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Amendment of section 28 of Act of 1995 (Obligations on product producers).
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25.—Section 28 of the Act of 1995 is hereby amended—
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(a) by the substitution of the following for subsection (1):
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“(1) A product producer may not appoint an investment product intermediary to act on its behalf in the reception or transmission of orders in units or shares in undertakings for collective investments in transferable securities within the meaning of the Regulations of 1989 and any subsequent amendments thereto, units in a unit trust, other collective scheme instruments, shares in a company or bonds which are listed on a stock exchange, prize bonds, tracker bonds or insurance policies, or in acting as a deposit agent or as a deposit broker or any or all of these, and may not pay any commission, fee or other reward to an investment product intermediary, or accept any orders transmitted by, or any insurance placed by, an investment product intermediary on behalf of a client, unless to the best of the product producer’s knowledge and belief, having caused reasonable enquiry to be made, the investment product intermediary—
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(a) is a certified person, or
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(b) is of good character, and—
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(i) otherwise complies with this Act, and
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(ii) where the product producer is an insurance undertaking, complies with the Insurance Acts.”,
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(b) by the substitution of the following for subsection (2):
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“(2) A product producer may, for the purposes of subsection (1) of this section, assume that an investment product intermediary authorised under section 10 or 13 of this Act as an investment business firm or authorised by a competent authority in another Member State to perform functions corresponding to those of an investment product intermediary is in compliance with this Act and the Insurance Acts.”,
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and
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(c) in subsection (5)—
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(i) by the insertion after “belonging to the client” of “or pay any commission, fee or other reward to the investment business firm”, and
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(ii) by the insertion of the following before paragraph (a):
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“(aa) which, to the best of the product producer’s knowledge and belief, complies with this Act and, if the investment business firm is an insurance intermediary, with the Insurance Acts,”.
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