S.I. No. 29/1996 - Investment Intermediaries Act, 1995 (Bonding of Intermediaries) Regulations, 1996.

S.I. No. 29 of 1996.

INVESTMENT INTERMEDIARIES ACT, 1995 (BONDING OF INTERMEDIARIES) REGULATIONS, 1996.

I, RUAIRÍ QUINN, Minister for Finance, in exercise of the powers conferred on me by section 51 of the Investment Intermediaries Act, 1995 (No. 11 of 1995), hereby make the following Regulations:

1. These Regulations may be cited as the Investment Intermediaries Act, 1995 (Bonding of Intermediaries) Regulations, 1996, and shall come into operation on the 11th day of March, 1996.

2. In these Regulations,

"accounting year" means the year commencing on 1 October 1995 and subsequent accounting years;

"authorised investment business firm" has the same meaning as it has in the Investment Intermediaries Act, 1995 ;

"the bond" means the bond to be effected by an authorised investment business firm under section 51 of the Investment Intermediaries Act, 1995 , and references to "bond" shall be construed accordingly;

"the insurance bond" means the bond to be effected by an authorised investment business firm which is also an insurance intermediary for the purposes of the Insurance Act, 1989 , in respect of its insurance business in accordance with section 47 of the Insurance Act, 1989 , and references to "insurance bond" shall be construed accordingly;

"insurance business" has the same meaning as "business" in the Insurance Act, 1989 ;

"insurance company" means an insurance company authorised under the Insurance Acts and Regulations as defined by the European Communities (Non-life Insurance) Framework Regulations, 1994 ( S.I. No. 359 of 1994 ), to carry on business of the type referred to in Class 15 of Annex I thereto;

"insurance intermediary" has the same meaning as it has in the Insurance Act, 1989 ;

"investment business services" has the same meaning as it has in the Investment Intermediaries Act, 1995 ;

"investment instrument" has the same meaning as it has in the Investment Intermediaries Act, 1995 .

3. Subject to Regulation 4, where an authorised investment business firm which is also an insurance intermediary for the purposes of Part IV of the Insurance Act, 1989 , is required to effect an insurance bond as respects its insurance business under that Part, then the authorised investment business firm may opt to hold a bond under the Investment Intermediaries Act, 1995 , which shall apply to both investment business services for the purposes of the Investment Intermediaries Act, 1995 , and to insurance business for the purposes of the Insurance Act, 1989 , and, where the authorised investment business firm so opts, the requirement that the authorised investment business firm be bonded under Part IV of the Insurance Act, 1989 , shall thereby be met.

4. (1) In the case of an investment business firm to which Regulation 3 does not apply, the bond shall be effected in either of the following ways:

( a ) by the provision by an insurance company of a bond in the form set out in the First Schedule to these Regulations, or

( b ) by the provision of a bond consisting of—

(i) a personal bond of the investment business firm, and

(ii) a guarantee in respect of his obligations thereunder by one of the persons referred to in paragraph (3) of this Regulation,

in the form set out in the Second Schedule to these Regulations.

(2) In the case of an investment business firm to which Regulation 3 applies, the bond shall be effected in one of the following ways:

( a ) by the provision by an insurance company of a bond in the form set out in the Third Schedule to these Regulations, or

( b ) by the provision of a bond consisting of—

(i) a personal bond of the investment business firm, and

(ii) a guarantee in respect of his obligations thereunder by one of the persons referred to in paragraph (3) of this Regulation,

in the form set out in the Fourth Schedule to these Regulations, or

( c ) in the first accounting year, by endorsement of an existing insurance bond.

(3) The persons which may provide the guarantee referred to in subparagraph (b)(ii) of paragraph (1) and subparagraph (b)(ii) of paragraph (2) of this Regulation are:

( a ) a holder of a licence under section 9 of the Central Bank Act, 1971 (No. 24 of 1971), and

( b ) a credit institution authorised under Directive No. 77/780/EEC of 12 December 1977⁽¹⁾ as amended by Council Directive No. 89/646/EEC of 15 December 1989⁽²⁾ as amended and extended from time to time, but not including an institution referred to in Article 2(2) of that Directive.

