Irish Collective Asset-Management Vehicles Bill 2014: Committee Stage

I welcome the Minister of State at the Department of Finance, Deputy Simon Harris, and his officials. The purpose of the meeting is to consider the Irish Collective Asset-Management Vehicles Bill 2014, which was referred to the select sub-committee by Dáil Éireann on 9 October. We have this meeting room until 3 p.m. Therefore, I propose that we proceed as far as possible and, if necessary, resume consideration of the Bill at 5.30 p.m. in committee room 2. Is that agreed? Agreed.

Section 1 agreed to.
SECTION 2

I move amendment No. 1:

In page 10, between lines 9 and 10, to insert the following:

“ “Community act” means an act adopted by an institution of the European Union;”.

This amendment is technical and serves to define "Community act" as an act adopted by a European institution. It is necessary to facilitate the charges and debentures provisions to be added later by amendments Nos. 9 to 25, inclusive.

Amendment agreed to.

Amendments Nos. 2 and 5 are related and will be discussed together.

I move amendment No. 2:

In page 10, line 21, to delete “section 155 of the Companies Act 1963” and substitute “section 8 of the Companies Act 2014”.

Amendment No. 2 is technical and reflects the fact that the Companies Bill 2012 will be enacted imminently. The cross-reference to the definition of "holding company" will, in all likelihood, be out of date by the time this Bill is enacted. A "holding company" is defined in section 8(1) of the Companies Bill 2012 which states company A will be the holding company of company B where company B is the subsidiary of company A. This derives from section 155(4) of the Companies Act 1963. We expect the Companies Bill to be enacted this year; therefore, it seems prudent for us to update the Irish collective asset-management vehicle, ICAV, legislation to reflect this.

Amendment No. 5 includes a cross-reference to the definition of a holding company and is tabled for the same reason.

Amendment agreed to.

Amendments Nos. 3, 4 and 6 are related and may be discussed together.

I move amendment No. 3:

In page 10, between lines 32 and 33, to insert the following:

“ “officer”, in relation to an ICAV, includes a director or secretary;”.

This is a technical amendment to clarify the meaning of "officer" to include directors and secretaries of ICAVs and to define the register of ICAVs as the register kept by the banks under section 14 which concerns the registering of ICAVs.

Amendment agreed to.

I move amendment No. 4:

In page 10, between lines 35 and 36, to insert the following:

“ “register of ICAVs” means the register kept by the Bank under section 14;”.

Amendment agreed to.

I move amendment No. 5:

In page 11, line 12, to delete “section 155 of the Companies Act 1963” and substitute “section 7 of the Companies Act 2014”.

Amendment agreed to.
Section 2, as amended, agreed to.
Sections 3 to 13, inclusive, agreed to.
SECTION 14

I move amendment No. 6:

In page 16, between lines 17 and 18, to insert the following:

“(2) The Bank shall keep up-to-date the register referred to in subsection (1) so that it reflects any alterations in the instrument of incorporation, changes in the situation of the registered office or head office and changes in the persons who are directors or secretaries of the ICAV.”.

I did not read the speaking note on amendment No. 6, but I will read it in the interests of members and for the purposes of clarity.

Amendment No. 6 amends section 14 to set out some of the particulars that are to be recorded in the register of ICAVs including, where relevant, any changes in the instrument of incorporation, the location of the registered office, and the names of the directors and secretary.

Amendment agreed to.
Question proposed: "That section 14, as amended, stand part of the Bill."

On section 14, I wish to flag to the committee that I expect to bring forward amendments to this section on Report Stage to tidy up some oversights in the current draft. I expect to revert to this section on Report Stage.

Question put and agreed to.
Sections 15 and 16 agreed to.
SECTION 17
Question proposed: "That section 17 stand part of the Bill."

This is the section on authorisation.

This chapter enables the bank to authorise an ICAV which is not authorised under the UCITS regulations. A concern I expressed, which is my primary concern, is that this seems to be a mechanism to encourage activity in this area without appropriate regulation and that there is a lesser regulatory burden on these ICAVs than there might otherwise be. Given that it is lack of regulation in the area of financial speculation that landed us in the mess we are in, I would like to know the meaning of authorising things that are outside the UCITS regulations. I am not familiar with them but I presume those regulations are the more normal regulatory regime. Why are we authorising things and insulating them from the normal regulatory regime?

I thank the Deputy for his question. I have to be clear. We are not authorising things that are not already authorised in terms of UCITS, AIFs or the likes. We are putting a new vehicle in place for them to operate. Currently, there simply is not a well-fit vehicle for them to operate in. We already have a situation where there are similar such mechanisms as we are trying to put in place here in France, Luxembourg, the United Kingdom and a range of other European countries. We are trying to create an investment vehicle for funds in this country.

What we are doing, and I touched on it in section 8, relating to this specific section is that the ICAV will require authorisation from the Central Bank to carry on the business of an ICAV. It also limits the business to that permitted to be carried on under this Act and, where applicable, the alternative investment funds regulation or the UCITS regulations which govern activities on investment funds. In essence, every ICAV will need an authorisation to carry on business either as an alternative investment fund or as a UCITS under the UCITS regulation.

I will defend to the death against the idea that we are in any way dumbing down or reducing regulation. What we are trying to do is treat these as they should be treated and rather than involving the Companies Registration Office in something that is not a normal company, the Central Bank will take over the role. However, the actual level of scrutiny under the Central Bank remains, and the Deputy will see throughout the course of this Committee Stage that I am introducing a number of amendments that will further enhance regulation regarding accounting standards and so on that we will get to later.

On the section about which the Deputy has asked me specifically, every ICAV will need an authorisation either as an AIF or as a UCITS before it can conduct any investment activity. The UCITS regulations which are in place since 2011 already make provisions for such authorisations and a proposed amendment to the UCITS regulations contained in section 132 will enable an ICAV to apply to apply to be authorised as a UCITS. However, in respect of an AIF, it is necessary to provide for the authorisation of an ICAV as an AIF, and section 17 simply states that chapter 2 of Part 2 of the Bill provides for that authorisation procedure. In this section we are simply outlining the process that needs to be followed to be authorised as an ICAV.

To be authorised as an ICAV-----

-----because it does not have to go through the UCITS process.

It will either be a UCITS or an AIF, which are two different mechanisms.

It has to be one or the other.

It has to be one or the other, and this is simply outlining that if one is an AIF, one has not gone through the UCITS regulations. One needs to go through this process to be authorised as an ICAV.

I will flag my concern. I need to look into the UCITS regulations because one is flying blind in a situation like this one where one does not know how one compares with the other in terms of the level of regulatory burden and obligation. I am concerned, particularly when I look at some of the promotional material from KPMG, Ireland's first tailor-made corporate funds vehicle. Essentially, it was selling and promoting these ICAVs as mechanisms whereby one can avoid tax and have a lesser regulatory burden. I know that is not directly relevant to this discussion but my concern is that we are creating two different sets of rules. The perception KPMG seems to be putting across is that the rules here are less burdensome and that is much more favourable from the investors point of view. I want to express my concern about that.

It is more favourable from the investor's point of view but it does not impact negatively on the Irish taxpayer because it allows the investor, and I am sure this will arise later, to avail of the check-the-box rule in the United States which allows the investor to be taxed on an ongoing basis instead of deferring a tax and being taxed at a higher rate in the US afterwards. The big benefit for the investor is being able to avail of a US tax mechanism called check the box, which is a very transparent mechanism. It is in place in the US system and is something the US system could change at any time. In fairness to Deputy McGrath, he summed up the position very well on Second Stage when he said that this legislation is an attempt to catch up and keep up with our competitors, and that is what we are doing here. I genuinely do not believe that it in any way reduces regulation. It merely moves the administration of the vehicle from the Companies Registration Office to the Central Bank.

The Deputy is right. A number of organisations have promotional material but I am quite proud of that fact because I want to try to attract more corporate funds to this country and to do so we need a vehicle. I know we differ on that politically but that is the rationale behind the legislation.

Sections 18 to 30, inclusive, agreed to.

Question put and agreed to.
SECTION 31
Question proposed: "That section 31 stand part of the Bill."

I wish to flag to the committee that this is an area on which I may bring amendments on Report Stage. It concerns changes to the instrument of incorporation and I will revert to the committee on Report Stage.

Question put and agreed to.
Sections 32 to 49, inclusive, agreed to.
SECTION 50

Amendments Nos. 7 and 8 are related and may be discussed together by agreement.

I move amendment No. 7:

In page 31, line 10, after “inspection” to insert “by a person entitled to inspect it”.

Amendments Nos. 7 and 8 provide that the following persons are entitled to inspect the register of members of an Irish collective asset-management vehicle: the Central Bank, the Director of Corporate Enforcement and any statutory body which needs to inspect the register to properly exercise any of its functions.

Amendment agreed to.

I move amendment No. 8:

In page 31, between lines 21 and 22, to insert the following:

“(6) The persons entitled to inspect the register of members of an ICAV are—

(a) the Bank,

(b) the Director of Corporate Enforcement, and

(c) any statutory body which needs to inspect the register in order properly to exercise any of its functions.”.

Amendment agreed to.
Section 50, as amended, agreed to.
Sections 51 to 81, inclusive, agreed to.
SECTION 82
Question proposed: "That section 82 stand part of the Bill."

I may be bringing some technical amendments to this section on Report Stage.

Question put and agreed to.
Sections 83 to 85, inclusive, agreed to.
SECTION 86
Question proposed: "That section 86 stand part of the Bill."

Again, I am seeking advice from the Office of the Parliamentary Counsel on this section and may be bringing some technical amendments to it on Report Stage.

This section deals with the convening of extraordinary general meetings by members on ICAV. Is the Minister in a position to indicate what type of amendments he is considering?

We are not yet certain. I want to ensure this section is robust enough. It may require an amendment to section 86 or the insertion of a new section on charges and debentures.

Will it strengthen a shareholder’s right to call an extraordinary general meeting, as getting rid of the requirement to have an annual general meeting is quite a big step?

This section on the convening of extraordinary general meetings mirrors the section in company law. It is unlikely we will be making a substantive change to that. I may adopt a technical amendment to define the meaning of “special resolution” in section 86(7).

Question put and agreed to.
NEW SECTIONS

Amendments Nos. 9 to 20, inclusive, are related and may be discussed together by agreement.

I move amendment No. 9:

In page 55, between lines 7 and 8, to insert the following:

“PART 6

CHARGES AND DEBENTURES

CHAPTER 1

Interpretation

Definitions

87. (1) In this Part—

“charge”, in relation to an ICAV, means a mortgage or a charge, in an agreement (written or oral), that is created over an interest in any property of the ICAV (and in section 88(8) and sections 93 to 98 includes a judgment mortgage) but does not include a mortgage or a charge, in an agreement (written or oral), that is created over an interest in—

(a) cash,

(b) money credited to an account of a financial institution, or any other deposits,

(c) shares, bonds or debt instruments,

(d) units in collective investment undertakings or money market instruments, or

(e) claims and rights (such as dividends or interest) in respect of any thing referred to in any of the foregoing paragraphs;

“property”, in relation to an ICAV, includes any assets or undertaking of the ICAV.

(2) Any exclusion provided in subsection (1) to what is defined in that subsection as constituting a “charge” may be varied by order made by the Minister if the Minister considers that it is necessary or expedient to do so in consequence of any Community act adopted after the commencement of this section relating to financial collateral arrangements.

(3) For the avoidance of doubt, in the case of a mortgage or charge created over both—

(a) an interest in anything specified in any of paragraphs (a) to (e) of subsection (1),

and

(b) any property, assets or undertaking not falling within any of those paragraphs,

the mortgage or charge shall, other than to the extent to which it is created over an interest in anything specified in any of the foregoing paragraphs of subsection (1), be regarded as a charge within the meaning of this Part.”.

This is a new Part which mirrors provisions on charges and debentures for companies as set out in Part 7 of the Companies Bill 2012. The first amendment deals with charges and the second with debentures, Chapter 2. Both Parts reflect the established law on charges and debentures for investment companies. The Central Bank will maintain a register of charges in a manner similar to that of the Companies Registration Office in the 2012 Bill. The priority of charges will be determined in a similar manner to that provided for in company law. The register of charges will be available free of charge for inspection on a website maintained by the Central Bank.

Amendment No. 9 provides for the interpretation of certain terms in the new Part. The expression “charge”, which includes a mortgage under current law, is expressly stated not to include a mortgage or charge over an interest in cash, money credited to an account of a financial institution, or any other deposits, shares, bonds or debt instruments. This is in accordance with the exception of the registration requirement envisaged under the Collateral Directive, 2002/47/EC, on financial collateral arrangements.

Chapter 2 deals with the registration and priority of charges. Two separate procedures for the registration of charges are envisaged. The first, the one-stage procedure, is similar to the procedure under the current law, namely, that particulars of all charges created must be delivered to the Central Bank within 21 days of their creation. The second, the two-stage procedure, provides that an initial notice can be sent to the Central Bank stating the intention of the ICAV to create a charge, followed up by a further more detailed notification in 21 days of the creation of the charge stating that fact. Where the priority of charges is not governed by some other regimes, such priority will be determined by reference to the date of receipt by the Central Bank of the particulars of that charge.

Amendment No. 10, dealing with section 88, provides for the registration of charges created by ICAVs. The section drawn is from section 409 of the Companies Bill 2012 and originally from section 99 of the Companies Act 1963, as amended by section 122 of the Companies (Amendment) Act 1990. It provides that all charges created by an ICAV must be registered in accordance with this section. Subsections (3) and (4) detail the one-stage and two-stage procedures.

Amendment No. 11, dealing with section 89, derives from section 410 of the Companies Bill 2012 and provides for the duty of the ICAV to register charges under section 88 and the right of other parties to effect registration.

Amendment No. 12, dealing with section 90, reflects section 411 of the Companies Bill 2012 and deals with situations where an ICAV purchase property which is subject to a charge. Since this section only requires charges created by an ICAV to be registered, this section is necessary to ensure charges that were created by an individual but for which the liability for repayment is assumed by the ICAV are registered by that ICAV.

This ensures that the records of charges on an ICAV property will be more complete. Failure to comply with these requirements will be an offence.

Amendment No. 13 provides for a new section 91 which sets out the priority of charges. This section is modelled on section 413 of the Companies Bill 2012. Subsection (1) provides that priority be given to the creditor who files first in time in order to minimise the potential for fraudulent abuse and thereby protect creditors. This priority will be subject to any overriding priority applicable to certain assets under already established law. Subsection (2) clarifies that where several charges are registered on the same date, the charge that is registered earliest in time and on that date shall have priority. Subsection (3) clarifies the meaning of the date of receipt of the specified particulars in the context of two different procedures for registering charges. Subsection (4) provides that priority as to charges will also be subject to any contrary agreement between the creditors such as inter-lender or priority agreement, often entered into by financial institutions where more than one such institution lends to a particular ICAV. Subsection (5) provides that the Central Bank does not have to enter details of a negative pledge in the register of charges. Subsection (6) defines a negative pledge clause as an agreement not to borrow money from a third party or otherwise create another charge.

Amendment No. 14 provides for a new section 92 and concerns the registration and priority of judgment mortgages. Subsection (1) provides that a judgment converted into a judgment mortgage shall be void against the liquidator and any creditor of the ICAV unless the procedure for registration of a judgment mortgage in subsection (2) is followed.

Amendment No. 15 provides for a new section 93 which sets out detail on the register itself and is modelled on section 414 of the Companies Bill. The register will include details of the date of creation of a charge or the acquisition of a property and the date of receipt by the bank of the information and any other matters specified by the bank. The bank will determine the form of the register and make it available on a website for inspection by the public.

Amendment No. 16, setting out a new section 94, provides that a certificate of registration shall be given in respect of any charge registered under this Part. This provision is drawn from section 416 of the Companies Bill.

Amendment No. 17 sets out a new section 95 dealing with the entries of satisfaction and release of property from charge. It is modelled on section 417 of the 2012 Bill and requires a statement.

