Investment Intermediaries Act, 1995

Interpretation.

2.—(1) In this Act, unless the context otherwise requires—

“approved professional body” has the meaning assigned to it by section 55 of this Act;

“associated undertaking” means an associated undertaking within the meaning of Regulation 34 of the European Communities (Companies: Group Accounts) Regulations, 1992 (S.I. 201 of 1992);

“authorised investment business firm” means an investment business firm which has been authorised by a supervisory authority under section 10 or 13 of this Act or which is deemed to be authorised under Part IV or Part VII of this Act;

“authorisation” means an authorisation granted under section 10 or 13 of this Act, or an authorisation under Part IV or Part VII , unless otherwise specified;

“authorised officer” means a person authorised under section 64 of this Act;

“the Bank” means the Central Bank of Ireland;

“certified person” has the meaning assigned to it by section 55 of this Act;

“the Commission” means the Commission of the European Communities;

“Companies Acts” means the Companies Acts, 1963 to 1990;

“competent authority” means a competent authority in a Member State, for the purposes of Council Directive 77/780/EEC of 12 December, 1977(1) , as amended by Council Directive 89/646/EEC of 15 December, 1989(2) , or for the purposes of Council Directive No. 93/6/EEC of 15 March, 1993(3) , or for the purposes of Council Directive No. 93/22/EEC of 10 May, 1993(3);

“the Court” means the High Court;

“credit institution” means a credit institution within the meaning of Article 1 of Council Directive 77/780/EEC of 12 December, 1977(1) as amended by Council Directive 89/646/EEC of 15 December, 1989(2) but does not include the institutions referred to in Article 2(2) of that Directive;

“deposit” means a deposit with a credit institution and shall be construed as including a shareholding in as well as a deposit with a building society;

“deposit agent” means any person who holds an appointment in writing from a single credit institution enabling him to receive deposits on behalf of that institution and prohibiting him from acting in a similar capacity on behalf of another credit institution;

“deposit broker” means any person who brings together with credit institutions persons seeking to make deposits in return for a fee, commission or other reward;

“director” includes any person occupying the position of director by whatever name called and any person who effectively directs or has a material influence over the business of an authorised investment business firm and includes a shadow director within the meaning of the Companies Act, 1990 ;

“former authorised investment business firm” means an authorised investment business firm whose authorisation has been revoked;

“functions” includes powers and duties;

“home Member State” means—

(a) where the investment business firm or proposed investment business firm is a natural person, the Member State in which the head office of that person is situated, or

(b) where the investment business firm or proposed investment business firm is a legal person, the Member State in which its registered office is situated or, if under its national law it has no registered office, the Member State in which its head office is situated;

“host Member State” means the Member State in which an investment business firm has a branch or provides services;

“incidental manner” has the meaning assigned to it by section 55 of this Act;

“indirect acquisition” shall be construed in accordance with Council Directive 93/22/EEC of 10 May, 1993(1) ;

“indirect disposal” shall be construed in accordance with Council Directive 93/22/EEC of 10 May, 1993(1) ;

“indirect shareholders” shall be construed in accordance with Council Directive 93/22/EEC of 10 May, 1993(1) ;

“indirect subsidiary” shall be construed in accordance with Council Directive 93/22/EEC of 10 May, 1993(1) ;

“investment advice” means the giving, or offering or agreeing to give, to any person, advice on the purchasing, selling, subscribing for or underwriting of an investment instrument or on the making of a deposit or on the exercising of any right conferred by an investment instrument to acquire, dispose of, underwrite or convert an investment instrument or deposit or the giving, or offering or agreeing to give, to any person, advice on choice of a person providing investment business services, but does not include any of the following:

(a) advice given in a newspaper, journal, magazine or other publication, including electronic publications, where the principal purpose of the publication taken as a whole is not to lead persons to invest in any particular investment instrument or deposit or to deal with any particular provider of investment business services,

(b) advice given in a lecture, seminar or similar event or series of such events, where the principal purpose of the event or events taken as a whole is not to lead persons to invest in any particular investment instrument or deposit or to deal with any particular provider of investment business services and where persons engaged in the organisation or presentation of such events will earn no remuneration, commission, fee or other reward as a result of any particular decision, by a person attending such event and arising out of such attendance, in relation to investment instruments or deposits or in relation to the choice of a person providing investment business services,