⁽¹⁾O.J. No. L.322 17-12-77.

⁽²⁾O.J. No. L.386 30-12-89.

(4) In the case of an authorised investment business firm to which Regulation 3 does not apply, the sum to be specified (by way of the value of the bond) in any of the forms of bond referred to in paragraph (1) of this Regulation shall be the sum calculated by reference to section 51 of the Investment Intermediaries Act, 1995 .

(5) In the case of an authorised investment business firm to which Regulation 3 applies, the amount to be specified (by way of the value of the bond) in any of the forms of bond referred to in paragraph (2) of this Regulation shall be the sum of

( a ) the value calculated by reference to section 51 of the Investment Intermediaries Act, 1995 , and

( b ) the value of the insurance bond which the authorised investment business firm would be required to hold but for Regulation 3.

(6) In the case of a bond held by an authorised investment business firm to which Regulation 3 applies, it shall be a condition of the bond that, to the extent that loss or liability arises in respect of insurance business, the sum of money to be applied in respect of such loss or liability shall be the amount of the insurance bond which the authorised investment business firm would have been obliged to hold but for Regulation 3 or the amount of the loss or liability arising in respect of insurance business, whichever is the lesser.

(7) Notwithstanding paragraph (6) of this Regulation, in the case of a bond held by an authorised investment business firm to which Regulation 3 applies, any sum to be applied in respect of such loss or liability as arises in respect of insurance business shall be reduced by the amount where

A is the amount of the expenses referred to in section 51 (3) of the Investment Intermediaries Act, 1995 ;

B is the amount of the loss or liability arising in respect of insurance business;

C is the amount of the total of the loss or liability arising both in respect of insurance business and in respect of investment business.

(8) The period of validity of a bond or of an endorsement to an existing insurance bond referred to in paragraphs (1) and (2) of this Regulation shall be 12 months save that, where section 51 of the Investment Intermediaries Act, 1995 , comes into operation at any time in the first accounting year, the period to be specified shall be the remainder of that year expressed in the number of months or days or both (as the case may be) that that period comprises.

5. (1) The authorised investment business firm shall cause to be displayed a copy of the bond in a prominent position so that it is clearly visible and easily legible in all premises occupied by the authorised investment business firm in which the authorised investment business firm carries on business as an authorised investment business firm.

(2) The authorised investment business firm shall ensure that in its sales literature and notepaper relating to its business as an authorised investment business firm mention is made, in a prominent position and in such a way as to be clearly visible and easily legible, of the fact that a bond required by the Investment Intermediaries Act, 1995 , is in existence in respect of its business as an authorised investment business firm.

Regulation 4

FIRST SCHEDULE

FORM OF BOND SECURED WITH AN INSURANCE COMPANY BY AN AUTHORISED INVESTMENT BUSINESS FIRM

INVESTMENT INTERMEDIARIES ACT, 1995 — SECTION 51

INVESTMENT INTERMEDIARIES ACT, 1995 (BONDING OF

INTERMEDIARIES) REGULATIONS, 1996

BOND SECURED BY THIS AUTHORISED INVESTMENT

BUSINESS FIRM WITH INSURANCE COMPANY IN

ACCORDANCE WITH THE ABOVE STATUTORY PROVISIONS

AND REGULATIONS.

