
The final area where amendments were made by the Dáil related to the recognition for certain purposes of stock exchanges outside the State. Amendment No. 5 provides for the amendment of section 226A of the Companies Act 1990 which is being inserted by paragraph (g) of section 3 of this Bill. Section 226A outlines the information that is required to be published on the company website following the purchase by a company of its own shares on a recognised stock exchange outside the State.
As companies may make many purchases of own shares on a single day at different prices, this amendment will ensure the information provided on the company website is focused and avoids an unnecessary administrative burden on companies. The requirement to publish the price of shares purchased is being expanded to include an alternative option, which is that companies will be required to publish the highest and the lowest prices paid only. The requirement to publish the time of each purchase is being removed to avoid the necessity for a lengthy list of times. Only the date of the purchase will be required.
This amendment is to simplify arrangements. Some companies may buy their own shares from time to time, for instance, if there is a cash surplus. The purpose of the amendment is to provide clarity with regard to the publication of the purchases of shares. The highest and lowest share price must be published along with the date of purchase. The previous proposal was that they would have to outline the time but several transactions of shares at various prices and various times could be made in the one day. The lowest price and the highest price of the share transaction must be published on the day of the purchase, as opposed to the time of the purchase.
I indicated that I wanted to speak because I understand the challenge faced by the Minister of State in this respect. When this legislation was proposed I wondered how he would sort it out. As he has explained it so well, I do not need to touch on it. The highest price and the lower price of shares must be published on the date of purchase. If there were a number of purchases of a share on a day, the list of prices of that share would make it almost incomprehensible to read, but what is proposed, as the Minister of State has explained, is suitable and acceptable to the market.
Question put and agreed to.
Question proposed: "That the Bill do now pass."
I wish the Leas-Chathaoirleach a happy Christmas. I thank the Senators for their co-operation on the passage of this Bill. This debate and the debate on earlier Stages here and in the Dáil were positive. I am delighted there is broad consensual support for the Bill. It sends out a message of Ireland's standing in this respect, namely, that there were no divisions in the House in the process of ensuring that we have good regulation and oversight in the context of the funds industry, US GAAP and allowing companies to use those accounting principles as opposed to the Irish GAAP in the short term. That was critically important.
I thank Senators and wish them all a happy Christmas. I also extend those wishes to the staff and my officials, who have been working on the text of this Bill day and night during the past few weeks.
I take this opportunity to thank the Minister of State, Deputy Kelleher, and his officials who have been more than helpful to us during the debate on the passage of this and other Bills initiated in his Department during the year. I join my colleagues in wishing the Minister of State, his Department officials and everybody a very happy, holy and peaceful Christmas. I did not have an opportunity to do so earlier, but as other Senators did, I would like to convey such seasonal and festive good wishes to all of my colleagues and all the staff associated with the House.
I was going to say, "and so say all of us". I thank the Minister of State for his assistance. As I did not speak on the Order of Business, I want to wish everybody a happy Christmas. I hope the measure that has been introduced will ensure that 2010 will be a better year than 2009.
Hear, hear.
I had an opportunity to speak on the Order of Business and wished everybody a happy Christmas but I have not yet wished the Minister of State, Deputy Kelleher, a former Senator before he was demoted to the Lower House, a happy Christmas. I thank him and his team. This is an intricate Bill and progressing it must have taken a great deal of deep thinking. I congratulate him and his team on getting it through.
I wish to add my good wishes to those uttered by the previous Senators. I wish the Minister of State well with the Bill and I thank his Department officials for the work they put into it. When it was introduced here it was a short Bill, but following the addressing of issues that emerged during its passage through both House, it is now a much longer Bill. I wish the Minister of State every success with it. I wish the staff, colleagues and everybody the best for Christmas and the New Year.
I wish the Minister of State and his staff, the Cathaoirleach, all Members, the Whips and the staff a happy Christmas.
Question put and agreed to.