Amendment No. 18, providing for a new section 96, is based on section 418 of the Companies Bill and provides for an extension of time for registration of charges and rectification of the register. The section permits an application by the ICAV or an interested person to be made in court for late registration where there has been a failure to file the specified particulars of a charge within the 21 days where the omission was accidental or does not prejudice the interests of creditors or shareholders.

Amendment No. 19 proposes a new section 97 providing that copies of all instruments creating charges must be kept by the ICAV at the same place as the register of members. The section provides that it is an offence not to comply with this requirement. This mirrors the provision in section 418 of the Companies Bill.

Amendment No. 20, setting out a new section 98, provides that charges must still be registered notwithstanding the Netting of Financial Contracts Act 1995, which facilitates the use of swap instruments and provides that a mortgage or charge to secure a liability under a financial contract is legally enforceable against the charger.

As I outlined on Second Stage, the rationale for these provisions is the desirability of transposing the relevant provisions of the Companies Bill to the ICAV legislation. That is what I am attempting to do here by mirroring the most up-to-date Companies Bill, which we expect to be enacted by the end of the year.

The Minister of State has indicated that the amendments in this group mirror the provisions of the Companies Bill 2012. I have not had time to go back to that legislation and these amendments were only made available a couple of days ago. Are these provisions simply lifted from the 2012 Bill or are we seeing a reduction in the requirements as set out in the Companies Bill?

The provisions are effectively lifted from the Companies Bill. References to "company" are changed to "ICAV", while provisions relating to transitional arrangements in sections 419 and 420 of the 2012 Bill are omitted in this legislation because the ICAV does not currently exist and does not, therefore, require such arrangements. These amendments represent an effort to mirror the provisions of the Companies Bill, with some tweaks. There are no policy changes being enacted in this legislation in comparison with what is in the 2012 Bill.

I hereby give notice of the likelihood that I will have to bring forward a number of amendments on Report Stage in view of the amendment made by the Seanad to the Companies Bill on Committee Stage. The objective, as I said, is to ensure these provisions reflect the most up-to-date Companies Bill. There is a fleshing out here of some of the areas in respect of which Deputy Doherty expressed concerns, such as accounting standards and the like. This is not an effort to get away from the relevant parts of the Companies Bill. On the contrary, it makes sense to ensure they are mirrored in this legislation.

Amendment agreed to.

I move amendment No. 10:

In page 55, between lines 7 and 8, to insert the following:

"CHAPTER 2

Registration of charges and priority

Registration of charges created by ICAVs

88. (1) Every charge created by an ICAV shall be void against the liquidator and any creditor of the ICAV unless either the procedure set out in—

(a) subsection (3) (the "one-stage procedure"), or

(b) subsection (4) (the "two-stage procedure"),

with respect to the charge’s registration is complied with.

(2) If, in purported compliance with the requirements of this Part as to the taking of steps in that behalf, there is received by the Bank particulars of a charge that omit the required particulars in respect of one or more properties to which the charge relates, subsection (1) shall be read as operating to render void (as against the liquidator and any creditor of the ICAV) the charge as it relates to the particular property or properties in respect of which that omission occurs but not otherwise.

(3) The procedure for registration under this subsection referred to in subsection (1) as the one-stage procedure consists of the taking of steps so that there is received by the Bank, not later than 21 days after the date of the charge’s creation, particulars, in such form as may be specified by the Bank, of the charge.

(4) The procedure for registration under this subsection referred to in subsection (1) as the two-stage procedure consists of the following, namely the taking of steps—

(a) so that there is received by the Bank a notice stating the ICAV’s intention to create the charge (being a notice in such form and containing such particulars as may be specified by the Bank, of the charge), and

(b) so that, not later than 21 days after the date of the Bank’s receipt of the notice under paragraph (a) (the “first-mentioned notice”), there is received by the Bank a notice, in such form as may be specified by the Bank, stating that the charge referred to in the first-mentioned notice has been created.

(5) If the requirement under paragraph (b) of subsection (4) is not complied with, within the period specified in that paragraph, the notice received under paragraph (a) of that subsection in relation to the charge shall be removed by the Bank from the register.

(6) Subsection (1) is without prejudice to any contract or obligation for repayment of the money secured by the charge concerned and when a charge becomes void under that subsection, the money secured by it shall immediately become payable.

(7) Where a charge comprises property outside the State, such particulars, in such form as may be specified by the Bank, (and, as the case may be, the notice under subsection (4)(b)) may be sent for registration under this section, notwithstanding that further proceedings may be necessary to make the charge valid or effectual according to the law of the country in which the property is situate.

(8) If there is a change among the one or more persons entitled to a charge registered under this Part, the fact of that change having occurred, and particulars of the person or persons now entitled to the charge, may be delivered, in such form as may be specified by the Bank, to the Bank and registered by it.

(9) Nothing in this section or any other provision of this Part authorises the delivery to the Bank of a deed, or any supplemental document to it, and this Part does not impose or confer any duty or power on the Bank to examine any deed or any supplemental document to it.".

Amendment agreed to.

I move amendment No. 11:

In page 55, between lines 7 and 8, to insert the following:

"Duty of ICAV with respect to registration under section 88* and right of others to effect registration

89. (1) It shall be the duty of the ICAV that creates the charge to comply with the procedure under section 88(3) or (4) with respect to the charge's registration but this is without prejudice to subsection (2).

(2) Any person interested in the charge may use the procedure under section 88(3) or (4) with respect to its registration and the person's using that procedure (and in compliance with section 88(3) or (4)) shall have the same effect as if the ICAV had used that procedure (and in compliance with section 88(3) or (4)).

(3) Where such a person uses that procedure (and in compliance with section 88(3) or (4)), the person may recover from the ICAV the amount of fees properly paid by that person to the Bank in respect of the registration of the charge concerned.".

Amendment agreed to.

I move amendment No. 12:

In page 55, between lines 7 and 8, to insert the following:

"Duty of ICAV to register charges existing on property acquired

90. (1) Where an ICAV acquires any property which is subject to a charge that, if it had been created by the ICAV after the acquisition of the property, would have given rise to the duty under section 88(1) on the part of the ICAV with respect to the charge's registration, then the ICAV shall have the following duty.

(2) That duty is to take steps so that there is received by the Bank, not later than 21 days after the date on which acquisition of the property concerned is completed, such particulars of the charge, in such form, as may be specified by the Bank.

(3) If default is made in complying with this section, the ICAV and any officer of it who is in default commits a category 3 offence.".

Amendment agreed to.

I move amendment No. 13:

In page 55, between lines 7 and 8, to insert the following:

"Priority of charges

91. (1) Unless the priority of the charges is otherwise governed by an enactment (apart from this Act), the priority of charges created by an ICAV shall, subject to subsection (4), be determined by reference to the date of receipt by the Bank of the particulars specified by the Bank, that is to say, a charge particulars in respect of which such particulars as may be specified by the Bank are received by the Bank on a date that is earlier than that on which those in respect of another charge are received by the Bank shall have priority over that other charge.

(2) Where the date of receipt by the Bank of such particulars of several charges is the same, subsection (1) shall be read as operating to accord priority to the charge received earliest in time on the date concerned by the Bank and other references in this Part concerning priority by reference to the date of receipt shall be read and operate accordingly.

(3) References in subsection (1) to the date of receipt of such particulars as are specified by the Bank are references to—

(a) if the procedure under subsection (3) of section 88* is complied with in relation to a particular charge, the date of receipt by the Bank of such particulars of the charge, provided in such form, as may be specified by the Bank, or

(b) if the procedure under subsection (4) of section 88* is complied with in relation to a particular charge, the date of receipt by the Bank of the notice, in such form and containing such particulars as may be specified by the Bank, in relation to the charge under paragraph (a) of that subsection.

(4) Subsection (1) shall not affect any agreement between persons in whose favour charges have been created in relation to the priority that those charges shall, as between them, have.

(5) In relation to particulars of a charge received by the Bank pursuant to section 88(3) or (4), the following provisions apply so far as those particulars consist of particulars of a negative pledge—

(a) the Bank shall not be under a duty to enter in the register under section 93 particulars of the negative pledge pursuant to that section, and

(b) the fact that the Bank has received the particulars of the negative pledge shall have no legal effect,

but nothing in the foregoing affects the validity of the receipt by the Bank of the other particulars of the charge.

(6) In this section "negative pledge" means any agreement entered into by the ICAV concerned and any other person or persons that provides that the ICAV shall not, or shall not otherwise than in specified circumstances—

(a) borrow moneys or otherwise obtain credit from any person other than that person or those persons, or

(b) create or permit to subsist any charge, lien or other encumbrance or any pledge over the whole or any part of the property of the ICAV.".

Amendment agreed to.

I move amendment No. 14:

In page 55, between lines 7 and 8, to insert the following:

“Registration of judgment mortgages

92. (1) If judgment is recovered against an ICAV and that judgment is subsequently converted into a judgment mortgage affecting any property of the ICAV, the judgment mortgage shall be void against the liquidator and any creditor of the ICAV unless the procedure set out in subsection (2) with respect to the judgment mortgage’s registration is complied with.

(2) The procedure for registration under this subsection consists of the taking of steps so that there is received by the Bank, together with the relevant judgment mortgage document, such particulars of the judgment mortgage, in such form, as may be specified by the Bank, not later than 21 days after the following date.

(3) That date is the date on which notification by the Property Registration Authority of the judgment mortgage’s creation is received by the judgment creditor.

(4) In subsection (2) the "relevant judgment mortgage document" means a certified copy of, as appropriate—

(a) Form 60, 60A or 60B set out in the Schedule of Forms to the Land Registration Rules 2012 (S.I. No. 483 of 2012) as amended by the Land Registration Rules 2013 (S.I. No. 389 of 2013), or

(b) Form 16 set out in the Schedule to the Registration of Deeds (No. 2) Rules 2009 (S.I. No. 457 of 2009),

used for the purposes of converting the judgment concerned into a judgment mortgage.

(5) For the purposes of this section, it shall be presumed, until the contrary is proved, that the judgment creditor received notification, of the judgment mortgage’s creation, from the Property Registration Authority on the third day after the date on which that notification is sent by it to the judgment creditor or his or her agent.

(6) If rules are made under section 126 of the Registration of Title Act 1964 or, as the case may be, section 48 of the Registration of Deeds and Title Act 2006—

(a) replacing a form that is referred to in subsection (4)(a) or (b), as appropriate, the reference in that provision to the form shall be read as a reference to the form as so replaced, or

(b) amending a form that is so referred to, the reference in that provision to the form shall be read as a reference to the form as it stands so amended.".

Amendment agreed to.

I move amendment No. 15:

In page 55, between lines 7 and 8, to insert the following:

"Register of charges

93. (1) The Bank shall keep, in relation to each ICAV, a register of the charges requiring registration under this Part, and shall, on payment of the fee (if any) prescribed under section 32E of the Central Bank Act 1942, enter in the register, in relation to such charges, the following particulars:

(a) without prejudice to paragraphs (d) and (e), in the case of a charge created by the ICAV, the date of its creation and—

(i) where the procedure for registration under section 88(3) is complied with, the date and time of receipt by the Bank under that provision of such particulars of the charge, in such form, as is specified by the Bank, and

(ii) where the procedure for registration under section 88(4) is complied with, the respective dates and times of receipt by the Bank of the notices under paragraphs (a) and (b) of that provision in relation to the charge;

(b) without prejudice to paragraphs (d) and (e), in the case of a charge existing on property acquired by the ICAV, the date of the acquisition of the property by the ICAV;

(c) without prejudice to paragraphs (d) and (e), in the case of a judgment mortgage, the date of the mortgage’s creation and the date and time, in relation to it, of receipt by the Bank, under section 92(2), of the particulars specified by the Bank in such form as is so specified, together with the relevant judgment mortgage document referred to in that provision;

(d) short particulars of the property charged; and

(e) the persons entitled to the charge.

(2) The register referred to in subsection (1) shall be kept in such form as the Bank considers appropriate and shall be made available for inspection free of charge on a website maintained or used by the Bank.".

Amendment agreed to.

I move amendment No. 16:

In page 55, between lines 7 and 8, to insert the following:

“Certificate of registration

94. (1) The Bank shall give a certificate of the registration of any charge registered in pursuance of this Part.

(2) Subject to subsection (3), such a certificate shall be conclusive evidence that the requirements of this Part as to the registration of the charge have been complied with.

(3) To the extent that the particulars of a charge delivered to the Bank in purported compliance with this Part omit the required particulars in respect of one or more properties to which the charge relates, the evidential effect of the certificate provided under subsection (2) shall not extend to the particular property or properties in respect of which that omission occurs.

(4) Without prejudice to the generality of the definition, in section 87, of that expression, in subsection (3) "property" includes an interest in, or right over, property.".

Amendment agreed to.

I move amendment No. 17:

In page 55, between lines 7 and 8, to insert the following:

"Entries of satisfaction and release of property from charge

95. (1) The Bank may exercise the powers under subsection (2), on evidence being given to its satisfaction with respect to any charge registered under this Part—

(a) that the debt in relation to which the charge was created has been paid or satisfied in whole or in part, or

(b) that part of the property charged has been released from the charge or has ceased to form part of the ICAV’s property,

and, where the satisfaction or release has not been signed by or on behalf of the chargee, after giving notice to the person who, for the time being, stands registered as the person entitled to such charge or to the judgment creditor, as the case may be.

(2) Those powers are to enter on the register a memorandum—

(a) of satisfaction in whole or in part, or

(b) of the fact that part of the property has been released from the charge or has ceased to form part of the ICAV’s property,

as the case may be.

(3) Where the Bank enters such a memorandum of satisfaction in whole, it shall, if required, furnish the ICAV with a copy of it.

(4) The Bank may accept as evidence of a satisfaction or release referred to in subsection (1)(a) or (b) a statement in such form as may be specified by the Bank, signed by a director and secretary of the ICAV, or by 2 directors of the ICAV, stating that the satisfaction or release has occurred.

(5) Where a person signs a statement referred to in subsection (4) knowing it to be false, the person commits a category 2 offence.

(6) Where a person signs a statement referred to in subsection (4) and in doing so did not honestly believe on reasonable grounds that the statement was true, and the High Court considers that the making of that statement—

(a) contributed to the ICAV being unable to pay its debts,

(b) prevented or impeded the orderly winding-up of the ICAV, or

(c) facilitated the defrauding of the creditors of the ICAV,

the High Court, on the application of the liquidator or receiver of the property of, or any creditor or contributor of, the ICAV, may, if it thinks it proper to do so, make the following declaration.

(7) That declaration is that that signatory shall be personally liable, without limitation of liability, for all or such part as the High Court may specify of the debts and other liabilities of the ICAV.".

Amendment agreed to.

I move amendment No. 18:

In page 55, between lines 7 and 8, to insert the following:

"Extension of time for registration of charges and rectification of register

96. (1) The High Court may grant the following relief where it is satisfied that the omission to register a charge within the time required by this Part or that the omission or misstatement of any particular with respect to any such charge or in a memorandum of satisfaction—

(a) was accidental or due to inadvertence or to some other sufficient cause, or

(b) is not of a nature to prejudice the position of creditors or shareholders of the ICAV,

or that on other grounds it is just and equitable to grant that relief in respect of such an omission or misstatement.

(2) That relief is to order, on such terms and conditions as seem to the High Court just and expedient, that the time for registration shall be extended, or, as the case may be, that the omission or misstatement shall be rectified.

(3) An application for relief under this section may be made on behalf of the ICAV or any other person interested.".

Amendment agreed to.

I move amendment No. 19:

In page 55, between lines 7 and 8, to insert the following:

"Copies of instruments creating charges to be kept

97. (1) An ICAV shall keep a copy of every instrument creating any charge in relation to it and requiring registration under this Part, including, in the case of a judgment mortgage, a copy of the relevant judgment mortgage document that was received by the Bank.

(2) All such copies kept by the ICAV shall be kept at the same place.