1. We, (name of insurance company............................................................ .......), hereinafter in this Bond referred to as "the Surety", having our registered office at............................................................ ............ at the behest of (name of authorised investment business firm.........................................................), hereinafter in this Bond referred to as "the Investment Business Firm", of (address of Investment Business Firm's principal place of business................................................), hereby undertake and acknowledge ourselves bound to make available to the person nominated or approved of by the Supervisory Authority, being the relevant supervisory authority for the Investment Business Firm for the purposes of the Investment Intermediaries Act, 1995 (No. 11 of 1995), hereinafter in this Bond referred to respectively as "the Nominee" and "the Supervisory Autority", such sum of money as the Nominee may demand in accordance with clause 3 of this Bond but not exceeding £      (value of the Bond) to be applied in accordance with clause 4 of this Bond.

2. This Bond shall be valid for   month/months,    day/days, commencing on the

    day of    (month and year) and expiring on the   day of   (month and year).

3. IT IS AGREED that where during the period of validity of this Bond or any previous Bond effected by the Investment Business Firm under the Investment Intermediaries Act, 1995 (Bonding of Intermediaries) Regulations, 1996, hereinafter in this Bond referred to as "the Regulations", there is or has been an inability or failure on the part of the Investment Business Firm to meet its financial obligations in relation to any sum of money received by the Investment Business Firm from, or on behalf of, its clients in respect of investment business services for the purposes of the Investment Intermediaries Act, 1995 , during such period, the Surety will make available the sum of money referred to in clause 1 of this Bond upon demand being made on the Surety in respect thereof by the Nominee.

4. (1) Any sum of money made available to the Nominee under this Bond shall be applied by the Nominee—

( a ) subject to subclause (2) of this clause, for the benefit of any client of the Investment Business Firm who has incurred loss or liability because of the inability or failure of the Investment Business Firm to meet its financial obligations in relation to any sums of money received by the Investment Business Firm from, or on behalf of, that client in respect of investment business services for the purposes of the Investment Intermediaries Act, 1995 ; and

( b ) to indemnify, with the consent of the Supervisory Authority and up to such sum as may be specified by the Supervisory Authority, the Nominee in respect of such reasonable expenses as are incurred in carrying out the functions referred to in paragraph (a) of this subclause.

(2) Subclause (1) (a) of this clause shall not apply to any sum of money as is referred to therein where any proceeds of a previous bond effected under the Regulations (including, as the case may be, any proceeds of the guarantee provided in respect of it) have been applied for the benefit of the client referred to in the said subclause (1) (a) with respect to the said sum of money.

5. IT IS A CONDITION of this Bond that the Nominee will repay to the Surety such part of any sum of money made available to the Nominee under clause 3 of this Bond as shall not be expended for the purposes mentioned in paragraph (a) or (b) of clause 4 (1) of this Bond.

6. The Surety undertakes—

( a ) to issue to the Investment Business Firm a certified copy of this Bond, and

( b ) in the event of the Investment Business Firm, on the expiry of this Bond, not effecting a new bond with the Surety, to notify the Supervisory Authority in writing of that fact not later than seven days after such expiry (without assuming any duty of care to the Nominee or clients of the Investment Business Firm to ensure that the Supervisory Authority is so notified).

SIGNED BY (signature of an officer of the Insurance Company together with the Seal of the Insurance Company)

FOR AND ON BEHALF OF (name of Insurance Company)

Dated this...................... day of............................................................ .............................. (month and year)

Regulation 4

SECOND SCHEDULE

FORM OF BOND CONSISTING OF PERSONAL BOND OF

AUTHORISED INVESTMENT BUSINESS FIRM AND

GUARANTEE IN RESPECT OF ITS OBLIGATIONS THEREUNDER

INVESTMENT INTERMEDIARIES ACT, 1995 — SECTION 51

INVESTMENT INTERMEDIARIES ACT, 1995 (BONDING OF INTERMEDIARIES) REGULATIONS, 1996

PERSONAL BOND OF AUTHORISED INVESTMENT BUSINESS

FIRM WITH GUARANTEE IN RESPECT OF OBLIGATIONS

THEREUNDER PROVIDED IN ACCORDANCE WITH THE

ABOVE STATUTORY PROVISIONS AND REGULATIONS.

