"That, pursuant to Standing Order 127, it be an instruction to the Committee on the Markets in Financial Instruments and Miscellaneous Provisions Bill 2007, that it has power to make provision in the Bill:
to repeal sections 9 and 10 of the Insurance Act 1936 and to make consequential amendments to the European Communities (Non-life Insurance) Regulations 1976 and the European Communities (Life Assurance) Regulations 1984;
to provide that all non-deposit taking lenders engaged in retail lending, together with providers of home reversion schemes, will be brought within the Financial Regulator's authorisation and on-going supervision regime by way of an amendment to the Central Bank Act 1997;
to allow the disclosure, under the terms of the Freedom of Information Act, subject to certain exemptions, of confidential information obtained by a person while performing duties as a member of the board or a member of staff of Ordnance Survey Ireland (OSI);
to make amendments to the Investor Compensation Act 1998 to take account of the European Communities (Markets in Financial Instruments) Regulations 2007 and of the European Communities (Insurance Mediation) Regulations 2005 and as a result of experience with the implementation of the investor compensation scheme;
to amend the definition of ‘gross national product' in the National Pensions Reserve Fund Act 2000 on which the annual contribution to the National Pensions Reserve Fund is based; and
to provide for the transfer of oversight and funding of Ordnance Survey Ireland (OSI) from the Minister for Finance to the Minister for Communications, Energy and Natural Resources.""
This motion provides that the committee be instructed to consider the Committee Stage amendments relating to the introduction of new sections to the Markets in Financial Instruments and Miscellaneous Provisions Bill 2007 that I will present shortly. The amendments have already been made available to the House and I consider them to be highly important. I will now outline the main features of my package of amendments.
On the repeal of sections 9 and 10 of the Insurance Act 1936, representatives of the insurance industry have indicated some concerns that they have regarding these two provisions and how they are having a negative impact on the operation of international companies in Ireland. For example, under section 9 a person returning to Ireland from outside the EU, who continues to contribute to a savings product structured as a life insurance policy which he had established in his former country of residence, is at risk of committing an offence. Under section 10 there is a possible negative impact for international companies who wish to put together group-wide insurance policies such as professional indemnity insurance. The Department, in consultation with the Financial Regulator, has reviewed the position and it has been agreed that the provisions have no relevance in the current business environment and should be repealed.
It is proposed to table an amendment to insert a new section 19 in the Bill. I have indicated on several occasions previously my intention to introduce a regulatory regime for non-deposit taking lenders. Under the proposed changes, all non-deposit taking lenders engaged in retail lending will be brought within the Financial Regulator's authorisation and ongoing supervision regime by way of an amendment to Part V of the Central Bank Act 1997. An authorisation from the Financial Regulator will be required for any firm whose business includes lending to the public, that is, to individuals and to small firms. Home reversion providers, who provide funds in exchange for a future interest in property, will also be included in this regime.
It was originally intended to address the regulation of this sector later this year in the contexts of the Third Money Laundering Directive and the draft Directive on Credit Agreements for Consumers, both of which would require some form of regulation or monitoring of all credit providers. However, there have been growing concerns that because some firms are not subject to specific regulation, their lending activities fall outside the scope of the Financial Regulator's consumer protection code. As a result, borrowers from these firms, which include those in the sub-prime consumer credit and mortgage lending markets, do not benefit from the additional safeguards which that code provides. I decided therefore to avail of the opportunity presented by this Bill to remedy this shortcoming as a matter of urgency.
Part V of the Central Bank Act 1997 provides a framework for the authorisation and supervision of regulated businesses such as bureaux de change and money transmitters. The amendments will add home reversion and retail credit to these regulated activities. It will also introduce some necessary additional powers for the Financial Regulator. These additional powers are needed to take account of the fact that there is a wider consumer dimension to loans and mortgages than there is to money changing and transmission.
The amendment I now introduce is a technical amendment, in line with a recommendation of the Oireachtas Joint Committee on Finance and the Public Service, which will allow the disclosure, under the terms of the Freedom of Information Act, of confidential information obtained by a person while performing duties as a member of the board or a member of staff of Ordnance Survey Ireland, OSI, or an adviser or a consultant to OSI. Ordnance Survey Ireland is already subject to FOI — as a body listed in the First Schedule of the FOI Act 1997 by virtue of the FOI Act 1997 (Prescribed Bodies) Regulations 2000.
It is also intended to introduce amendments to the Investor Compensation Act 1998. This Act had a network of legal cross-references to the pre-MiFID regime, namely, the Stock Exchange Act 1995 and the Investment Intermediaries Act 1995. With the repeal of the Stock Exchange Act and the Investment Intermediaries Act being disapplied to MiFID firms, it is necessary to ‘re-wire' the legal cross-references from the Investor Compensation Act to the new MiFID regime. Some amendments are also required to take account of the transposition of the Insurance Mediation Directive in 2005 and to deal with some technical difficulties experienced by the Investor Compensation Company Limited, the ICCL, in administering the investor compensation scheme.
The National Pensions Reserve Fund Act provides in section 18(2) for the payment of 1% of gross national product, GNP, annually from the Central Fund to the National Pensions Reserve Fund. It is proposed to amend the definition of GNP in that Act for the sake of clarity to confirm that the statutory annual payment into the National Pensions Reserve Fund is 1% of the figure for GNP published in the budget book. This is a technical amendment to avoid doubt. It will have no effect on the amount of the annual contribution to the National Pensions Reserve Fund, which will continue to be 1% of gross national product as estimated at the time of the budget.
Responsibility for the oversight and funding of Ordnance Survey Ireland is being transferred from the Minister for Finance to the Minister for Communications, Energy and Natural Resources. This transfer was one of the key recommendations emanating from a value for money and policy review of the grant-in-aid to Ordnance Survey Ireland last autumn. The Department of Communications, Energy and Natural Resources already oversees the Geological Survey and, arising from its core functions, has the structures and expertise required to monitor the activities of commercial State-sponsored bodies. All parties, including OSI, are amenable to the transfer.
It is not feasible to effect the new arrangement by way of the usual transfer of functions order. Because the OSI was statutorily established under the aegis of the Minister for Finance, the existing legislation does not provide for the usual statutory consents of the Minister for Finance in such matters as the level of annual grant-in-aid, the number and remuneration levels of staff, etc. Accordingly, primary legislation is now being brought forward to effect this proposed transfer.
This has been a necessarily brief overview of the additional policy proposals I shall bring forward by way of Committee Stage amendments. I shall also introduce some minor technical amendments to the Bill as published and I would not expect that Deputies would have any major difficulties with them.