(3) Such copies shall be kept at the same office as the register of members is kept and shall be open during business hours to the inspection of any member or creditor of the ICAV without charge.

(4) If default is made in complying with subsection (1) or (2), the ICAV concerned and any officer of it who is in default commits a category 3 offence.".

Amendment agreed to.

I move amendment No. 20:

In page 55, between lines 7 and 8, to insert the following:

"Netting of Financial Contracts Act 1995 not to affect registration requirements

98. Nothing in section 4(1) of the Netting of Financial Contracts Act 1995 affects—

(a) the requirement to register a charge under this Part, or

(b) the consequences of failing to register a charge under this Part.".

Amendment agreed to.

Amendments Nos. 21 to 25, inclusive, in the name of the Minister, are related and may be taken together.

I move amendment No. 21:

In page 55, between lines 7 and 8, to insert the following:

"CHAPTER 3

Provisions as to debentures

Liability of trustees for debenture holders

99. (1) Subject to the provisions of this section, the following provision shall be void, namely, any provision contained—

(a) in a trust deed for securing an issue of debentures, or

(b) in any contract with the holders of debentures secured by a trust deed,

in so far as it would have the effect of exempting a trustee of it from, or indemnifying him or her against, liability for breach of trust where he or she fails to show the degree of care and diligence required of him or her as trustee, having regard to the provisions of the trust deed conferring on him or her any powers, authorities or discretions.

(2) Subsection (1) shall not invalidate—

(a) any release otherwise validly given in respect of anything done or omitted to be done by a trustee before the giving of the release, or

(b) any provision enabling such a release to be given—

(i) on the agreement to the provision of a majority of not less than three-fourths in value of the debenture holders present and voting in person or, where proxies are permitted, by proxy at a meeting summoned for the purpose, and

(ii) either with respect to specific acts or omissions or on the trustee dying or ceasing to act.".

Amendments Nos. 21 to 24, inclusive, provide for a new Chapter 3 dealing with debentures. Again, these provisions substantially mirror those in the Companies Bill 2012. Amendment No. 21 introduces a new section 99 which concerns the liability of trustees for debenture holders. This section is drawn from section 423 of the Companies Bill. Many deeds under which trustees for debenture holders are appointed contain clauses which absolve the trustees from liability in circumstances other than wilful neglect or default. It is considered desirable that some checks should be placed upon the power of trustees to escape liability for failure to carry out functions for which they receive payment.

Amendment No. 22 provides for a new section 100 setting out provisions relating to perpetual debentures. This amendment derives from section 424 of the Companies Bill. That provision was first introduced to overcome certain doubts about the legality of perpetual debentures. A provision making a debenture irredeemable or postponing it to some distant date would amount to a clog on the equity of redemption, thereby rendering the instrument void.

Amendment No. 23, providing for a new section 101, mirrors section 425 of the 2012 Bill and gives the ICAV the power to reissue redeemed debentures. Under subsection (2), the person entitled to the debentures shall have the same priorities as if the debentures had never been redeemed. Subsection (3) deals with situations where debentures are deposited to secure advances on current accounts or otherwise.

Amendment No. 24 sets out a new section 102 which reflects the policy established in section 427 of the Companies Bill 2012 and, before that, section 97 of the Companies Act 1963. It provides explicitly that a specific performance may be a remedy for breach of a contract to take up and pay for any debentures.

Amendment No. 25 provides for a new Chapter 4 dealing with prohibition on registration of certain matters affecting shareholders or debenture holders. The new section 103 provides that the bank has no jurisdiction to accept or register an order of any authority affecting a shareholder or debenture holder of the ICAV or any notice of the making thereof. Again, this group of amendments mirrors the Companies Bill 2012, which is desirable in regard to the ICAV.

I will comment on amendment No. 21, relating to the liability of trustees for debenture holders. It exempts the trustee and indemnifies him or her against liability for breach of trust. I wish to tease out the second part of this, which states "where he or she fails to show the degree of care and diligence required of him or her as trustee". This goes to the core of what is white-collar crime. We are talking about funds domiciled in Ireland worth approximately €1 trillion, and people are investing that money in good faith. When that money is managed in a way that does not show a degree of care and diligence, it is extremely difficult to prosecute somebody under this legislation or have them held liable. It is extremely difficult to prove the degree of care and diligence required so has the Minister of State considered beefing up this section in the Bill to ensure there is further protection for those who have put trust in these trustees?

I take the point. The new companies Bill has not even been enacted but we have mirrored the same provisions from that legislation. I also take the broader policy point on white-collar crime and there is a series of offences in that regard throughout this Bill. I have referred to some of them already but, in this section, we have just mirrored what is in the Companies Bill 2012.

I understand that, and the Bill to which the Minister of State refers has not yet been implemented. We will have to deal with the section on its own merit. This is about exempting and indemnifying a trustee against liability, which could be quite large. What benchmark would have to be reached under this section to show that the trustee has failed in the degree of care and diligence required? It is okay to pass legislation with those words, which sound fine, but what are the benchmarks with the execution of this legislation? It may not be possible to be more specific as there could be a danger of allowing others who fulfil some but not all criteria to be indemnified. It is a catch-all reference and past experience has shown that it has been difficult, considering what has gone on in the banks, to identify legal breaches. It is clear that in many cases there has been no legal breach, although public opinion might suggest otherwise.

I take the point and I do not disagree with much of what has been said other than the fact that we are bringing legislation to the House. There are approximately 70 various proceedings that can be instigated by either the Central Bank or the Office of the Director of Corporate Enforcement. The issue is one of enforcement and there is significant regulation. There is the undertakings for collective investment in transferable securities, UCITS, regulation, for example. I am not pretending to bring additional measures but there is a list of various enforcement measures that can be taken by the bank in the instigation of proceedings for offences, as well as the Office of the Director of Corporate Enforcement. There are many references to them throughout the Bill.

I am open to hearing more from the Deputy about this on Report Stage but I am not necessarily sure how it can be further beefed up in this legislation. The issue is more about enforcement and for that we have the Central Bank, a regulator and the Office of the Director of Corporate Enforcement. We are not in any way letting any fund get away with less oversight than they now would if they operated under the Companies Bill, which will soon be enacted.

We define terms in legislation all the time and we are doing so again in this Bill. There is reference to "degree of care" and "diligence required" but there is no definition for either of those terms, apart from the fact that there must be "regard". The word "regard" could be debated by barristers in the Four Courts for a couple of sessions with respect to "trust deed conferring on him or her any powers, authorities or discretions". It seems from reading the section that the degree of care and diligence is defined by the trust deed conferring on him or her the powers but the section also refers to "having regard". Could the definition of degree of care or diligence required strengthen this legislation?

It is a minor element that goes through financial legislation all the time but in the past it may have appeared as if there has been a lack of due care or diligence in certain areas but the legislation may not be clear-cut. Other countries have more robust legislation but we do not seem to be as strong. The question seems to concern the definition of terms inserted, including "degree of care and diligence required" or "having regard to". I do not have any suggestions but it occurred to me when reading the section that it could need further scrutiny.

As the Deputy acknowledged, the issue is probably broader than just this legislation. As the Deputy recalls me saying on Second Stage, I am eager with this Bill to show that where the Companies Bill provisions are appropriate for the Irish collective asset management vehicle, ICAV, we are mirroring them in full. The ICAV has certain additional levels of safe checks in that there must be a depository to keep assets safe. With our regulatory structures in general, as I have seen in my new role with the Irish Financial Services Centre, etc., the regulations are - correctly - more robust than they have been. I am quite satisfied there has been a substantial body of work done there and at a European level. If the Deputy has thoughts on the issue, I would welcome them on Report Stage. I see what he is trying to do but I am trying to keep this legislation consistent with the Companies Bill.

Yes, and I agree with the Minister of State's point on the beefing up of regulatory provisions, which has happened in the past number of years. That is welcome. However, with human nature being what it is, regulators will identify problem areas and try to prevent them but they cannot stop them. They can help to prevent them. We are exempting a trustee from liability in law but we are using terms such as "degree of care" and "diligence required", which are not defined in legislation. It is a big issue as a regulator may try to prevent this happening; there are provisions whereby a party is not exempted if he or she is in breach of the degree of care or diligence required. There is no clear way to show how this could be the case so there will be cases where people could be in breach of their degree of care and diligence required and be able to avail of this section because we have not properly defined those terms.

I will try to bring clarity to the Deputy's point, which is fair and important. I am informed that those terms, particularly "duty of care", are defined in European law, particularly the UCITS directive and the accounting information system. I do not have the information to hand but it shows how these elements do not operate in isolation or a silo and although they will be overseen by the Central Bank rather that the Companies Registration Office, they are also subject to EU regulation. I am cognisant of the point, which is broader than this legislation.

Amendment agreed to.

I move amendment No. 22:

In page 55, between lines 7 and 8, to insert the following:

“Perpetual debentures

100. A condition contained in any debentures or in any deed for securing any debentures shall not be invalid by reason only that the debentures are by those means made irredeemable or redeemable only on the happening of a contingency however remote, or on the expiration of a period however long, notwithstanding any rule of law to the contrary.".

Amendment agreed to.

I move amendment No. 23:

In page 55, between lines 7 and 8, to insert the following:

“Power to re-issue redeemed debentures

101. (1) Where an ICAV has redeemed any debentures then—

(a) unless any provision to the contrary, whether express or implied, is contained in the instrument of incorporation of the ICAV or in any contract entered into by the ICAV, or

(b) unless the ICAV has, by passing a resolution to that effect or by some other act, shown its intention that the debentures shall be cancelled, the ICAV shall have power to re-issue the debentures either by re-issuing the same debentures or by issuing other debentures in their place.

(2) On a re-issue of redeemed debentures, the person entitled to the debentures shall have the same priorities as if the debentures had never been redeemed.

(3) Where an ICAV has deposited any of its debentures to secure advances from time to time on current account or otherwise, the debentures shall not be deemed to have been redeemed by reason only of the account of the ICAV having ceased to be in debit whilst the debentures have remained so deposited.”.

Amendment agreed to.

I move amendment No. 24:

In page 55, between lines 7 and 8, to insert the following:

“Specific performance of contracts to subscribe for debentures

102. A contract with an ICAV to take up and pay for any debentures of the ICAV may be enforced by an order for specific performance.”.

Amendment agreed to.

I move amendment No. 25:

In page 55, between lines 7 and 8, to insert the following:

“CHAPTER 4

Prohibition on registration of certain matters affecting shareholders

Registration against ICAV of certain matters prohibited

103. (1) Subject to subsection (3), the Bank has, in relation to any ICAV, no jurisdiction to accept receipt of, or to register in the register—

(a) an order of any authority (whether judicial or otherwise) affecting a shareholder of the ICAV, or

(b) any notice of the making thereof.

(2) Any jurisdiction of an authority (whether judicial or otherwise) subsisting before the commencement of this section to make an order requiring that there be registered in the register, or that there be received by the Bank—

(a) an order of that authority affecting a shareholder of an ICAV, or

(b) a notice of the making of an order referred to in paragraph (a), shall, after that commencement, cease to be exercisable.

(3) Nothing in this section affects the jurisdiction of any authority (whether judicial or otherwise) by virtue of section 132.”.

Amendment agreed to.
Sections 87 to 93, inclusive, agreed to.
SECTION 94

Amendments Nos. 26 to 29, inclusive, and 68 to 70, inclusive, are related and will be discussed together.

I move amendment No. 26:

In page 58, to delete lines 30 to 37, and in page 59, to delete line 1 and substitute the following:

“(c) the other information provided for in the Schedule.

(3) The annual accounts shall give a true and fair view of the assets, liabilities and financial position of the ICAV at the end of the financial year and of the profit or loss of the ICAV for the financial year.

(4) The annual accounts may be prepared in accordance with—

(a) generally accepted accounting practice in the State,

(b) international financial reporting standards, or

(c) subject to subsection (5), an alternative body of accounting standards.

(5) To the extent that the use of any alternative body of accounting standards does not contravene any provision of this Part, a true and fair view of the assets and liabilities, financial position and profit or loss of an ICAV may be given by the use by the ICAV of those standards in the preparation of its annual accounts.

(6) In this section “alternative body of accounting standards” means standards that”.

Changes in EU law mean that all ICAVs will eventually be subject to a requirement that the auditor must confirm that the accounts present a true and fair view. This is a more exacting and explicit requirement and provides more detailed rules than were provided for in the Bill as published. The manner in which the requirement can be imposed on ICAVs has been the subject of some consideration. Section 94 permits the preparation of annual accounts to Irish accounting standards, international financial reporting standards and US and Japanese standards and envisages the standards of other jurisdictions being available also. The effect of the amendment to section 94 will be to continue to allow for a range of accounting standards but only in so far as they are consistent with the true and fair standard. The Central Bank will also be able to impose its own requirements on the accounting standards of ICAVs; therefore, while information can be presented for the benefit of investors in an accounting standard that they are, perhaps, more used to in terms of business, this will be allowed only in so far as these standards are consistent with a true and fair view and, if the Central Bank so chooses, with additional requirements which it can also impose. I hope the proposed change will be welcomed as sending a signal that there will be no diminution of the overall regulatory standards for the ICAV. Deputy Pearse Doherty raised the issue of accounting standards on Second Stage and I hope he welcomes the measure.

Amendments Nos. 68 to 70, inclusive, simply correct typographical errors in the Schedule, setting out the form the accounts of an ICAV should take. In the first instance, what should read as “total assets” reads as “totals assets” and in the second, what should read “total liabilities” reads “total assets”. The possibility of working to a range of accounting standards will be attractive to fund managers as it will allow them to present their annual accounts in a manner which may be best understood by their particular investor base and overseas investors. In determining precisely in other jurisdictions what accounting standards are acceptable, the Minister for Finance may make regulations prescribing them. An amendment is included to require the Minister to consult the Central Bank and other relevant stakeholders before making such regulations and this is a common-sense precaution. There is an amendment to section 98 on the report of the auditor of accounts to require that the auditor give his or her opinion on whether the accounts meet the true and fair standard and have been properly prepared in accordance with the relevant financial reporting framework.

This group of amendments also provides for an offence of a director of an ICAV failing to comply with his or her duty to comply with the section and corrects an oversight in section 94 of the Bill, as initiated, in that regard. This is setting out to restrict the ability of anybody to circumvent the true and fair requirement. If we insert it in the legislation, we can be proud of it because we will be ahead of the curve. Although it has not yet been transposed or introduced, it is prudent and appropriate that we introduce it in our ICAV.

This is strengthening the legislation against possible problems in the transparency of accounts and clear, true and fair presentation of accounts. This improvement is welcome and I can see the logic of allowing for other accounting standards as long as they meet the criteria. It all seems reasonable enough. However, "true" and "fair" are vague terms. I assume there is more detail as to what they mean. Is there necessarily a relationship between including the words "true" and "fair" and the true and fair standard, which would be set down in a more detailed way? How do we marry them? Should the true and fair standard not be set down in a particular place or developed by a particular body? Is the European Union doing it?

It will become a requirement under EU law. It is included in the 1963 Companies Act. When we published the ICAV, we did not include the true and fair test because, up to this point, undertakings for collective investment in transferable securities, UCITS, and alternative investment funds, AIFs, about which we are talking in relation to ICAVs have had not had to meet it. While it has been applicable in the 1963 Companies Act for companies, we did not apply it to the ICAV because, up to this point, UCITS and AIFs have not had to apply it in this country.

The true and fair concept is defined as a general rule of conduct or principle - the belief that businesses and organisations shall, truthfully, fairly or accurately present information on their financial conditions and operating results. "True and fair" means that the financial statements are free from material misstatements and faithfully represent the financial performance and position of the entity. "True" suggests the financial statements are factually correct, have been prepared according to the applicable reporting framework and do not contain any material misstatement that may mislead users. Misstatement may result from material errors or omissions of transactions and balances in the financial statements. "Fair" implies that the financial statements present the information faithfully without any element of bias and reflect the economic substance of transactions, rather than just their legal form. It is not sufficient for directors or auditors to reach such conclusions solely because the financial statements are prepared in accordance with the applicable accounting standards. Auditors must consider whether the directors have fulfilled their responsibility in the preparation of true and fair financial statements when providing an audit opinion.