1. I/We, (name of authorised investment business firm.............................................), hereinafter in this Bond referred to as "the Investment Business Firm", of (address of Investment Business Firm's principal place of business...........................................), hereby undertake and acknowledge myself/ourselves bound to make available to the person nominated or approved of by the Supervisory Authority, being the relevant supervisory authority for the Investment Business Firm for the purposes of the Investment Intermediaries Act, 1995 (No. 11 of 1995), hereinafter in this Bond referred to respectively as "the Nominee" and "the Supervisory Authority", such sum of money as the Nominee may demand in accordance with clause 3 of this Bond but not exceeding

£    (value of the Bond) to be applied in accordance with clause 4 of this Bond.

2. This Bond shall be valid for   month/months,   day/days, commencing on the

    day of    (month and year) and expiring on the day of (month and year).

3. IT IS AGREED that where during the period of validity of this Bond or any previous Bond effected by the Investment Business Firm under the Investment Intermediaries Act, 1995 (Bonding of Intermediaries) Regulations, 1996, hereinafter in this Bond referred to as "the Regulations", there is or has been an inability or failure on the part of the Investment Business Firm to meet its financial obligations in relation to any sum of money received by the Investment Business Firm from, or on behalf of, its clients in respect of investment business services for the purposes of the Investment Intermediaries Act, 1995 , during such period, the Surety will make available the sum of money referred to in clause 1 of this Bond upon demand being made on the Surety in respect thereof by the Nominee.

4. (1) Any sum of money made available to the Nominee under this Bond shall be applied by the Nominee—

( a ) subject to subclause (2) of this clause, for the benefit of any client of the Investment Business Firm who has incurred loss or liability because of the inability or failure of the Investment Business Firm to meet its financial obligations in relation to any sums of money received by the Investment Business Firm from, or on behalf of, that client in respect of investment business services for the purposes of the Investment Intermediaries Act, 1995 ; and

( b ) to indemnify, with the consent of the Supervisory Authority and up to such sum as may be specified by the Supervisory Authority, the Nominee in respect of such reasonable expenses as are incurred in carrying out the functions referred to in paragraph (a) of this subclause.

(2) Subclause (1)(a) of this clause shall not apply to any sum of money as is referred to therein where any proceeds of a previous bond effected under the Regulations (including, as the case may be, any proceeds of the guarantee provided in respect of it) have been applied for the benefit of the client referred to in the said subclause (1)(a) with respect to the said sum of money.

5. IT IS A CONDITION of this Bond that the Nominee will repay to the investment Business Firm such part of any sum of money made available to the Nominee under clause 3 of this Bond as shall not be expended for the purposes mentioned in paragraph (a) or (b) of clause 4 (1) of this Bond.

GUARANTEE IN RESPECT OF INVESTMENT BUSINESS FIRM'S

OBLIGATIONS UNDER FOREGOING CLAUSES.

6. We, (name of person providing guarantee......................................................), hereinafter in this Bond referred to as "the Guarantor", having our registered office at...................................................... at the behest of the Investment Business Firm, hereby guarantee that there will be made available by the Investment Business Firm the sum of money referred to in clause 1 of this Bond upon demand being made on the Investment Business Firm in respect thereof in accordance with clause 3 of this Bond.

7. Any demand under the foregoing guarantee shall be made on the Guarantor by the Nominee in accordance with the Regulations.

8. Clause 4 of this Bond shall apply to the application of any sum of money made available under the foregoing guarantee to the Nominee.

9. IT IS A CONDITION of the foregoing guarantee that the Nominee will repay to the Guarantor such part of any sum of money made available to the Nominee under the guarantee as shall not be expended for the purposes mentioned in paragraph (a) or (b) of clause 4(1) of this Bond.

