Amendment No. 35 has already been discussed with amendment No. 22.
SECTION 28.
I move amendment No. 35:
In page 32, subsection (1), line 43, after "employment" to insert "in the interests of the proper and orderly regulation and supervision of stock exchanges and their member firms and the protection of investors,".
Amendment agreed to.
I move amendment No. 36:
In page 33, subsection (2), line 15, after "or" where it secondly occurs to insert "of".
Amendment agreed to.
Amendments Nos. 37, 38 and 39 are related and may be taken together.
I move amendment No. 37:
In page 33, subsection (6), line 41, to delete "shall" and substitute "may".
These are technical drafting amendments. Amendment No. 37 aligns subsection (6) with the investment services directive. The Central Bank will be the competent authority for the purposes of that directive. Article 24 of the directive provides that where an investment firm is doing business in another member state, the competent authority which authorised it at home can request the competent authority in the host member state to monitor whether the firm is complying with the regulatory requirements of the home competent authority. This brings us back to the point raised by Deputy Cullen.
This is in line with the concept of supervision of the investment firms by their home competent authority no matter where in the EU the firm is doing business. The Bill as drafted obliges the Central Bank to carry out such verification if requested to do so by another competent authority. However, the directive does not require such an obligation under the directive. The host competent authority may opt to let the home competent authority do the verification for it itself. The amendment, by replacing "shall" with "may", will remove the obligation on the Central Bank and instead give it the option allowed by the directive.
Amendments Nos. 38 and 39 are drafting amendments. They ensure that the bank's obligation to verify that a foreign member firm is complying with its home regulatory requirements is confined to dealing with requests from the competent authority of the home member state. They also ensure that regulatory requirements imposed by the home competent authority, as well as by the home member state, are covered.
The changing of the word "shall" to "may" is a substantial change which changes the whole import of that section. If a competent authority in another member state requests our authority — the Central Bank — to investigate some matters that concern it, does that not remove the obligation on our authority to do so? The provision "shall do so" put it under an absolute obligation. "May" means that it does not have to do this if such a request is forthcoming.
The word "shall" was our mistake. The directive requires the word "may". By including the word "shall" we were going beyond the scope of the directive and would have been the only country in the EU to include "shall" rather than "may". We are conforming to the practice in other countries.
Does that not remove the obligation for any authority to act upon a request from another competent authority?
No, the obligation remains. That the word "shall has been deleted does not mean there is not an obligation. We are merely conforming to the terminology and thereby the practice.
Suppose the competent authority refuses to act, what recourse is then available if it is not compelled to do so?
We are retaining the option of doing so ourselves or allowing the other country to do so. We are not creating an escape hatch. Because the word "may" is used, it does not mean that it will not be done.
Does it mean "may" in the context that if it is not one, it must be the other?
Correct.
Amendment agreed to.
I move amendment No. 38:
In page 33, subsection (6), lines 42 and 43, to delete "another Member State" and substitute "that competent authority".
Amendment agreed to.
I move amendment No. 39:
In page 33, subsection (6), line 44, after "by" to insert "that competent authority or by".
Amendment agreed to.
Section 28, as amended, agreed to.