As Deputy Richard Boyd Barrett acknowledged, given that we are involved in global competition, it is desirable to allow the information to be presented in accordance with accounting standards that might be more familiar to investors. We do not want this to happen at the risk of the true and fair test. This is included in the 1963 Companies Act and coming down the tracks in European law and amendments to accounting and audit directives. Although there is no legal obligation on us to impose it in the ICAV Bill, taking into consideration the commentary of members on other Stages of the legislation, it is prudent and appropriate to include it.

That is reasonable enough. From where is the Minister of State taking the definition of "true and fair"? What are we assessing it against?

"True and fair" was originally a UK accounting term that has been interpreted by the courts system. While it is not defined in legislation, it is a generally recognised and well understood accounting term.

Let us say somebody challenges a set of accounts and he or she says they are not true and fair, that the company is hiding things behind categories or under certain headings, which can happen. What standing does this term have? I can imagine the company might state it thinks the accounts are true and fair.

Yes. Again, I am providing in this group of amendments a specific offence where a director of the ICAV fails to comply with the "true and fair" test. I know what the Deputy means but I do not believe it is as flippant as the directors simply saying: "Well, they are fair; they are true". These are well-established accounting practices and they have been-----

I will have to stop the Minister of State there. As it is now 3 p.m., we have concluded this part of our consideration of the Bill. We will suspend and will resume at 5.30 p.m. in committee room 2.

Sitting suspended at 3 p.m. and resumed at 5.30 p.m.
Amendment agreed to.

I move amendment No. 27:

In page 59, between lines 9 and 10, to insert the following:

“(5) Before making regulations under subsection (4), the Minister—

(a) shall consult with the Bank, and

(b) may consult any such other persons as he or she considers appropriate.”.

Amendment agreed to.

I move amendment No. 28:

In page 59, between lines 12 and 13, to insert the following:

“(6) The requirement for annual accounts prepared in accordance with International Financial Reporting Standards to present fairly the assets, liabilities, financial position, financial performance and cash flow of the ICAV at the end of the financial year is deemed to be equivalent to the true and fair view required to be given by subsection (3).

(7) If the directors of an ICAV fail to comply with subsection (1), (2) or (3) they commit a category 2 offence.”.

May I raise an issue to do with amendment No. 26? I would like clarification on how the Bill will read. Will section 6 become section 7? Will section 5 remain the same? Are we taking sections 3 and 4 into one section?

That is correct. The numbering will be readjusted automatically.

Will section 5 become section 7?

With regard to international reporting standards, which we deal with in amendment No. 28, how many such standards are out there? Are there only the international financial reporting standards, IFRS?

They are the only ones we are using in this legislation.

I am going back to amendment No. 26, but this is relevant to amendment No. 28. Am I correct in saying that section 4 refers to generally accepted accounting practice in the State plus international financial reporting standards - that between subsection (4)(a) and subsection (4)(b), the word "and" rather than "or" is implied? The requirement is to comply with paragraphs (a) and (b), or (a) and (c); is that correct?

It can be (a), (b) or (c), but whichever one is complied with, the accounts must also comply with the requirement to be true and fair.

I understand that. Let us forget about subsection (4)(c) to make it simpler. Are we saying there must be compliance with paragraph (a) or (b)? My reading is that the accounts should be required to be compliant with (a) and (b), so I am seeking clarification that it is (a) or (b), as the Minister of State is saying.

It is (a) or (b), but - I think the Deputy gets this point - with the belt-and-braces approach that both must comply with the true and fair provision. That is the change.

Yes, but why do we not have the word "or" between paragraphs (a) and (b)? There is a difference between accounting practices and financial standards, as dealt with in paragraph (a) versus paragraphs (b) and (c). My understanding is that we would be dealing with accountancy practices, as referred to in paragraph (a), plus one of the standards referred to in paragraphs (b) and (c).

I take the point. It is a matter of standard drafting practice, as opposed to a policy decision. We are achieving the same thing. Perhaps the Deputy can clarify what he would like me to do.

I suggest that we are not achieving the same thing. If companies are allowed to prepare their annual accounts in accordance with generally accepted accounting practices in the State, that does not require compliance with international financial reporting standards or an alternative body of accounting standards, as listed in the legislation. This allows companies to report accounts that are in compliance with neither the accounting standards listed in legislation nor the international standards, but only the accounting practices in the State, which are inferior to the standards that are in place internationally, whether in Canada, the United States, Japan or any other region.

That is not what we are trying to do. Companies can present accounts according to standard accounting practices under the rules in this country, in accordance with various international standards as outlined in the legislation, or according to an alternative body of accounting standards as listed in the legislation. I do not accept the point that the standards under subsection (4)(a) are inferior to the standards under subsections (4)(b) and (4)(c).

Subsection (4)(a) refers not to a standard but to a practice. A practice may change from time to time, whereas a standard is adopted by a governing body. International standards are governed by the IFRS, and there are the American standards, the UK standards and so on. A practice is very different from a standard. Practices evolve as time goes on.

I take the point the Deputy makes and I am willing to examine this before Report Stage. I am not conceding that I am convinced, however. The intention is not that the provision in subsection (4)(a) should be any less than the standards in subsections (4)(b) and (4)(c).

I assumed it was intended to set out some accounting practices and the use of those practices to align with standards.

The Minister of State referred earlier to the fact that the standards are talking to an international audience. The legislation allows companies to compile annual reports based on a number of standards. We have now suggested that they can do so according to accounting practices here, to international standards, to Canadian standards, to Japanese standards, to American standards or, possibly, to a number of other standards. Why do we not require them to present accounts to the Irish standards, which are the international standard anyway? We use the European standard. Why do we not ask companies to comply with one standard? Five different funds might be quite similar to each other but might present their accounts in five different formats.

I know where the Deputy is coming from. We need to provide flexibility to present the information in accordance with the format and practices in the country where most of the investment is made. What I am trying to do through the entire section which was not included in the Bill as published, based on concerns I heard people like the Deputy express, is to have an extra layer in place to ensure these standards meet the true and fair test. It is not something the country is obligated to do as yet under EU law; therefore, we are being proactive. If the Deputy wishes to table amendments on Report Stage, I will certainly look at them.

I welcome the inclusion of the true and fair test. It is an issue I have raised. Because we are giving legislative approval for the first time to these types of fund I am not convinced that we should allow flexibility to present the annual accounts for Irish domiciled funds in five ways, at a minimum; there may be others listed in secondary legislation. It is an issue in financial institutions, some of which have used UK or EU accounting practices and there have been conflicts and differences. There is an ongoing debate within the British jurisdiction on accounting standards and the issue is being investigated or the subject of hearings at Westminster. When establishing something new and because this will be the first time we will have this new model, why do we not use the term "international accounting standards"? We should try to be as tidy as possible. Perhaps it is an issue on which the Minister of State might be willing to come back on Report Stage.

I am open to having a discussion on this issue, as it is important to have flexibility. As discussed on Second Stage, we are introducing this system to catch up with our competitors. If we were to introduce a system that did not offer the same flexibility as our competitors, one wonders what would be the purpose in introducing it. The legislation also provides that the Central Bank can impose whatever set of standards and regulations it wants above and beyond it. Between the true and fair test, the Central Bank having the ability to add additional layers, requirements and standards and the issues we have raised in the amendments, we are looking at the issue in a comprehensive manner. It is, however, the Deputy's prerogative to table amendments on Report Stage. If he does, I will be willing to consider them and engage with him on them.

That is fine. I am not sure if I will table amendments. Accounting standards are like a different language.

We are allowing people in the State to present their accounts in a different language.

I argue, on the true and fair test, that we are now saying they will have to be translatable, if the Deputy knows what I mean, whereas up until this point, there have been different languages.

I agree with the Minister of State and welcome the amendment to the legislation. However, when we are looking at our regulatory body to oversee this issue, we should make it as simple as possible. I am open to being convinced in asking to have these funds apply international standards. The debate globally is moving towards the use of international standards. There is resistance to this from established practices in the United States and some of the larger countries. I would be interested in hearing from those who operate this type of plc system whether complying with international standards is onerous. I cannot see how it is. It will, however, make the job of interpreting much simpler with the fair amendment tabled by the Government. We may come back to the issue on Report Stage.

On that question, it is my understanding most international companies are moving to one set of financial accounting standards.

I am informed by my officials that we are all moving towards international financial reporting standards. Even EU requirements have not gone as far as we have in this legislation in which we are pushing further ahead than others, even at a European level. How far one wishes to push ahead is the subject of a debate we can have on Report Stage.

Because banks used different standards in the past they were able not to disclose all of their losses. Making it flexible for them, even with the amendment, will allow funds to pick and choose the standards that benefit them. We should not do this. There is a risk in that regard to investors. There may not be a risk to the State as such, but there is a risk to financial institutions located in the State that invest in these funds. It has happened in the past. I have been involved in a long debate with the European Union, the Minister for Jobs, Enterprise and Innovation and the Minister for Finance on accounting standards which allow the banks not to disclose losses. It was completely legal, however, because they had chosen to use a certain standard over another. I wanted to raise a red flag for the Minister of State and it is welcome that we are going further than the European Union. Unless there is a substantial reason such as it would scare off these funds, we should apply a uniform set of standards.

I reckon I will not convince the Deputy this evening, but I am willing to look at the issue before Report Stage. I strongly believe that after these amendments are included, we will produce a vehicle that will meet the highest standards internationally in the presentation of true and fair accounts. I appreciate that the Deputy has welcomed this, but I will certainly look at the issue before Report Stage and, perhaps, the Deputy might do the same.

Amendment agreed to.
Section 94, as amended, agreed to.
Sections 95 to 97, inclusive, agreed to.
SECTION 98

I move amendment No. 29:

In page 63, between lines 18 and 19, to insert the following:

"(2) The auditors' report shall state clearly the statutory auditors' opinion as to-

(a) whether the annual accounts give a true and fair view -

(i) in the case of a balance sheet, of the assets, liabilities and financial position of the ICAV at the end of the financial year,

(ii) in the case of a profit and loss account, of the profit or loss of the ICAV for the financial year,

and

(b) whether the annual accounts have been properly prepared in accordance with the relevant financial reporting framework.".

Amendment agreed to.
Section 98, as amended, agreed to.
Sections 99 and 100 agreed to.
SECTION 101

Amendments Nos. 30 and 31 are related and may be discussed together.

I move amendment No. 30:

In line 64, lines 35 to 41, to delete all words from and including "No" in line 35 down to and including line 41 and substitute the following:

"No person other than an approved statutory auditor or audit firm under Part 4 of the Audits Regulations shall be eligible for appointment as auditor of an ICAV.".

Company law permits the audit of company accounts to be a public audit within the meaning of subsection (1) or (1A) of section 187 of the Companies Act 1990 which sets out primarily the class of persons who may audit friendly societies and industrial and provident societies. A feature of company law is that public auditors may also be qualified to audit company accounts. In crafting section 101 similar language was used, but on reflection I believe it is more appropriate that it only be statutory auditors or firms within the meaning of Part 4 of the audit regulations. In any case, ICAVs can only operate as UCITS and IAFs which already have to meet this requirement; therefore, the removal of the reference to public auditor in this case is purely a technical exercise to tidy up the text. The amendment to section 103 is consequential to the amendment to section 101. It is the straightforward and prudent thing to do and was overlooked in the original location.

Is section 101(1)(a), (b) and (c) being deleted and replaced by the amendment?

Sections 101(1)(a) and (b) are being deleted.

Amendment agreed to.
Section 101, as amended, agreed to.
Section 102 agreed to.
SECTION 103

I move amendment No. 31:

In page 65, line 33, after "person" to insert "eligible for appointment as auditor under section 101".

Amendment agreed to.
Question proposed: "That section 103, as amended, stand part of the Bill."

On the appointment of auditors, the legislation provides that an ICAV "shall, at each annual general meeting appoint an auditor or auditors to hold office". How does this provision interact with the provision that ICAVs are not required to hold an annual general meeting?

I will address this issue on Report Stage because it is one I have been considering. I want to be sure the Bill robustly allows auditors to flag potential concerns they may have. While I stand over the Bill in terms of its provisions on annual general meetings, I wish to ensure that if an auditor wishes to flag an issue to members, he or she will not be required to resign to allow motions to be moved before he or she can do so. This issue will arise at various stages of our discussion and I will refer to it when we debate a number of other amendments. I wish to address the issue on Report Stage to ensure the voice of the auditor is heard.

Subsection (4) provides: "On the date on which the holding of an annual general meeting is dispensed with in accordance with section 84(4), any auditor or auditors appointed in accordance with subsection (2) or (3) cease to hold office and the directors shall immediately reappoint the auditor or auditors or appoint a new auditor or auditors". The provisions on auditors are very much in line with company law as this probably reflects the best practice available to us. I acknowledge Deputy Pearse Doherty's point which he also made on Second Stage that, under the Bill, it is not necessary to hold an annual general meeting. We must ensure mechanisms are available to auditors who wish to raise concerns. I will examine this issue before Report Stage.

The practice in these types of fund which are public limited companies is that nobody turns up for annual general meetings. These are large funds and cannot be compared to a local credit union. This should not, however, weaken the position of the auditor or his or her ability to flag issues, as the Minister of State pointed out. While I welcome the provision allowing shareholders to call an extraordinary AGM, the provision that AGMs are not necessary sticks in one's craw because annual general meetings are forums in which information is imparted and so forth. While I am aware that we are chasing Luxembourg on this issue and I have flagged the need to introduce legislation to change the position that obtains in another jurisdiction, how is the issue of annual general meetings addressed in other jurisdictions? I welcome the Minister of State's statement that he may table an amendment on the issue on Report Stage because this is a key aspect of the Bill.

The Deputy likes to remind me that this legislation is chasing Luxembourg, while I like to remind him that it is not confined to Luxembourg because many of our competitors, including the United Kingdom and France, have similar vehicles in place. I do not have the information the Deputy seeks to hand, but I will examine the matter before Report Stage. The Deputy has correctly noted that no one turns up for the annual general meetings of these types of vehicle because they are not companies in the sense companies are understood in the Companies Acts.

I do not want to have legislation in place that in any way weakens the voice of the auditor. We must learn from the mistakes of the past. I have an open mind on whether the Bill does this and there are some areas I wish to tease out. Given that an extraordinary general meeting cannot be called if the persons seeking such a meeting collectively hold less than 10% of the voting rights in the ICAV, one must ask if an auditor will have an opportunity to address investors. I will consider this matter before Report Stage and would welcome the Deputy's submissions, views or amendments on it.

That is fine. The Minister of State has cited subsection (4) which refers to a decision to dispense with the holding of an annual general meeting. If an AGM does not take place, how does one deal with the issue of appointing auditors?

That matter is addressed in subsection (5) which states: "The directors of any ICAV which does not hold annual general meetings shall appoint the auditor or auditors".

How does that subsection interact with subsection (6) which provides that the Central Bank may appoint an auditor where none is appointed by the ICAV? Where subsection (5) provides that the directors may appoint an auditor in the event that subsection (4) is not fulfilled, subsection (6) provides that the Central Bank may appoint the auditors in the event that subsection (4) is not fulfilled. If that is the case, in what circumstances could the provisions of subsection (5) come into play?

My understanding is that where an annual general meeting is not held, it falls to the directors of an ICAV to appoint an auditor. Should the directors fail to appoint an auditor, it then falls to the Central Bank to appoint an auditor, subject to the same conditions in terms of eligibility.

The Minister of State should excuse me if I am wrong. Subsection (6) reads: "Where, in any case, no auditors are appointed as required by subsection (4), the Bank may appoint a person to fill the vacancy". Should it not read as follows: "Where, in any case, no auditors are appointed as required by subsection (5), the Bank may appoint a person to fill the vacancy"?