10. The Guarantor undertakes—

( a ) to issue to the Investment Business Firm a certified copy of this Bond, and

( b ) in the event of the Investment Business Firm, on the expiry of this Bond, not presenting a new bond to the Guarantor for the purpose of securing a guarantee in respect of the Investment Business Firm's obligations thereunder, to notify the Supervisory Authority in writing of that fact not later than seven days after such expiry (without assuming any duty of care to the Nominee or clients of the Investment Business Firm to ensure that the Supervisory Authority is so notified).

SIGNED BY (signature of Investment Business Firm or member of Investment Business Firm, or where the Investment Business Firm is a registered company, signature of an officer of the company together with the seal of the company)

FOR AND ON BEHALF OF (name of Investment Business Firm)

Dated this ............................ day of............................................................ ................... (month and year)

SIGNED BY (signature of an officer of Guarantor together with Seal of the Guarantor)

FOR AND ON BEHALF OF (name of Guarantor)

Dated this ................................ day of............................................................ ... (month and year)

Regulation 4

THIRD SCHEDULE

FORM OF BOND SECURED WITH AN INSURANCE COMPANY BY AN AUTHORISED INVESTMENT BUSINESS FIRM WHICH IS ALSO AN INSURANCE INTERMEDIARY TO WHICH REGULATION 3 OF THE INVESTMENT INTERMEDIARIES ACT, 1995 (BONDING OF INTERMEDIARIES) REGULATIONS, 1996, APPLIES

INVESTMENT INTERMEDIARIES ACT, 1995 — SECTION 51 INVESTMENT INTERMEDIARIES ACT, 1995 (BONDING OF INTERMEDIARIES) REGULATIONS, 1996.

BOND SECURED BY THIS AUTHORISED INVESTMENT BUSINESS FIRM WITH INSURANCE COMPANY IN ACCORDANCE WITH THE ABOVE STATUTORY PROVISIONS AND REGULATIONS.

1. We, (name of insurance company............................................................ ............................................), hereinafter in this Bond referred to as "the Surety", having our registered office at................................ at the behest of (name of authorised investment business firm............................................................ .....), hereinafter in this Bond referred to as "the Investment Business Firm", of (address of Investment Business Firm's principal place of business.......................), hereby undertake and acknowledge ourselves bound to make available to the person nominated or approved of by the Supervisory Authority, being the supervisory authority for the Investment Business Firm for the purposes of the Investment Intermediaries Act, 1995 (No. 11 of 1995 ), hereinafter in this Bond referred to respectively as "the Nominee" and "the Supervisory Authority", such sum of money as the Nominee may demand in accordance with clause 3 of this Bond but not exceeding £   (value of the Bond) to be applied in accordance with clause 4 of this Bond.

2. This Bond shall be valid for  month/months, day/days, commencing on the  day of    (month and year) and expiring on the   day of   (month and year).

3. IT IS AGREED that, subject to subclause (2) of clause 4, where during the period of validity of this Bond or any previous Bond effected by the Investment Business Firm under the Investment Intermediaries Act, 1995 (Bonding of Intermediaries) Regulations, 1995, hereinafter in this Bond referred to as "the Regulations", or under the Insurance Act, 1989 , there is or has been an inability or failure on the part of the Investment Business Firm to meet its financial obligations in relation to any sum of money received by the Investment Business Firm from, or on behalf of, its clients in respect of investment business services for the purposes of the Investment Intermediaries Act, 1995 , hereinafter in this Bond referred to as "investment business", or insurance business for the purposes of the Insurance Act, 1989 , hereinafter in this Bond referred to as "insurance business", during such period, the Surety will make available the sum of money referred to in clause 1 of this Bond upon demand being made on the Surety in respect thereof by the Nominee.

