This is a good section in that it obliges people to inform the bank at least once a year of the various level of shares, stocks, etc., held. We have gone through the process before of chasing companies through various other companies into other countries and jurisdictions and the difficulties with the interrelationships among holding companies, blind companies and other companies of other descriptions. Under this section information must be given to the stock exchange. Does this section impose that obligation on companies registered outside the country but which are connected back to the particular dealings involved? How far do the powers of the bank extend to seek out and be given information in that regard?
SECTION 48.
Question proposed: "That section 48 stand part of the Bill."
The exchange is required to make its best efforts to identify any indirect shareholders and to notify the bank of their names and addresses at least once a year. The obligation is to pursue all shareholders, direct and indirect, resident here or outside the jurisdiction. The exchange must make every effort possible to identify them and to have a full inventory of shareholders.
Does this improve the conditions that have pertained heretofore, namely what we witnessed in the Glackin report?
I do not think it improves procedures. That would be a matter for company law.
A company operating in a member state is obliged to report to the competent authority in its state. If companies operating here are using blind companies but registered in another member state, could a relationship exist between the two competent authorities to help each other to ferret out information? That would be an improvement on the situation heretofore.
It would in that there is a clear obligation specifically written into this Bill providing that at least once a year approved stock exchange authorised member firms must tell the bank not only the names of the persons having direct shareholdings or possessing qualifying shareholdings in them but also the size of the shareholding. Secondly, it must do its best to identify any direct or indirect shareholders and to notify the bank of their names and details at least once a year. They must go after all details about shareholders, indirect shareholders and the size of the shareholdings.
I accept that. However, does the competent authority in the other member state have an obligation to the competent authority here, the Central Bank, to assist in such an investigation? A competent authority in another state might be in a much stronger and fresher position to seek and obtain the information required. In that context it could be easier, than for it to be done from this jurisdiction.
The underlying spirit of the ISD is that there would be dialogue between the member countries with regard to who has a shareholding, who is operating within a specific jurisdiction and so on, so that there would not be evasions, escape hatches, or undesirable transactions. One of the ISD provisions is to have full co-operation between the competent authorities.
Is the Minister advising that this is a step forward and is he using the directive to say so?
It is important that competent authorities are being established in each jurisdiction and are given the powers and the obligations to undertake this kind of surveillance and investigatory work. This is an improvement, in that the Central Bank will operate at all levels.
Question put and agreed to.
Section 49 agreed to.