I see what the Deputy means. Subsection (4) provides that the directors shall immediately reappoint the auditor or auditors or appoint a new auditor or auditors. Subsection (6) has been linked with subsection (4) for this reason, although one could validly argue that it could be linked with subsection (5). My reading of subsection (6) is that if the directors of an ICAV do not immediately reappoint auditors or appoint new auditors, it will fall to the bank to appoint a person or person to fill the vacancy.

Does subsection (4) not apply in the event that an annual general meeting is dispensed with? Subsection (4) only deals with cases where an AGM is dispensed with and provides that in such circumstances "any auditor or auditors appointed in accordance with subsection (2) or (3) cease to hold office and the directors shall immediately reappoint the auditor or auditors or appoint a new auditor or auditors". This is fine, but it applies to cases where an AGM takes place, whereas subsection (5) applies to circumstances where an AGM does not take place, in which case the directors are empowered to appoint an auditor or auditors.

I will examine the issue because the Deputy has a point. Subsection (6) could be read with reference to subsection (4) or (5). This is a technical issue which we will address.

Question put and agreed to.
Section 104 agreed to.
SECTION 105

I move amendment No. 32:

In page 66, to delete lines 6 to 8 and substitute the following:

"partnership constituted under the law of any country under which a partnership is a legal person.".

This is a technical amendment to tidy up section 105 so as to remove a superfluous paragraph and replace it with a clearer drafting to include the words, "the law of any country". Subsection (5) permits a partnership properly constituted under the law of the State or the law of another state to act as an auditor of the ICAV. It is not necessary to separately list Irish law and the laws of other jurisdictions. The proposed change results in a simpler and clearer text.

Amendment agreed to.
Section 105, as amended, agreed to.
SECTION 106
Question proposed: "That section 106 stand part of the Bill."

The section refers to category 2 offences. What are these offences?

Section 130(2) states:

A person guilty of an offence under this Act that is stated to be a category 2 offence is liable—

(a) on summary conviction, to a class A fine or imprisonment for a term not exceeding 12 months, or to both, or

(b) on conviction on indictment, to a fine not exceeding €50,000 or imprisonment for a term not exceeding 5 years, or to both.

Question put and agreed to.
SECTION 107
Question proposed: "That section 107 stand part of the Bill."

I wish to flag that I may table amendments on Report Stage to address how the voice of an auditor can be heard if an annual general meeting is not held.

Question put and agreed to.
Sections 108 and 109 agreed to.
SECTION 110
Question proposed: "That section 110 stand part of the Bill."

In regard to the resolution, can I take it that is related to the AGM?

Yes. It ties in with our earlier conversation

Question put and agreed to.
Sections 111 to 117, inclusive, agreed to.
SECTION 118

Amendments Nos. 33 to 37, inclusive, are related and may be discussed together.

I move amendment No. 33:

In page 71, lines 28 and 29, to delete all words from and including “An” in line 28 down to and including line 29 and substitute the following:

“An investment company or a UCITS constituted as a company with fixed capital or variable capital in accordance with Regulation 4(6)(b) or (c) of the UCITS Regulations may apply to the Bank to be registered as an ICAV by way of continuation.”

Section 118 is subject to a small number of amendments to correct oversights in the section as initiated. Amendment No. 33 clarifies that UCITS, which are companies that are not investment companies under Part 14 of the Companies Act 1963, soon to be Part 4 of the Companies Act 2014, that is, UCITS plcs are also eligible to convert to the ICAV form by way of continuation. It should be noted that there was no intention to exclude such companies when formulating this provision and the amendment corrects that oversight. While we envisaged this easy conversion process for AIF and UCIT company funds, funds which are not constituted as companies will have to undergo a different process to become ICAVs.

Other small changes in these amendments include devolving to the Central Bank the power to determine day-to-day policy considerations such as the form of application for a conversion and the manner in which the certificate of incorporation provided to the Central Bank should be certified. The Central Bank is better placed than the Minister for Finance to determine these matters and in this instance it is not appropriate to follow the precedent set out in company law. It is a different arrangement in terms of the Companies Registration Office.

The amendment to subsection (3)(f) is straightforward in that it merely clarifies that when setting out charges for security interests related to the conversion company, the company should also identify the priority of charges. This is something we addressed earlier in our debate on the Bill. This amendment is simple in form and effect but it rectifies an error in the original text.

Amendment agreed to.

I move amendment No. 34:

In page 71, line 30, to delete “the form prescribed by regulations made by the Minister” and substitute “such form as may be specified by the Bank”.

Amendment agreed to.

I move amendment No. 35:

In page 71, line 34, to delete “the manner prescribed by regulations made by the Minister” and substitute “such manner as may be specified by the Bank”.

Amendment agreed to.

I move amendment No. 36:

In page 72, line 23, after “company” to insert “showing their priority which shall be as it would be were it to remain a company”.

Amendment agreed to.

I move amendment No. 37:

In page 72, lines 27 and 28, to delete “the form prescribed by regulations made by the Minister” and substitute “such form as may be specified by the Bank”.

Amendment agreed to.
Section 118, as amended, agreed to.
Section 119 agreed to.
SECTION 120
Question proposed: "That section 120 stand part of the Bill"

It is likely that I will bring forward amendments on Report Stage in regard to the role and powers of the Companies Registration Office. A basic issue we have to consider is how one removes a company from the CRO register and how that works in terms of the powers and functions of the CRO.

Question put and agreed to.
Section 121 agreed to.
SECTION 122

Amendments Nos. 38 to 40, inclusive, are related and may be discussed together.

I move amendment No. 38:

In page 74, lines 23 and 24, to delete “send by ordinary post a registered letter stating that” and substitute “give notice to the ICAV that”.

It is proposed to amend section 122 to remove the requirement that notice by the bank to an ICAV be delivered by registered post. Section 136 already sets out the general policy that the bank should be able to give notice by electronic means, and this change is consistent with the policy. In the interests of efficiency, the Central Bank already employs electronic means to communicate with funds and fund service providers and in a sophisticated industry this approach is very sensible.

Amendment agreed to.

I move amendment No. 39:

In page 74, line 28, to delete “sending of the letter” and substitute “giving of the notice”.

Amendment agreed to.

I move amendment No. 40:

In page 74, line 33, after “ICAV,” to insert “revoke the relevant authorisation of the ICAV and”.

Amendment agreed to.
Question proposed: "That section 122, as amended, stand part of the Bill."

We are moving from registered post to e-mail in all legislation but the consequences for somebody who does not read the e-mail should be considered. I recognise that something would have happened prior to that but the consequences for the fund could be drastic. It is not a case of changing from post to e-mail or forms being submitted electronically instead of in writing. Registered post offers proof that an individual has received the letter but there is no means of proving that an individual received an e-mail. I am flagging this issue in light of the drastic consequences of being struck off the register.

The amendment removes the requirement that notice be given by registered post but it does not require that it be sent by e-mail or other electronic means. As this is already the practice in terms of how the Central Bank interacts with the fund industry, it was felt that the requirement for registered post was at odds with what it is already doing.

Question put and agreed to.
NEW SECTIONS

Amendments Nos. 41 to 48, inclusive, are related and may be discussed together.

I move amendment No. 41:

In page 74, after line 35, to insert the following:

“PART 8

MIGRATION

CHAPTER 1

Migration-in to become ICAV

Definitions

123. (1) In this Chapter -

“migrating body” means a body corporate which is established and registered under the laws of a relevant jurisdiction and which is a collective investment undertaking;

"registration documents” has the meaning given by section 124.

“relevant jurisdiction”, in relation to a migrating body, means the place, outside the State, prescribed under subsection (2) where the migrating body is established and registered at the time of its application under section 125.

(2) The Minister may make regulations prescribing places, outside the State, for the purposes of the definition of “relevant jurisdiction” in subsection (1) where he or she is satisfied that the law of the place concerned makes provision for migrating bodies to continue under the laws of the State or for Irish collective asset-management vehicles to continue under the laws of that place in a substantially similar manner to continuations under section 125.

Sections 127 and 128 of the Bill as published cross apply the provisions of the Companies Acts to ICAVs concerning the moving of corporate entities in other jurisdictions to Ireland to establish as ICAVs, and the necessary corollary of ICAVs deregistering in Ireland to establish as corporate structures in other jurisdictions. The Minister for Finance has decided to set out these provisions via Committee Stage amendments. These sections will be replaced by a new Part which mirrors the provisions on migrations for investment companies as set out in Part 24, Chapter 9 of the Companies Bill 2012, taking into account the specific nature of ICAVs. The Part will facilitate the inward migration of investment funds from designated jurisdictions and provides for their continuation in Ireland as ICAVs. It will also facilitate the outward migration of ICAVs to designated jurisdictions and provides for their continuation there. Section 123 is the definition section and defines the terms "migrating body" and "relevant jurisdiction" for the purpose of this chapter. Due to its expansive nature, the definition of registration documents will be contained in a stand-alone section. These definitions are similar to those in section 1403 of the Companies Bill 2012. It is also provided that the Minister may by regulation prescribe places outside the State as a relevant jurisdiction in certain circumstances.

Section 124 gives a definition for registration documents, which is currently found in section 1403 of the Companies Bill 2011, and derives from section 256(f)(i) of the Companies Act 1990. This section sets out the technical documentary requirements with which a migrating body must comply before it can be registered as an ICAV and authorised by the Central Bank.

Section 125 sets out the principal elements of the migration process, and copies section 1405 of the 2012 Bill, derived from replicate sections 256(f)(i)-(x) of the Companies Act 1990. This section permits collective investment fund corporates registered in prescribed jurisdictions to apply to migrate their registered offices to Ireland without having to wind up their existing jurisdiction first. Migrating bodies may apply to the bank to be registered as an ICAV in the State by way of continuation.

Section 126 contains further practical requirements in respect of the registration of migrating companies in the State.

The key point is that the authorisation to carry on business as an AIF or a UCIT is automatic upon acceptance of an application to migrate. It also provides that if an applicant fails to comply with the requirements of section 125, the bank will give it 30 days to remedy this failure and its failure to do so may result in the bank starting proceedings to strike it off from the register of ICAVs.

Section 127 provides house definitions for the purpose of the provisions on deregistration of investment companies incorporated in the State that may wish to migrate to other relevant jurisdictions. Again, this section mirrors section 1402 of the Companies Bill 2012.

Section 128 contains the detailed provisions relating to the deregistration of ICAVs who wish to continue as bodies corporate in prescribed jurisdictions. These provisions reflect section 1403 of the 2012 Bill. Before granting deregistration, the bank must be satisfied that all requirements of this Bill in regard to deregistration have been complied with by the ICAV and that all fees and levies due to the bank have been paid. The application to deregister must be accompanied by a statutory declaration stating that these requirements have been met and notice of the application must be published in Iris Oifigiúil. Creditors of the ICAV or holders of not less than 5% of its issued share capital may apply for an order preventing the proposed migration and deregistration of the ICAV.

Section 129 contains further provisions in regard to the deregistration of an investment company under this chapter and they replicate section 1404 of the 2012 Bill. Section 130 is based on section 1405 of the 2012 Bill. It states that where an application is made by a migrating ICAV to be registered in the State, or by a company seeking to migrate out of the State, a director of the ICAV must make a statutory declaration that the entity is solvent. Subsection (2) sets out the requirements in regard to the making of the declaration, which must include a statement as to the assets and liabilities of the ICAV. In addition, the declaration must be accompanied by a report of an independent person giving an opinion as to the reasonableness of the opinion of the director and the statement of the assets and liabilities. Again, it will be an offence for the director to make a declaration under this section if he or she does not have reasonable grounds for believing that the ICAV can pay its debts as they fall due.

As with other provisions in this legislation and other amendments we are bringing forward today, the decision has been taken that it makes sense to expressly state the provisions that appear in various Companies Acts and the Companies Bill, rather than just cross-referencing.

I have no problems with the amendments. We are dealing with quite technical matters, and we can all acknowledge this is quite technical and an area we do not interact with in our daily lives. We are on page 75 of the legislation that was passed on Second Stage and there are five pages left, yet we have 22 pages of amendments. These amendments are not like the amendments we dealt with earlier, which sought to delete words or technical details, but, instead, are supplanting entire sections and chapters of the legislation. I have no problem with that and I understand where the Minister of State is coming from in regard to the Companies Bill, as it stands.

The problem I have concerns a request I have made before and which I hope will find more favourable ears this time. It makes it very difficult for Opposition and perhaps some Government Deputies when we get amendments reasonably late in the day which do not only amend the legislation but basically add another 50% to it in areas that were not looked at in the original legislation, would not have been dealt with on the heads of the Bill or on Second Stage, and which were not flagged. The point I am making is simple. I understand that the officials might be under pressure. However, when the legislation is published, we get an explanatory memorandum with notes for each section, up to a certain point. To have further explanatory notes at this stage would make it a lot easier for us in considering how the legislation interacts with company law and all the rest, given we are dealing not just with this but with the deadline for finance committee amendments at 11 a.m. tomorrow. While we can deal with the shorter amendments that change a word or a line, when we are changing the entire Bill or adding to it, even if that is to make it more robust, I suggest that, if possible, we would have a note to help explain this. It is about ensuring the company law provisions are dealt with properly. Speaking for myself, it would make my life a lot easier and we might be able to get through this more quickly.

That is a good idea. We provided a briefing on ICAV before Second Stage, which was useful, but we did not do it before Committee Stage. I take the point and I know time was tight. I am more than happy to make my speaking notes available to the Deputy now, in advance of Report Stage, which should help him if he wants to apply a further level of scrutiny. Going forward, I have no difficulty with that, nor do my officials, and it is something we can certainly do, particularly on technical Bills like this. The Deputy can take it as a given that I am supportive of what he has said. In this particular case, however, I would argue we are not substantially trying to change the Bill. It might sound like that when we are reading out pages and pages, but rather than just relying on a cross-reference with the Companies Acts, the legal advice has been that it is better to actually spell it out in the legislation. The actual thrust of what we are trying to do has changed very little, I would contend, but I take the point.

I agree with the Minister of State that it is just a matter of ensuring what is in company law is also in this Bill. The problem for ourselves, when we get this number of amendments coming in late in the day, is that the first thing we ask ourselves is where the Department is coming up with this and why it is coming in like this. It is not clear. When we are informed, it is then our job to figure it out and the penny finally drops that this is just about ensuring it is more robust and making sure that what is in the companies legislation is transposed into this Bill. However, a little note of the type I have suggested would have saved myself and our office a lot of time, and would have helped us give better scrutiny of the Bill.

I am happy to facilitate that. It leads to better scrutiny and better legislation, so it is not a problem.

Amendment agreed to.

I move amendment No. 42:

In page 74, after line 35, to insert the following:

“Registration documents

124. (1) In this Chapter “registration documents”, in relation to a migrating body, means the following documents:

(a) a copy, certified and authenticated in such manner as may be specified by the Bank, of the certificate of registration or equivalent certificate or document issued with respect to the migrating body under the laws of the relevant jurisdiction;

(b) a copy, certified and authenticated in such manner as may be specified by the Bank, of the instrument of incorporation, or memorandum and articles, of the migrating body or equivalent constitutive document of the migrating body;

(c) a list setting out particulars in relation to the directors and secretary of the migrating body in accordance with the provisions of section 11;

(d) a statutory declaration of a director of the migrating body made, in such manner and form as may be specified by the Bank, not more than 28 days before the date on which an application is made to the Bank under section 125 to the effect that?—

(i) the migrating body is, as of the date of the declaration, established and registered in the relevant jurisdiction, no petition or other similar proceeding to wind up or liquidate the migrating body has been notified to it and remains outstanding in any place, and no order has been notified to the migrating body or resolution adopted to wind up or liquidate the migrating body in any place,

(ii) the appointment of a receiver, liquidator or other similar person has not been notified to the migrating body and, at the date of the declaration, no such person is acting in that capacity in any place with respect to the migrating body or its property or any part of its property,

(iii) the migrating body is not, at the date of the declaration, operating or carrying on business under any scheme, order, compromise or other similar arrangement entered into or made by the migrating body with creditors in any place,

(iv) at the date of the declaration the migrating body has served notice of the proposed registration on the creditors of the migrating body,

(v) any consent or approval to the proposed registration in the State required by any contract entered into or undertaking given by the migrating body has been obtained or waived, and

(vi) the registration is permitted by and has been approved in accordance with the instrument of incorporation, or memorandum and articles, or equivalent constitutive document of the migrating body;

(e) a declaration of solvency prepared in accordance with Chapter 3;

(f) a schedule of the charges or security interests created or granted by the migrating body that would, if such charges or security interests had been created or granted by an ICAV, have been registerable under Part 6 and the particulars of such charges and interests as are specified in relation to charges by that Part;

(g) notification of the proposed name of the migrating body if different from its existing name;

(h) a copy of the instrument of incorporation which the migrating body has resolved to adopt, which shall be in the Irish language or the English language, which shall take effect on registration under section 125 and which the migrating body undertakes not to amend before registration without the prior authorisation of the Bank.