4. (1) Any sum of money made available to the Nominee under this Bond shall be applied by the Nominee—

( a ) subject to subclauses (2) and (3) of this clause, for the benefit of any client of the Investment Business Firm who has incurred loss or liability because of the inability or failure of the Investment Business Firm to meet its financial obligations in relation to any sums of money received by the Investment Business Firm from, or on behalf of, that client in respect of investment business services for the purposes of the Investment Intermediaries Act, 1995 , and insurance business for the purposes of the Insurance Act, 1989 ; and

( b ) to indemnify, with the consent of the Supervisory Authority and up to such sum as may be specified by the Supervisory Authority. the Nominee in respect of such reasonable expenses as are incurred in carrying out the functions referred to in paragraph (a) of this subclause.

(2) Subject to subclauses (3) and (4) of this clause, to the extent that loss or liability arises in respect of insurance business, the Nominee shall apply that proportion of the sum of money made available under this Bond for the benefit of any client of the Investment Business Firm who has incurred loss or liability because of the inability or failure of the Investment Business Firm to meet its financial obligations in relation to any sums of money received by the Investment Business Firm from, or on behalf of, such client in respect of insurance business which bears to the sum of money made available under this Bond the same proportion that the loss or liability suffered by clients of the Investment Business Firm in respect of insurance business bears to the total loss or liability suffered by clients of the Investment Business Firm in respect of both insurance business and investment business.

(3) To the extent that loss or liability arises in respect of insurance business, the sum of money to be applied in respect of such loss or liability shall be the amount of the insurance bond which the Investment Business Firm would have been obliged to hold but for Regulation 3 of the Investment Intermediaries Act, 1995 (Bonding of Investment Intermediaries) Regulations. 1996 or the amount of the loss or liability arising in respect of insurance business, whichever is the lesser.

(4) The sum of money to be applied in respect of loss or liability incurred by clients in respect of insurance business shall be reduced by the amount , where A is the amount of the expenses referred to in subclause 1 (b) of this clause, B is the amount of the loss or liability arising in respect of insurance business and C is the amount of the total of the loss or liability arising both in respect of insurance business and in respect of investment business.

(5) Subclause (1) (a) of this clause shall not apply to any sum of money as is referred to therein where any proceeds of a previous bond effected under the Regulations (including, as the case may be, any proceeds of the guarantee provided in respect of it) or a previous bond effected under the Insurance Act. 1989 (including, as the case may be, any proceeds of the guarantee provided in respect of it) have been applied for the benefit of the client referred to in the said subclause (1) (a) with respect to the said sum of money.

5. IT IS A CONDITION of this Bond that the Nominee will repay to the Surety such part of any sum of money made available to the Nominee under clause 3 of this Bond as shall not be expended for the purposes mentioned in paragraph (a) or (b) of clause 4(1) of this Bond.

6. The Surety undertakes—

( a ) to issue to the Investment Business Firm a certified copy of this Bond, and

( b ) in the event of the Investment Business Firm, on the expiry of this Bond, not effecting a new bond with the Surety, to notify the Supervisory Authority and the Minister for Enterprise and Employment in writing of that fact not later than seven days after such expiry (without assuming any duty of care to the Nominee or clients of the Investment Business Firm to ensure that the Supervisory Authority or the Minister for Enterprise and Employment is so notified).

SIGNED BY (signature of an officer of the Insurance Company together with the seal of the Insurance Company)

FOR AND ON BEHALF OF (name of Insurance Company)

Dated this.................................day of............................................................ .................... (month and year)

Regulation 4

FOURTH SCHEDULE

FORM OF BOND CONSISTING OF PERSONAL BOND OF AUTHORISED INVESTMENT BUSINESS FIRM WHICH IS ALSO AN INSURANCE INTERMEDIARY AND TO WHICH REGULATION 3 OF THE INVESTMENT INTERMEDIARIES ACT, 1995 (BONDING OF INTERMEDIARIES) REGULATIONS, 1996, APPLIES AND GUARANTEE IN RESPECT OF ITS OBLIGATIONS THEREUNDER

INVESTMENT INTERMEDIARIES ACT, 1995 — SECTION 51 INVESTMENT INTERMEDIARIES ACT, 1995 (BONDING OF INTERMEDIARIES) REGULATIONS, 1996

PERSONAL BOND OF AUTHORISED INVESTMENT BUSINESS FIRM WITH GUARANTEE IN RESPECT OF OBLIGATIONS THEREUNDER PROVIDED IN ACCORDANCE WITH THE ABOVE STATUTORY PROVISIONS AND REGULATIONS.

