I move:
That Seanad Éireann approves the following Order in draft:
Trustee (Authorised Investments) Order, 1966,
a copy of which Order in draft has been laid before the House.
Trustee (Authorised Investments) Order, 1966: Motion.
The Trustee Act, 1893, as amended by the Trustee (Authorised Investments) Act, 1958, defines the investments in which trustees may invest trust funds unless expressly forbidden by the instrument, if any, creating the trust. There is provision for variation of the authorised investments by Ministerial Order. The primary qualification for trustee investments is that they should be secure, and subject to this, that they should give a favourable income to the life tenant.
The purpose of the Order before the House for approval is to add Bank of Ireland Loan Stock 1986-91 to the list of trustee authorised investments. The loan stock was issued in connection with the acquisition earlier this year by the Bank of Ireland of the Irish business of the National Bank. For each share held in that Bank shareholders received 36s. 6d. in cash and 20s. nominal amount of the loan stock which was issued at par and bears interest at 7 per cent per annum.
The total amount of stock issued was £6,000,000 and roughly two-thirds of this was received by Irish shareholders of the National Bank. It is repayable at par between 1986 and 1991. Registered holders have the right to subscribe in cash for an aggregate of £15 nominal amount of Capital Stock of the Bank of Ireland in respect of each £100 nominal amount of the loan stock held by them. The subscription rights will be exercisable on 30th April in the years 1969 to 1971 inclusive at specified prices.
The stock is quoted on the Irish and London Stock Exchanges. The price on the Dublin Stock Exchange on 12th December, 1966, was £101, being a premium of £1 on the issue price.
The Capital Stock of the Bank of Ireland has been a trustee investment here and in Britain for about a century. The new loan stock has been given trustee status in Britain and I am satisfied that it is a suitable stock for addition to the authorised trustee investments in this country.
Where the Minister for Finance proposes to make an Order to vary the list of authorised investments, he is obliged under the 1958 Act to consult with the following persons in regard to the terms of the Order—a Judge of the High Court nominated by the Chief Justice, the Governor of the Central Bank, the Public Trustee, the Chairman of the Irish Banks' Standing Committee, the President of the Incorporated Law Society of Ireland, the President of the Dublin Stock Exchange and the President of the Cork Stock Exchange. I have consulted these persons and they have no objections to the proposed Order.
I recommend the motion for the approval of the House.
I do not think there will be any difficulty in the Seanad in relation to this motion but there are a few questions I should like to ask in regard to it. Is it a fact that this loan stock is independent of the ordinary stock of the Bank of Ireland and does the ordinary stock of the Bank of Ireland still remain as a special listed trustee stock?
Yes.
I noticed in looking up the principal Act that one merchant bank is listed in section 1 in connection with trustee stock. We have other merchant banks set up here and I was wondering if the Minister had considered these merchant banks.
Two of them applied on a previous occasion. They were refused and the position is under review at the moment.
Question put and agreed to.