(2) If the original of any of the documents referred to in subsection (1) is not written in the Irish language or the English language, then “registration documents” in so far as that expression relates to such a document, means a translation of the document into the Irish language or the English language certified as being a correct translation of it by a person who is competent to so certify.”.

Amendment agreed to.

I move amendment No. 43:

In page 74, after line 35, to insert the following:

“Continuation of migrating body

125. (1) A migrating body may apply to the Bank to be registered as an ICAV in the State by way of continuation.

(2) Where an application is made under subsection (1), the Bank shall not register the migrating body as an ICAV in the State unless it is satisfied that all of the requirements of this Act in respect of the registration and of matters precedent and incidental to the registration have been complied with and, in particular, but without prejudice to the generality of the foregoing, the Bank is satisfied that?—

(a) the migrating body has delivered to the Bank an application for the purpose, in such manner and form as may be specified by the Bank and signed by a director of the migrating body, together with the registration documents,

(b) the name or, if relevant, the proposed new name of the migrating body is not, in the opinion of the Bank undesirable or misleading,

(c) the migrating body has delivered to the Bank notice of the address of its proposed registered office in the State, and

(d) the migrating body has applied to the Bank for a relevant authorisation and the Bank has notified the migrating body that it proposes to grant the relevant authorisation.

(3) An application under subsection (1) shall be accompanied by a statutory declaration, in such form as may be specified by the Bank, made by a solicitor engaged for this purpose by the migrating body, or by a director of the migrating body, and stating that the requirements mentioned in subsection (2) have been complied with, and the Bank may accept such a declaration as sufficient evidence of compliance.

(4) The Bank shall, as soon as is practicable after receipt of the application for registration, publish notice of it in the Iris Oifigiúil.

(5) Where the Bank notified the migrating body as mentioned in subsection (2)(d) the Bank shall issue a registration order in relation to the migrating body by way of continuation of the migrating body as an ICAV under the laws of the State and, if it issues a registration order shall enter in the register of ICAVs the details of charges and securities interests of the migrating body.

(6) The migrating body shall, as soon as may be after being registered under subsection (5), apply to be de-registered in the relevant jurisdiction.

(7) The Bank shall enter in the register of ICAVs the date of registration of the migrating ICAV and shall forthwith publish notice in the Iris Oifigiúil of the following matters:

(a) the date of the registration of the migrating body under this section;

(b) the relevant jurisdiction;

(c) the previous name of the migrating body if different from the name under which it is being registered as an ICAV.

(8) From the date of registration, the migrating body shall be deemed to be an ICAV formed and registered under this Act and shall continue for all purposes under this Act, and the provisions of this Act shall apply to the migrating body, but this section does not operate?—

(a) to create a new legal entity,

(b) to prejudice or affect the identity or continuity of the migrating body as previously established and registered under the laws of the relevant jurisdiction for the period that the migrating body was established and registered in the relevant jurisdiction,

(c) to affect any contract made, resolution passed or any other act or thing done in relation to the migrating body during the period that the migrating body was so established and registered,

(d) to affect the rights, authorities, functions and liabilities or obligations of the migrating body or any other person, or

(e) to render defective any legal proceedings by or against the migrating body.

(9) Without prejudice to the generality of subsection (8)?—

(a) the failure of a migrating body to send to the Bank the particulars of a charge or security interest created before the date of registration shall not prejudice any rights which any person in whose favour the charge was made or security interest created may have under it, and

(b) any legal proceedings that could have been continued or commenced by or against the migrating body before its registration under this section may, notwithstanding the registration, be continued or commenced by or against the migrating body after registration.”.

Amendment agreed to.

I move amendment No. 44:

In page 74, after line 35, to insert the following:

“Supplementary provision in relation to section 125

126. (1) The migrating body shall notify the Bank, within 3 days after the date of its de-registration in the relevant jurisdiction, of that de-registration in such manner and form as may be specified by the Bank.

(2) On registration of the migrating body under section 125(5) the Bank shall forthwith authorise the migrating body to carry on business.

(3) If there is any material change in any of the information contained in the statutory declaration mentioned in paragraph (d) of the definition of “registration documents” in section 124(1) after the date of the declaration and before the date of the registration under section 125, the director who made that statutory declaration, and any other director who becomes aware of that material change, shall forthwith deliver a new statutory declaration to the Bank relating to the change.

(4) If the migrating body fails to comply with any provision of section 125 or this section, the Bank may give notice to the ICAV that, unless it rectifies the failure within 30 days after the date of the letter and confirms that it has rectified the failure, a notice may be published in the Iris Oifigiúil with a view to striking it off the register of ICAVs.

(5) If the failure mentioned in subsection (4) is not rectified within 30 days after the date of the giving of the notice referred to in that subsection, the Bank may publish in the Iris Oifigiúil a notice stating that, at the expiration of 1 month after the date of that notice, the migrating body will, unless the matter is resolved, be struck off the register of ICAVs, and the migrating body will be dissolved.

(6) At the expiration of the time mentioned in the notice the Bank may, unless cause to the contrary is shown by the migrating body, revoke the relevant authorisation of the migrating body and strike the migrating body off the register of ICAVs and shall publish notice thereof in the Iris Oifigiúil, and, on that publication, the migrating body shall be dissolved.

(7) For the purposes of this section section 136 shall apply as if reference in it to Chapter 1 of Part 9 included a reference to this section and, accordingly, the other provisions of Chapter 2 of that Part shall apply with any necessary modifications.”.

Amendment agreed to.

I move amendment No. 45:

In page 74, after line 35, to insert the following:

“Chapter 2

De-registration following migration out

Definitions

127. (1) In this Chapter?—

“applicant” means an ICAV that applies under section 128 to be de-registered under section 129;

“relevant jurisdiction”, in relation to an ICAV, means the place, outside the State, prescribed under subsection (2) in which the ICAV proposes to be registered;

“transfer documents”, in relation to an applicant, means the following documents:

(a) a statutory declaration, in such form as may be specified by the Bank, of a director of the applicant made not more than 28 days before the date on which the application is made to the Bank to the effect that?—

(i) the applicant will, upon registration, continue as a body corporate under the laws of the relevant jurisdiction,

(ii) no petition or other similar proceeding to wind up or liquidate the applicant has been notified to the applicant and remains outstanding in any place, and no order has been notified to the applicant or resolution adopted to wind up or liquidate the applicant in any place,

(iii) the appointment of a receiver, liquidator or other similar person has not been notified to the applicant and, at the date of the declaration, no such person is acting in that capacity in any place with respect to the applicant or its property or any part of its property,

(iv) the applicant is not, at the date of the declaration, operating or carrying on business under any scheme, order, compromise or other similar arrangement entered into or made by the applicant with creditors in any place,

(v) the application for de-registration is not intended to defraud persons who are, at the date of the declaration, creditors of the applicant,

(vi) any consent or approval to the proposed de-registration required by any contract entered into or undertaking given by the applicant has been obtained or waived, and

(vii) the de-registration is permitted by the instrument of incorporation of the applicant;

(b) a declaration of solvency prepared in accordance with the provisions of Chapter 3;

(c) a copy of a special resolution of the applicant that approves the proposed de-registration and the transfer of the applicant to the relevant jurisdiction.

(2) The Minister may make regulations prescribing places, outside the State, for the purposes of the definition of “relevant jurisdiction” in subsection (1), where he or she is satisfied that the law of the place concerned makes provision for bodies corporate that are substantially similar to applicants under section 128 to continue under the laws of the State in a substantially similar manner to continuations under section 125 or for Irish collective asset-management vehicles to continue under the laws of that place.”.

Amendment agreed to.

I move amendment No. 46:

In page 74, after line 35, to insert the following:

“De-registration of ICAVs when continued under law of place outside the State

128. (1) An ICAV which proposes to be registered in a relevant jurisdiction by way of continuation as a body corporate may apply to the Bank to be de-registered in the State.

(2) Where an application is made under subsection (1), the Bank shall not de-register the applicant as an ICAV in the State unless it is satisfied that all of the requirements of this Act in respect of the de-registration and of matters precedent and incidental to de-registration have been complied with and, in particular, but without prejudice to the generality of the foregoing, it is satisfied that?—

(a) the applicant has delivered to the Bank an application for the purpose, in such form as may be specified by the Bank and signed by a director of the applicant, together with the transfer documents;

(b) the applicant has paid any levies or fees prescribed under section 32D or 32E of the Central Bank Act 1942 which are due,

(c) the applicant complies with any conditions that the Central Bank may impose on the applicant, and

(d) the applicant has delivered to the Bank notice of any proposed change in its name and of its proposed registered office or agent for service of process in the relevant jurisdiction.

(3) An application under this section shall be accompanied by a statutory declaration, in such form as may be specified by the Bank, made by a solicitor engaged for this purpose by the applicant, or by a director of the applicant, and stating that the requirements mentioned in subsection (2) have been complied with, and the Bank may accept such a declaration as sufficient evidence of compliance.

(4) The Bank shall, as soon as is practicable after receipt of the application for de-registration, publish notice of it in the Iris Oifigiúil.

(5) Where an application is made under subsection (1) a person mentioned in subsection (6) may apply to the High Court, on notice to the applicant, the Bank and all creditors of the applicant, not later than 60 days after the date of the publication of the notice under subsection (4), for an order preventing the proposal or passage of a resolution specified in paragraph (c) of the definition of “transfer documents” in section 127(1) from taking effect in relation to the application, and the High Court may, subject to subsection (9) make such an order accordingly.

(6) The following persons may apply for an order under subsection (5):

(a) the holders of not less than 5 per cent of the issued share capital of the applicant and who have not voted in favour of the resolution; or

(b) any creditor of the applicant.

(7) Notice of an application for an order under subsection (5) may be given to the creditors concerned by publication in at least one national newspaper in the State.

(8) The Bank and the applicant shall each be entitled to appear and be heard on an application under subsection (5).

(9) The court may make an order under this section only if it is satisfied that?—

(a) the proposed de-registration of the applicant would contravene the terms of an agreement or arrangement between the applicant and any shareholder or creditor of the applicant, or

(b) the proposed de-registration would be materially prejudicial to any shareholder or creditor of the applicant and the interests of shareholders and creditors or both taken as a whole would be materially prejudiced.

(10) An order made under subsection (5) shall specify the period in respect of which it shall remain in force.

(11) An order of the court under subsection (5) is final and conclusive and not appealable.”.

Amendment agreed to.

I move amendment No. 47:

In page 74, after line 35, to insert the following:

“Provisions supplementary to section 128

129. (1) Unless the High Court orders otherwise, when one or more than one application is made under section 128(5), a resolution specified in paragraph (c) of the definition of “transfer documents” in section 127(1) in relation to an ICAV shall not take effect until?—

(a) where the application or all the applications to the High Court are withdrawn?—

(i) the day on which the resolution is passed,

(ii) the day next following the day on which the last outstanding application is withdrawn, or

(iii) the 31st day following the publication of the notice on the creditors under section 128(7),

whichever is the latest, and

(b) where all applications to the High Court are not withdrawn?—

(i) the day on which the resolution is passed,

(ii) the day specified in the order or, if no date is specified in the order, the day next following the day on which the period for which the order is specified to remain in force expires or otherwise ceases to be in force, or

(iii) the day next following the decision of the High Court,

whichever is the latest.

(2) When the applicant is registered as a body corporate under the laws of the relevant jurisdiction, it shall give notice, in such form as may be specified by the Bank, to the Bank of that fact within 3 days after the date of its becoming so registered, including its new name (if any), and as soon as practicable after receiving that notice, the Bank shall revoke the applicant’s relevant authorisation and issue a certificate of de-registration of the applicant.

(3) The Bank shall enter in the register of ICAVs the date of the de-registration of the applicant and shall, within 7 days of the date of issue of the certificate under subsection (2), publish in the Iris Oifigiúil notice of the following matters:

(a) the date of the de-registration of the applicant under this section;

(b) the relevant jurisdiction;

(c) the new name of the applicant if different from the name under which it was registered as an ICAV.

(4) From the date of registration of the applicant in the relevant jurisdiction, it shall cease to be an ICAV for all purposes of this Act and shall continue for all purposes as a body corporate under the laws of the relevant jurisdiction, but this section does not operate?—

(a) to create a new legal entity,

(b) to prejudice or affect the identity or continuity of the applicant as previously constituted under the laws of the State for the period that the applicant was so constituted,

(c) to affect any contract made, resolution passed or any other act or thing done in relation to the applicant during the period that the applicant was constituted under the laws of the State,

(d) to affect the rights, authorities, functions and liabilities or obligations of the applicant or any other person, or

(e) to render defective any legal proceedings by or against the applicant.

(5) Without prejudice to the generality of subsection (2) any legal proceedings that could have been continued or commenced by or against the applicant before its de-registration under this Chapter may, notwithstanding the de-registration, be continued or commenced by or against the applicant after registration in the relevant jurisdiction.”.

Amendment agreed to.

I move amendment No. 48:

In page 74, after line 35, to insert the following:

“Chapter 3

Declaration of solvency

Statutory declaration as to solvency

130. (1) Where an application is made under Chapter 1 or 2 a director of the migrating body or ICAV making the application shall make a statutory declaration, in such form as may be specified by the Bank, stating that he or she has made a full inquiry into its affairs and has formed the opinion that the migrating body or ICAV is able to pay its debts as they fall due.

(2) A declaration under subsection (1) shall have no effect for the purposes of this Chapter unless?—

(a) it is made not more than 28 days before the date on which the application is made to the Bank,

(b) it contains a statement of the migrating body’s or ICAV’s assets and liabilities as at the latest practicable date before the date of the making of the declaration and in any event at a date not more than 3 months before the date of that making, and

(c) a report made by an independent person under subsection (3) is attached to the declaration, along with a statement by the independent person that he or she has given and has not withdrawn consent to the making of the declaration with the report attached to it.

(3) The report mentioned in subsection (2)(c) shall state whether, in the independent person’s opinion, based on the information and explanations given to him or her, the opinion of the director mentioned in subsection (1) and the statement of the migrating ICAV’s or applicant’s assets and liabilities referred to in subsection (2)(b), are reasonable.

(4) For the purposes of subsection (3), the independent person shall be a person who, at the time the report is made, is?—

(a) in the case of an application under Chapter 1, qualified to be the auditor of the migrating body under the laws of the relevant jurisdiction, and

(b) in the case of an application under Chapter 2 qualified to be the auditor of the ICAV.

(5) A director who makes a declaration under this section without having reasonable grounds for the opinion that the migrating body or ICAV is able to pay its debts as they fall due commits a category 2 offence.

(6) Where the migrating body or ICAV is wound up within 1 year after the date on which the application is made to the Bank and its debts are not paid or provided for in full within that year, it shall be presumed, unless the contrary is shown, that the director did not have reasonable grounds for his or her opinion.”.

Amendment agreed to.
SECTION 123
Question proposed: "That section 123 stand part of the Bill".