1. I/We, (name of authorised investment business firm....................................), hereinafter in this Bond referred to as "the Investment Business Firm", of (address of Investment Business Firm's principal place of business...................................), hereby undertake and acknowledge myself/ourselves bound to make available to the person nominated or approved of by the Supervisory Authority, being the relevant supervisory authority for the Investment Business Firm for the purposes of the Investment Intermediaries Act, 1995 , hereinafter in this Bond referred to respectively as "the Nominee" and "the Supervisory Authority", such sum of money as the Nominee may demand in accordance with clause 3 of this Bond but not exceeding £   

(value of the Bond) to be applied in accordance with clause 4 of this Bond.

2. This Bond shall be valid for   month/months,   day/days, commencing on the

   day of    (month and year) and expiring on the    day of  (month and year).

3. IT IS AGREED that, subject to subclause (2) of clause 4, where during the period of validity of this Bond or any previous Bond effected by the Investment Business Firm under the Investment Intermediaries Act, 1995 (Commencement and Bonding of Intermediaries) Regulations, 1996, hereinafter in this Bond referred to as "the Regulations", or under the Insurance Act, 1989 . there is or has been an inability or failure on the part of the Investment Business Firm to meet its financial obligations in relation to any sum of money received by the Investment Business Firm from, or on behalf of, its clients in respect of investment business services for the purposes of the Investment Intermediaries Act, 1995 , hereinafter in this Bond referred to as "investment business", or insurance business for the purposes of the Insurance Act, 1989 , hereinafter in this Bond referred to as "insurance business", during such period, the Surety will make available the sum of money referred to in clause I of this Bond upon demand being made on the Surety in respect thereof by the Nominee.

4. (1) Any sum of money made available to the Nominee under this Bond shall be applied by the Nominee—

( a ) subject to subclauses (2) and (3) of this clause, for the benefit of any client of the Investment Business Firm who has incurred loss or liability because of the inability or failure of the Investment Business Firm to meet its financial obligations in relation to any sums of money received by the Investment Business Firm from, or on behalf of, that client in respect of investment business services for the purposes of the Investment Intermediaries Act, 1995 , and insurance business for the purposes of the Insurance Act, 1989 ; and

( b ) to indemnify, with the consent of the Supervisory Authority and up to such sum as may be specified by the Supervisory Authority the Nominee in respect of such reasonable expenses as are incurred in carrying out the functions referred to in paragraph (a) of this subclause.

(2) Subject to subclauses (3) and (4) of this clause, to the extent that loss or liability arises in respect of insurance business, the Nominee shall apply that proportion of the sum of money made available under this Bond for the benefit of any client of the Investment Business Firm who has incurred loss or liability because of the inability or failure of the Investment Business Firm to meet its financial obligations in relation to any sums of money received by the Investment Business Firm from, or on behalf of, such client in respect of insurance business which bears to the sum of money made available under this Bond the same proportion that the loss or liability suffered by clients of the Investment Business Firm in respect of insurance business bears to the total loss or liability suffered by clients of the Investment Business Firm in respect of both insurance business and investment business.

(3) To the extent that loss or liability arises in respect of insurance business, the sum of money to be applied in respect of such loss or liability shall be the amount of the insurance bond which the Investment Business Firm would have been obliged to hold but for Regulation 3 of the Investment Intermediaries Act. 1995 (Bonding of Investment intermediaries) Regulations. 1996 or the amount of the loss or liability arising in respect of insurance business, whichever is the lesser.

