Dáil Éireann Debate, Wednesday - 12 May 2004
118 Mr. F. McGrath asked the Minister for Finance if practical action will be taken regarding the plight of brokers; if his attention has been drawn to the disproportionate effects the proposed funding of the Irish Financial Services Regulatory Authority will have on the broker community. [13744/04]
View answerAs the Deputy will be aware, IFSRA published a consultative paper on 11 December 2003, as part of a public consultation process, seeking the views of the financial services industry and the public generally on how the activities of IFSRA should be funded. The paper set out the main issues for consideration regarding the manner in which the authority's activities should be funded by the industry from 2004 onwards. The final deadline for receipt of submissions on the subject was 20 February 2004. A total of 67 submissions were received by IFSRA, including a combined submission from the Irish Brokers Association, the Professional Insurance Brokers Association, PIBA, and the Independent Mortgage Advisers Federation, IMAF. These bodies represent more than 1,500 insurance, investment and mortgage intermediary offices throughout the country. I understand that IFSRA met with these bodies soon after the commencement of the consultation process to outline the authority's proposals regarding the funding of IFSRA. The receipt of submissions marked the end of the formal consultation process.
Following the end of that phase of the process, PIBA requested a meeting with me to discuss, inter alia, the issues raised in their submission. Officials from my Department met with PIBA representatives on 1 March. PIBA’s main issues of concern are as follows: the intermediary sector having to pay for regulation in the first place — it felt that as it is consumers who benefit, consumers should pay; the proposed flat fee structure, which it regarded as inequitable and not related to ability to pay; the absence of a tiered system for levies relating to turnover, which it felt would better reflect ability to pay and be more equitable; the total cost to be recovered from the sector, which it felt should be capped; the proposed separate categorisation of mortgage intermediaries and other intermediaries; the level of cost recovery going forward; and the exclusion of certain product introducers from the proposed structure.
IFSRA, having considered the points raised by PIBA, has indicated it is favourably disposed towards meeting some of PIBA's concerns. It has indicated that it will restructure the proposals to allow for a tiered system for determining the levies; it will combine as requested the separate groups for intermediary firms and mortgage intermediaries; and the percentage of budget payable by the industry for 2005 and 2006 will not exceed the level proposed for 2004. IFSRA has indicated its concern to ensure that levies are imposed in a manner that does not create unnecessary or disproportionate burdens for the industry and its current proposals reflect this. I agree with that approach. The Deputy might also like to be aware that I will be putting forward an amendment to the Central Bank and Financial Services Authority of Ireland Bill 2003 on Report Stage in the Dáil, the effect of which will be to allow IFSRA to provide authorisation for periods longer than one year for mortgage intermediaries — they must currently be authorised annually — thereby further reducing both the regulatory burden and the associated costs. The authority, having considered all the issues raised during the consultation process, will be making a submission to me in the near future seeking my approval for the levies.