I should just flag the point that I may need to bring some technical amendments to section 123 in regard to the cross-application of receivership from the Companies Act to make sure the Act operates effectively.

Question put and agreed to.
SECTION 124
Question proposed: "That section 124 stand part of the Bill".

There is the same provision for section 124 in terms of the crossover.

Question put and agreed to.
NEW SECTIONS

Amendments Nos. 49 to 59, inclusive, are related and may be discussed together. Acceptance of amendment No. 49 involves the deletion of section 125 of the Bill.

I move amendment No. 49:

In page 75, between lines 20 and 21, to insert the following:

“PART 9

Strike Off and Restoration

Chapter 1

Strike off of ICAV

When Bank may strike ICAV off register

125. (1) Except in the case of an application by an ICAV to be struck off the register of ICAVs, the Bank may strike an ICAV off the register of ICAVs if?—

(a) the ICAV is not an authorised ICAV,

(b) there exists one or more of the grounds for striking off set out in section 126, and

(c) the Bank has followed the procedure set out in sections 127, 128, 130 and 133(1).

(2) In the case of an application by an ICAV to be struck off the register of ICAVs, the Bank may strike the ICAV off the register of ICAVs if?—

(a) the ICAV is not an authorised ICAV,

(b) the conditions for striking off set out in section 131 have been satisfied, and

(c) the Bank has followed the procedure set out in sections 132 and 133(2).”.

Section 125 of the ICAV Bill, as published, cross-supplied the provisions of the Companies Act to ICAVs. However, on advice, the Minister for Finance has decided to set out the provisions in extenso via Committee Stage amendments. Section 125 will be replaced by a new part which mirrors the provisions on strike-off and restoration for companies as set out in Part 12, Chapters 1 and 2, of the Companies Bill 2012. This new part sets out the circumstances in which an ICAV may be struck from the register and the second group of amendments, which we will get to shortly, deals with the procedures for restoration. It contains provisions concerning both voluntary and involuntary strike-off of an ICAV. In the case of involuntary strike-off, an ICAV may take a remedial step in order to avert the strike-off process. The concept of voluntary strike-off is being placed on a statutory footing with certain conditions being established before the process can commence.

Amendment No. 49 permits either the Central Bank or the ICAV to be struck off the register of ICAVS where it is not an authorised ICAV and the conditions governing voluntary and involuntary strike-offs as set out in subsequent provisions have been fulfilled. This new section is similar to a new provision being introduced by section 726 of the Companies Bill 2012 in respect of the striking-off of companies. Subsection 1 provides that the Central Bank may strike an unauthorised ICAV from the register of ICAVs where one of the grounds for strike-off listed in section 126 exists and the Central Bank has followed the procedure set out in sections 127, 128, 130 and 133(1). Subsection 2 provides that an unauthorised ICAV may apply to be struck off the register of ICAVs where the condition for a voluntary strike-off, pursuant to section 131, has been fulfilled and the Central Bank has followed the requisite procedures set out in sections 132 and 133(2).

Amendment No. 50 provides the grounds upon which an ICAV may be involuntarily struck off the register of ICAVs by the Central Bank as follows: the Central Bank has reasonable cause to believe the ICAV does not comply with section 13 of this Bill which deals with the provisions of registration information by the ICAV; an ICAV not authorised by the UCITS regulation 2011 that has failed to apply for an authorisation pursuant to section 18 of this Bill within 12 months of registration; the ICAV is being wound up and the Central Bank has reasonable cause to believe no liquidator is acting; and the ICAV is being wound up and the Central Bank has reasonable cause to believe the affairs of the ICAV are fully wound up and returns required to be made by the liquidator have not been made for six months.

Amendment No. 51 provides that the Central Bank may notify an ICAV of its intention to strike it from the register of ICAVs, in accordance with the proposed new section 128, on foot of grounds set out in the proposed section 126. This new section is identical to a new provision to be introduced by section 728 of the Companies Bill 2012 and it simplifies the general notice procedure for the strike-off of companies. Subsection 1 provides that the Central Bank may notify an ICAV of its intention to strike it from the register of ICAVs, in accordance with section 128, on foot of grounds set out in section 126.

Amendment No. 52 sets out the required contents of the Central Bank's notice of its intention to strike an ICAV from the register. This new section is similar to section 729 of the Companies Bill 2012.

Amendment No. 53 inserts and lists the remedial steps in respect of the grounds of the strike-off, as listed in section 126, that may be taken by an ICAV for the purpose of sections 128 to 130, inclusive. For example, having been granted authorisation is a remedial step. The new section 129 provides that, depending on the circumstances which led to the strike-off, a remedial step for an ICAV may be complying with section 13 of the Bill, obtaining an authorisation pursuant to section 18, providing details of a liquidator in up-to-date statements or providing notification pursuant to section 65 (6) of the Bill of the appointment of a director. Section 730 of the Companies Bill also provides for this new concept of a remedial step and, as with this section, affords an opportunity to the company to avert the continuation of the strike-off process by doing one of the things listed in the section.

Amendment No. 54 provides that the Central Bank may publish a public notice of its intention to strike the ICAV from the register of companies where no remedial steps have been taken by the ICAV since notification, pursuant to section 127. Amendment No. 55 provides for the conditions to be fulfilled by an ICAV seeking to be voluntarily struck off the register of ICAVs by the Central Bank. Amendment No. 56 obliges the Central Bank to give public notice of its intention to strike an ICAV off the register of ICAVs where it has received a valid application from the ICAV. Amendment No. 57 provides that where the necessary pre-conditions for voluntary and involuntary striking-off of an ICAV have been fulfilled, the Central Bank may strike the ICAV off the register of ICAVs and the ICAV will then be dissolved upon publication of the notice of the strike-off. Amendment No. 58 details the effect of removal from the register on the ICAV, together with its dissolution.

Amendment No. 59 empowers the Central Bank to seek a statement of affairs of the ICAV or such further information from the directors of an ICAV that has been involuntarily struck off. This is identical to a new provision to be introduced by section 736 of the Companies Bill and is in accordance with the recommendations of the company law review group, except for the enforcement powers given to the Office of the Director of Corporate Enforcement. In the original Bill it was intended to deal with the issue of cross-referencing. There are some differences between an ICAV and a company and, therefore, the Minister for Finance, on advice, took the view that was important to set out these processes.

There is a lot in that. I have a question on the involuntary strike-off of an ICAV and the robustness with which the Central Bank can act in this regard. We know the three criteria which have to be met. Section 126 sets out the grounds for dealing with an unauthorised ICAV, and refers to not having authorisation by the end of the 12 month period and so on. It seems as though a process has to be followed which can take a considerable period of time. Is the view that it is robust enough to protect people who invest money in funds which are managed by ICAVs and so on? A public notice will be issued in cases of voluntary strike-off. That is not the case in an involuntary strike-off because there is usually notice with which the ICAV can comply. In some cases it is not a case of compliance, rather, it is a notice that it will be struck off. What type of protection is in place for individuals?

It is an important question. I take the point that it is not always about compliance, but putting in the remedial steps in respect of the grounds of strike-off is an important safeguard for an ICAV which is trying to avert the strike-off. There are conditions for a voluntary strike-off. Deputy Doherty asked about an involuntary strike-off.

I was drawing a comparison between the public notice for a voluntary and involuntary strike-off.

The Deputy is concerned about people with funds in the ICAV.

Yes, and about people who would continue to invest during the period when a Central Bank has issued its notice that it is about to strike off an ICAV but business continues.

A process is gone through before the bank revokes the authorisation, which ensures that the funds are returned to the appropriate investors in the fund before the authorisation is revoked. It is not a matter of striking off the ICAV and leaving investors in the fund to fend for themselves.

I understand that, but an ICAV could go into liquidation. An ICAV may not be registered and may not have complied with section 13. If an ICAV continues to operate during that period of notice, which is, I understand, 28 days, it could continue to draw investment into the funds it manages. I know the Central Bank has proposals to try to get them back, but in the case of a liquidation they will be stung anyway. They should not be, because the Central Bank has identified a problem. Can a requirement be included in the Bill that ICAVs do not continue to draw on those type of investment funds where a notice has been issued?

I take the Deputy's point. Where an ICAV is, in effect, going into or is in liquidation, but there is a period of time during which the fear is that it will continue to take in more funds, the Central Bank has the power to immediately stop the bank seeking new funds or issuing new shares. It is something I am happy to re-examine between now and Report Stage. It is not the case that a period of 28 days has to be allowed to elapse before the Central Bank tells an ICAV it is not allowed to take in any more funds.

Amendment agreed to.

I move amendment No. 50:

In page 75, between lines 20 and 21, to insert the following:

“Grounds for involuntary strike off

126. The grounds referred to in section 125(1)(b) are:

(a) the Bank has reasonable cause to believe that the ICAV no longer complies with section 13;

(b) the ICAV, not being authorised under the UCITS Regulations, has not applied for authorisation under section 18 by the end of the period of 12 months since the date the coming into operation of a registration order in relation to the ICAV;

(c) the ICAV is being wound up and the Bank has reasonable cause to believe that no liquidator is acting;

(d) the ICAV is being wound up and the Bank has reasonable cause to believe that the affairs of the ICAV are fully wound up and that the returns required to be made by the liquidator have not been made for a period of 6 consecutive months;

(e) there are no persons recorded by the Bank as being current directors of the ICAV.”.

Amendment agreed to.

I move amendment No. 51:

In page 75, between lines 20 and 21, to insert the following:

“Bank’s notice to ICAV of intention to strike it off register

127. (1) The Bank may give notice in accordance with section 128 of the Bank’s intention to strike an ICAV off the register of ICAVs on a ground set out in any of paragraphs (a) to (e) of section 126.

(2) The Bank shall send the notice? —

(a) except where paragraph (b) applies, to the ICAV,

(b) if the ground for striking off is that set out in section 126(c) or (d) and an individual is recorded by the Bank as the liquidator of the ICAV, to the liquidator.

(3) The Bank shall also send a copy of the notice to such persons, if any, as are recorded by the Bank as being current directors of the ICAV but non-compliance with this subsection does not affect the validity of a notice that otherwise complies with subsection (1).

(4) Instead of giving a notice under subsection (1), the Bank may publish a notice in the Iris Oifigiúil containing the information required by section 128 if no notice of the situation of the registered office of the ICAV has been given to the Bank as required by sections 7 and 11(2).".

Amendment agreed to.

I move amendment No. 52:

In page 75, between lines 20 and 21, to insert the following:

“Contents of Bank’s notice to ICAV

128. (1) The Bank’s notice under section 127 shall —

(a) state that the issue of the notice is the first step in a process that may lead to the ICAV being struck off the register of ICAVs,

(b) state the ground or grounds for striking off being invoked by the Bank,

(c) state that the ICAV will be dissolved if it is struck off the register of ICAVs,

(d) specify the remedial step,

(e) specify the date on or before which the remedial step must be taken, and

(f) state that failure to take the remedial step on or before the date so specified may result in the Bank giving public notice of an intention to strike the ICAV off the register of ICAVs.

(2) The date to be specified for the purposes of subsection (1)(e) shall be a date falling not less than 28 days after the date of the notice.”.

Amendment agreed to.

I move amendment No. 53:

In page 75, between lines 20 and 21, to insert the following:

“Meaning of remedial step

129. For the purposes of sections 128, 130 and 133, the remedial step is whichever of the following applies:

(a) in the case of the ground for striking off set out in section 126(a), having brought itself into compliance with section 13;

(b) in the case of the ground for striking off set out in section 126(b), having applied for or been granted authorisation under section 18;

(c) in the case of the ground for striking off set out in section 126(c) or (d), having provided to the Bank the details of the liquidator and of up to date periodic statements having been furnished;

(d) in the case of the ground for striking off set out in section 126(e), having given notification to the Bank under section 65(6) of the appointment of a director of the ICAV.”.

Amendment agreed to.

I move amendment No. 54:

In page 75, between lines 20 and 21, to insert the following:

“Public notice of intention to strike company off register

130. (1) If the Bank has given a notice under section 127 and the remedial step has not been taken on or before the date specified in that notice for the purposes of section 128(1)(e), the Bank may, by publishing a notice in the Iris Oifigiúil that complies with subsection (2), give public notice of the Bank’s intention to strike the ICAV off the register of ICAVs.

(2) The notice shall —

(a) specify the ground for striking the ICAV off,

(b) specify the remedial step,

(c) specify the date on or before which the remedial step must be taken, and

(d) state that, unless that remedial step is taken on or before the date so specified, the Bank may strike the ICAV off and, if the Bank does so, the ICAV will be dissolved.

(3) The date to be specified for the purposes of subsection (2)(c) shall be a date falling not less than 28 days after the date of publication of the notice.”.

Amendment agreed to.

I move amendment No. 55:

In page 75, between lines 20 and 21, to insert the following:

“Conditions for voluntary strike off

131. (1) An ICAV may apply to the Bank to be struck off the register of ICAVs if the following conditions are satisfied:

(a) the circumstances relating to the ICAV are such as to give the Bank reasonable cause to believe that it has never carried on business or has ceased to carry on business;

(b) the ICAV has, within 3 months before the date of the application, by special resolution —

(i) resolved to apply to the Bank to be struck off on the ground that it has never carried on business or has ceased to carry on business, and

(ii) resolved that pending the determination of its application to be struck off (or, should it sooner occur, the cancellation, at its request, of this process), the ICAV will not carry on any business or incur any liabilities;

(c) the ICAV has delivered to the Bank a certificate, in such form as may be specified by the Bank and signed by each director, certifying that as at the date of the application —

(i) the amount of any assets of the ICAV does not exceed €150,

(ii) the amount of any liabilities of the ICAV (including contingent and prospective liabilities) does not exceed €150, and

(iii) the ICAV is not a party to ongoing or pending litigation;

(d) the Bank has received from the Revenue Commissioners written confirmation dated not more than 3 months before the date on which the Bank receives the application that the Revenue Commissioners do not object to the ICAV being struck off the register of ICAVs;

(e) the ICAV has caused an advertisement, in such form as may be specified by the Bank, of its intention to apply to be struck off to be published within 30 days before the date of the application in at least 1 daily newspaper circulating in the State.

(2) Where an application under this section by an ICAV to be struck off the register of ICAVs is made within one year after the date on which the ICAV has changed its name or its registered office (or both), then, as the case may be —

(a) the former name of the ICAV, as well as the existing name of the ICAV,

(b) the former address, as well as the current address, of the ICAV’s registered office, or

(c) both its former name and the former address of its registered office, as well as the existing name of the ICAV and the current address of its registered office,

shall be stated in the advertisement referred to in subsection (1)(e).”.

Amendment agreed to.

I move amendment No. 56:

In page 75, between lines 20 and 21, to insert the following:

“Public notice in case of voluntary strike off

132. (1) As soon as practicable after the receipt of an application by an ICAV to be struck off that satisfies the conditions set out in section 131 the Bank shall, by publishing a notice in the Iris Oifigiúil that complies with subsection (2), give public notice of the Bank’s intention to strike the ICAV off the register of ICAVs.

(2) The notice shall —

(a) state that the ICAV has applied to be struck off,

(b) state —

(i) that any person may deliver to the Bank an objection to the striking off of the ICAV in such form as may be specified by the Bank, and

(ii) that any such objection must be confined to the ground that one or more of the conditions set out in section 131(1) have not been satisfied,

(c) specify the period within which such an objection may be delivered to the Bank,

and

(d) state that, unless the Bank has received —

(i) an objection to the striking-off of the ICAV within that period, being an objection that the Bank sustains, or

(ii) a request for the cancellation of the process of strike off in accordance with subsection (4),

the Bank may strike the ICAV off the register of ICAVs and, if the Bank does so, the ICAV will be dissolved.

(3) The period to be specified for the purposes of subsection (2)(c) shall be the period ending 90 days after the date of publication of the notice.

(4) Within the period specified for the purposes of subsection (2)(c), the ICAV may request of the Bank, by delivering to the Bank a notice in such form as may be specified by the Bank, the cancellation of the process of its being struck off the register of ICAVs.”.