(4) The sum of money to be applied in respect of loss or liability incurred by clients in respect of insurance business shall be reduced by the amount A x B + C, where A is the amount of the expenses referred to in subclause 1(b) of this clause, B is the amount of the loss or liability arising in respect of insurance business and C is the amount of the total of the loss or liability arising both in respect of insurance business and in respect of investment business.

(5) Subclause (1)(a) of this clause shall not apply to any sum of money as is referred to therein where any proceeds of a previous bond effected under the Regulations (including, as the case may be, any proceeds of the guarantee provided in respect of it) or under the Insurance Act, 1989 (including, as the case may be. any proceeds of the guarantee provided in respect of it) have been applied for the benefit of the client referred to in the said subclause (1) (a) with respect to the said sum of money.

5. IT IS A CONDITION of this Bond that the Nominee will repay to the Investment Business Firm such part of any sum of money made available to the Nominee under clause 3 of this Bond as shall not be expended for the purposes mentioned in paragraph (a) or (b) of clause 4(1) of this Bond.

GUARANTEE IN RESPECT OF INVESTMENT BUSINESS FIRM'S OBLIGATIONS UNDER FOREGOING CLAUSES.

6. We, (name of person providing guarantee........................................), hereinafter in this Bond referred to as "the Guarantor", having our registered office at..............................................., at the behest of the Investment Business Firm, hereby guarantee that there will be made available by the Investment Business Firm the sum of money referred to in clause I of this Bond upon demand being made on the Investment Business Firm in respect thereof in accordance with clause 3 of this Bond.

7. Any demand under the foregoing guarantee shall be made on the Guarantor by the Nominee in accordance with the Regulations.

8. Clause 4 of this Bond shall apply to the application of any sum of money made available under the foregoing guarantee to the Nominee.

9. IT IS A CONDITION of the foregoing guarantee that the Nominee will repay to the Guarantor such part of any sum of money made available to the Nominee under the guarantee as shall not be expended for the purposes mentioned in paragraph (a) or (b) of clause 4 (1) of this Bond.

10. The Guarantor undertakes—

( a ) to issue to the Investment Business Firm a certified copy of this Bond, and

( b ) in the event of the Investment Business Firm, on the expiry of this Bond, not presenting a new bond to the Guarantor for the purpose of securing a guarantee in respect of the Investment Business Firm's obligations thereunder, to notify the Supervisory Authority and the Minister for Enterprise and Employment in writing of that fact not later than seven days after such expiry (without assuming any duty of care to the Nominee or clients of the Investment Business Firm to ensure that the Supervisory Authority and the Minister for Enterprise and Employment is so notified).

SIGNED BY (signature of Investment Business Firm or member of Investment Business Firm, or, where the Investment Business Firm is a registered company, signature of an officer of the company together with the seal of the company)

Dated this ..................... day of............................................................ ........................... (month and year)

SIGNED BY (signature of an officer of Guarantor together with seal of the Guarantor)

FOR AND ON BEHALF OF (name of Guarantor)

Dated this ....................... day of............................................................ ........................ (month and year)

GIVEN under my Official Seal, this 9th day of February, 1996.

RUAIRÍ QUINN,

Minister for Finance.

EXPLANATORY NOTE.

These Regulations specify the form of bond to be used by authorised investment business firms pursuant to section 51 of the Investment Intermediaries Act, 1995 , including the form of a single bond under section 51 (5) (e) of that Act which satisfies the requirement to be bonded under Part IV of the Insurance Act, 1989 .

Section 51 of the Investment Intermediaries Act was commenced in respect of certain categories of investment business firm and certain categories of investment business services by the Investment Intermediaries Act, 1995 (Commencement) (No. 2) Order, 1996, which was signed by the Minister for Finance on 9 February 1996 and comes into effect on 11 March 1996.

These Regulations will come into effect on 11 March 1996.