Amendment agreed to.

I move amendment No. 57:

In page 75, between lines 20 and 21, to insert the following:

“Striking off (involuntary and voluntary cases) and dissolution

133. (1) If the Bank has given a notice under section 130 and the remedial step has not been taken on or before the date specified in that notice for the purposes of subsection (2)(c) of that section, the Bank may strike the ICAV off the register of ICAVs.

(2) If the Bank has given a notice under section 132 and —

(a) no objection referred to in subsection (2)(b) of that section has been delivered to the Bank within the period specified in that notice for the purposes of subsection (2)(c) of that section or the Bank is of opinion that there is no reasonable basis to such an objection that has been so delivered, and

(b) the ICAV has not requested, in accordance with subsection (4) of that section, the cancellation of the process of its being struck off,

the Bank may strike the ICAV off the register of ICAVs.

(3) The Bank shall publish in the Iris Oifigiúil a notice of the striking of an ICAV off the register of ICAVs.

(4) The ICAV is dissolved on the date of publication by the Bank of the notice in the Iris Oifigiúil of its being struck off and that date is referred to subsequently in this Part as the “date of dissolution”.”.

Amendment agreed to.

I move amendment No. 58:

In page 75, between lines 20 and 21, to insert the following:

“Effect of removal and dissolution

134. (1) The liability, if any, of an officer or member of an ICAV that has been dissolved under section 133(4) shall continue and may be enforced as if the ICAV had not been dissolved.

(2) Nothing in this section or in section 133 shall affect the power of the High Court to wind up an ICAV that has been struck off the register of ICAVs or dissolved under that section.

(3) For the purposes and the purposes only of —

(a) an application for the restoration of the ICAV to the register of ICAVs under section 137 or 138, or

(b) in so far as is necessary for the making of such an application (or the doing of anything required by or under Chapter 2 to be done consequent on the making of it),

an ICAV shall be deemed not to have been dissolved under section 133.

(4) Subsection (3) shall not be read as authorising the dealing with, or the exercising of control over, any property that has become the property of the State pursuant to Part III of the State Property Act 1954.”.

Amendment agreed to.

I move amendment No. 59:

In page 75, between lines 20 and 21, to insert the following:

“Power of Bank to obtain information

135. (1) Where an ICAV has been struck off the register of ICAVs under section 133 on any of the grounds set out in section 126(a) or (b), the Bank may, by notice to the directors of the ICAV, require those persons to produce to the Bank a statement of affairs of the ICAV in accordance with this section.

(2) The persons to whom a notice is sent under subsection (1) shall, within the period specified in the notice in that behalf, produce to the Bank a statement of affairs of the ICAV that complies with subsection (3).

(3) The statement of affairs shall —

(a) be in such form as may be specified by the Bank,

(b) be verified by an affidavit,

(c) contain the following information in respect of the ICAV as at the date of dissolution:

(i) particulars of its assets, debts and liabilities;

(ii) the names and addresses of its creditors;

(iii) particulars of securities given by the ICAV, including the name of the secured creditor in each case and the date on which the security was given;

(iv) such further or other information as may be specified by the Bank or that the Bank may reasonably require.

(4) On the application of the Bank, the High Court may require a person who has made a statement under subsection (2) to appear before it and answer on oath any question relating to the content of the statement.

(5) A person who fails to comply with subsection (2) commits a category 3 offence.”.

Amendment agreed to.

Amendments Nos. 60 to 66, inclusive, are related and will be discussed together.

I move amendment No. 60:

In page 75, between lines 20 and 21, to insert the following:

“Chapter 2

Restoration of ICAV to register

Application of Chapter

136. This Chapter applies to an ICAV that has been struck off the register of ICAVs under Chapter 1.”.

This relates to Chapter 2 of this new section and as I have noted deals with restoration in regard to "strike off". The provisions here match those set out for investment in other companies in the Companies Bill 2012. Restoration of an ICAC to the register is possible on application to the Central Bank or the High Court within up to two years of the date of dissolution.

Amendment No. 60 provides that this Chapter applies to an ICAV that has been struck off under Chapter 1. Amendment No. 61 adds a new section, section 137 detailing how an application may be made to the Central Bank to have the ICAV restored to the register. This section is similar to section 728 of the Companies Bill 2012 in respect of striking off companies, which is derived from section 311A of the Companies Act 1963.

Amendment No. 62, section 138, details how an application may be made to the High Court to have a company restored to the register. This section is similar to the new provision to be introduced by section 739 of the Companies Bill 2012, in respect of the striking off of a company. Amendment No. 63, section 139, details the notice requirements for making an application to the court under section 138. Amendment No. 64, section 140, details specific terms to be inserted in listed instances in a restoration order made by the High Court pursuant to section 138.

Amendment No. 66, section 142, outlines further orders that the High Court may make on foot of applications made under section 138 or section 141. Section 142 lists the following supplementary orders that may be made by the High Court on foot of applications made under sections 138 or 141. That is, to give directions on placing the ICAV and all other persons in a position as if the ICAV had not been struck off, to direct the ICAV to change its name, where there may now exist another ICAV of a similar name, to order that the officers of the ICAV be held liable of a debt or liability incurred by or on behalf of the ICAV while the ICAV was struck off and such further orders as it may deem appropriate.

Amendment No. 61(3) states the application will come from a member or an officer of the ICAV. What are the numbers in terms of members or officers of the ICAV? Is there an issue because the Bill allows that?

I want to check I have got the question right. There must be a minimum of two directors of an ICAV.

What about officers who would be members?

There must be a secretary in addition to the directors.

Must the secretary be in addition to the director? Can the secretary be one of the directors?

The secretary must be in addition to the directors.

Therefore, we are talking about three individuals.

No, I am sorry, I have accidentally misled the Deputy. One of the directors may be the secretary. Therefore, only two are required.

Therefore it is like normal company law and we are talking about two individuals.

Yes, and they can be members or officers of the ICAV.

Who would the members be?

The shareholders in the ICAV.

Then any of the shareholders can make an application.

Yes, it is the members or the officers.

Is there any change in substance here to what was envisaged under the old section 125, which again referred to the Companies Acts? Is that just being spelled out in greater detail and enclosing it in the legislation? Is it the same issue and instead of cross referencing it is being included in the Bill.

It is. However, in the context of the strike off, there are one or two obvious differences, where an ICAV differs from a company. Therefore, we cannot strike off a company straight off. We cannot strike off the ICAV without ending the authorisation, as we discussed earlier. An ICAV does not have to file an annual statement. In general, the policy intent is the same as it was on Second Stage.

Amendment agreed to.

I move amendment No. 61:

In page 75, between lines 20 and 21, to insert the following:

“Restoration on application to Bank

137. (1) On an application by a person specified in subsection (3), the Bank may restore an ICAV to the register of ICAVs if —

(a) the Bank has reasonable cause to believe that the strike off of the ICAV has disadvantaged the applicant,

(b) the application is made in the form specified by the Bank,

(c) the application is received by the Bank within the period of 12 months after the date of dissolution of the ICAV, and

(d) the requirements of subsection (2) have been satisfied within the period of 15 months after the date of dissolution of the ICAV.

(2) The requirements referred to in subsection (1)(d) are the following:

(a) the Bank has received written confirmation from the Minister and the Revenue Commissioners that they have no objection to the ICAV being restored to the register of ICAVs under this section;

(b) the Bank is satisfied that no notification required by section 65(6) remains outstanding in relation to the ICAV.

(3) The Bank may restore an ICAV to the register of ICAVs on the application of a person who was a member or an officer of the ICAV at the date of its dissolution.

(4) On the registration of an application under this section and on payment of such fee as may be prescribed under section 32E of the Central Bank Act 1942, the Bank shall restore the ICAV to the register of ICAVs and the ICAV shall be deemed to have continued in existence as if it had not been struck off.

(5) Subject to any order made by the High Court in the matter, the restoration of an ICAV to the register of ICAVs under this section shall not affect the rights and liabilities of the ICAV in respect of any debt or obligation incurred, or any contract entered into, by, to, with or on behalf of the ICAV between the date of its dissolution and the date of restoration.”.

Amendment agreed to.

I move amendment No. 62:

In page 75, between lines 20 and 21, to insert the following:

“Restoration on application to High Court

138. (1) On an application in accordance with section 139 by a person specified in subsection (2), the High Court may order that an ICAV that has been struck off the register of ICAVs be restored to the register of ICAVs if —

(a) the striking off of the ICAV has disadvantaged the applicant,

(b) the application is made within the period of 2 years after the date of dissolution of the ICAV, and

(c) it is just and equitable to do so.

(2) The High Court may make the order on the application of —

(a) the ICAV,

(b) a creditor of the ICAV,

(c) a person who was a member or an officer of the ICAV at its date of dissolution, or

(d) a person who, at the date of its dissolution, had an entitlement (disregarding any right of the directors to decline to register the person as such) to be registered as a member of the ICAV by virtue of —

(i) the execution, in the person’s favour, of an instrument of transfer of a share, or

(ii) the transmission, by operation of law, to the person of a right to a share.

(3) Subject to a supplementary order made under section 142(c), the ICAV shall be deemed to have continued in existence as if it had not been struck off the register of ICAVs upon the Bank receiving a certified copy of the order under subsection (1) within 28 days after the date of its perfection.”.

Amendment agreed to.

I move amendment No. 63:

In page 75, between lines 20 and 21, to insert the following:

“Requirements for application to High Court under section 138

139. (1) An application under section 138 shall be made on notice to the Bank, and the Revenue Commissioners.

(2) In the case of an application under section 138 by a creditor, the application shall in addition be made on notice to —

(a) the Bank,

(b) such officers of the ICAV at the date of dissolution whose names are known, or ought reasonably to be known, by the creditor, and

(c) such other members or officers of the ICAV at the date of dissolution as the Bank, the Revenue Commissioners, upon being notified of the application, indicate in writing should be joined as notice parties to the application.”.

Amendment agreed to.

I move amendment No. 64:

In page 75, between lines 20 and 21, to insert the following:

“Terms of High Court order on application under section 139

140. (1) In making an order under section 138 on the application of a member or an officer of the ICAV, the High Court shall, unless reason to the contrary is shown to the satisfaction of the High Court, make it a term of the order that the order shall not have effect unless, within a specified period, the ICAV appoints 2 directors and delivers to the Bank the notification and consent required by section 65(6) and (8).

(2) For the avoidance of doubt, subsection (1) requires, unless reason to the contrary there mentioned is shown, the order of the High Court to specify that a thing set out in subsection (1) is to be done (save where it has already been done) notwithstanding that the ground on which the ICAV had been struck off the register of ICAVs did not relate to that thing.

(3) In making an order under section 138 on the application of a creditor of the ICAV, the High Court shall direct that, within a specified period (save where it has already been done) such specified members or officers take all reasonable steps to ensure that the ICAV appoints a director and delivers to the Bank the notification and consent required by section 65(6) and (8).

(4) For the avoidance of doubt, subsection (3) requires the order of the High Court to specify that a thing set out in that subsection is to be done (save where it has already been done) notwithstanding that the ground on which the ICAV had been struck off the register of ICAVs did not relate to that thing.

(5) In making an order under section 138 on the application of a creditor of the ICAV, the High Court may award the applicant the costs of the application against the ICAV.”.

Amendment agreed to.

I move amendment No. 65:

In page 75, between lines 20 and 21, to insert the following:

“High Court order for restoration on application of Bank

141. (1) On an application by the Bank in accordance with subsection (2), the High Court may order that an ICAV that has been struck off the register of ICAVs be restored to the register of ICAVs if —

(a) the application is made within the period of 2 years after the date of dissolution of the ICAV, and

(b) it is just and equitable to do so.

(2) An application under this section shall be made on notice to each person who, to the knowledge of the Bank, was an officer of the ICAV at the date of its dissolution.

(3) On the making of the order, the ICAV shall be deemed to have continued in existence as if it had not been struck off.

(4) In making an order under this section, the High Court may award the Bank the costs of the application against the ICAV restored to the register of ICAVs.”.

Amendment agreed to.

I move amendment No. 66:

In page 75, between lines 20 and 21, to insert the following:

“Supplementary High Court orders

142. In ordering that an ICAV be restored to the register of ICAVs under section 138 or 141, the High Court may do any of the following:

(a) except to the extent that the High Court makes an order under paragraph (c), give such directions as it thinks fit for placing the ICAV and all other persons as nearly as possible in the same position as if the ICAV had not been struck off the register of ICAVs;

(b) direct the ICAV to change its name if the name of the ICAV is too similar to the name of another ICAV already on the register of ICAVs;

(c) if and to the extent that it thinks fit, order that the officers of the ICAV, or any one or more of them as specified in the order, shall be liable for a debt or liability incurred by or on behalf of the ICAV during the period when it stood struck off the register of ICAVs;

(d) make any other order that it thinks fit.”.

Amendment agreed to.
Section 125 deleted.
SECTION 126
Question proposed: "That section 126 stand part of the Bill."

As I outlined earlier, I intend to introduce amendments to this section on Report Stage to set out the merger provisions in a similar way to as I have done in regard to other issues. I expect to come back on this section on Report Stage.

Question put and agreed to.
Sections 127 and 128 deleted.
Section 129 agreed to.
NEW SECTION

I move amendment No. 67:

In page 76, between lines 32 and 33, to insert the following:

“Fees

130. Fees shall be payable in accordance with section 32E of the Central Bank Act 1942 in respect of the performance by the Bank of its functions under this Act.”.

This is a technical amendment to take account of the existing requirement in section 32E of the Central Bank Act 1942, that the bank can only prescribe fees for functions it carries out, for example, registering an authorising ICAV, where the relevant legislation specifies by reference to section 32A that it may do so. With the introduction of the new Parts to the Bill, by way of amendment here today, it is thought safest just to have a blanket referral to section 32E to cover all elements of the Bill. This will mean that the bank will be able to ensure that industry bears a fair share of the cost of regulation.

Amendment agreed to.
Section 130 agreed to.
SECTION 131
Question proposed: "That section 131 stand part of the Bill."

I wish to alert the committee to the fact that I may bring amendments to this section on Report Stage to ensure the section's operability in terms of who is responsible for elements of enforcement, the Central Bank and the Office of the Director of Corporate Enforcement. Therefore, I expect we may return to this.

Question put and agreed to.
SECTION 132
Question proposed: "That section 132 stand part of the Bill."

Again, I need to clarify technical matters relating to the powers of the ODCE and the cross application of those powers into the legislation, so may return to this on Report Stage.

Question put and agreed to.
Section 133 agreed to.
SECTION 134
Question proposed: "That section 134 stand part of the Bill."

Again, I need to flag for the members that this section may be subject to an amendment on Report Stage. I need to decide the designation of responsibilities as outlined earlier.

Question put and agreed to.
Sections 135 and 136 agreed to.
SCHEDULE

I move amendment No. 68:

In page 79, to delete lines 4 to 14 and substitute the following:

Statement of Net Assets

1

Statement of Net Assets

Assets Fair Value

Investments in securities (cost) X

Financial derivatives X

Cash X

Deposits with brokers X

Receivables X

__________

Total Assets X

".

Amendment agreed to.

I move amendment No. 69:

In page 79, to delete lines 15 to 27 and substitute the following:

Liabilities

Securities sold (proceeds) X

Financial derivatives X

Due to broker X

Payables X

________

Total Liabilities X

_______

Net Assets or Liabilities

Equivalent to € per share

based on Y shares

outstanding X

_______

The accompanying notes are an integral part of these annual accounts.

".

Amendment agreed to.

I move amendment No. 70:

70. In page 80, to delete lines 1 to 6 and substitute the following:

Realised and unrealised gains/losses

from investments and foreign currency X

Realised and unrealised gains/losses

from financial derivatives X

The accompanying notes are an integral part of these annual accounts.

".

Amendment agreed to.
Schedule, as amended, agreed to.
Title agreed to.
Bill reported with amendments.