(c) advice given in sound or television broadcasts where the principal purpose of such broadcasts taken as a whole is not to lead persons to invest in any particular investment instrument or deposit or to deal with any particular provider of investment business services,

(d) advice to undertakings on capital structure, industrial strategy and related matters and advice relating to mergers and the purchase of undertakings,

(e) advice given by persons in the course of the carrying on of any profession or business not otherwise constituting the business of an investment business firm, where the giving of such advice is a necessary part of other advice or services given in the course of carrying on that profession or business, and where the giving of investment advice is not remunerated or rewarded separately from such other advice or services;

“investment business firm” means any person, other than a member firm within the meaning of the Stock Exchange Act, 1995 , who provides one or more investment business services or investment advice to third parties on a professional basis and for this purpose where an individual provides an investment business service and where that service is carried on solely for the account of and under the full and unconditional responsibility of an investment business firm or an insurance undertaking or a credit institution that activity shall be regarded as the activity of the investment business firm, insurance undertaking or credit institution itself;

“investment business services” includes all or any of the following services:

(a) receiving and transmitting, on behalf of investors, of orders in relation to one or more investment instrument;

(b) execution of orders in relation to one or more investment instrument, other than for own account;

(c) dealing in one or more investment instrument for own account;

(d) managing portfolios of investment instruments or deposits in accordance with mandates given by investors on a discretionary client-by-client basis where such portfolios include one or more investment instrument or one or more deposit;

(e) underwriting in respect of issues of one or more investment instrument or the placing of such issues or both;

(f) acting as a deposit agent or deposit broker;

(g) the administration of collective investment schemes, including the performance of valuation services or fund accounting services or acting as transfer agents or registration agents for such funds;

(h) custodial operations involving the safekeeping and administration of investment instruments;

(i) acting as a manager of a designated investment fund within the meaning of the Designated Investment Funds Act, 1985 ;

“investment instruments” includes—

(a) transferable securities including shares, warrants, debentures including debenture stock, loan stock, bonds, certificates of deposits and other instruments creating or acknowledging indebtedness issued by or on behalf of any body corporate or mutual body, government and public securities, including loan stock, bonds and other instruments creating or acknowledging indebtedness issued by or on behalf of a government, local authority or public authority, bonds or other instruments creating or acknowledging indebtedness, certificates representing securities,

(b) non-transferable securities creating or acknowledging indebtedness issued by or on behalf of a government, local authority or public authority,

(c) units or shares in undertakings for collective investments in transferable securities within the meaning of European Communities (Undertakings for Collective Investments in Transferable Securities) Regulations, 1989 ( S.I. No. 78 of 1989 ), and any subsequent amendments thereto, units in a unit trust, shares in an investment company, capital contributions to an investment limited partnership,

(d) financial futures contracts, including currency futures, interest rate futures, bond futures, share index futures and comparable contracts,

(e) commodity futures contracts,

(f) forward interest rate agreements,

(g) agreements to exchange payments based on movements in interest rates, currency exchange rates, commodities, share indices and other financial instruments,

(h) sale and repurchase and reverse repurchase agreements involving transferable securities,

(i) agreements for the borrowing and lending of transferable securities,

(j) certificates or other instruments which confer all or any of the following rights, namely—

(i) property rights in respect of any investment instrument referred to in paragraph (a) of this definition; or

(ii) any right to acquire, dispose of, underwrite or convert an investment instrument, being a right to which the holder would be entitled if he held any such investment to which the certificate or instrument relates; or

(iii) a contractual right (other than an option) to acquire any such investment instrument otherwise than by subscription,

(k) options including—

(i) options in any instrument in paragraphs (a) to (j) of this definition, or

(ii) currency, interest rate, commodity and stock options including index option contracts,

(l) hybrid instruments involving two or more investment instruments,

and includes any investment instrument in dematerialised form, but this definition shall not be construed as applying to

(I) any instrument acknowledging or creating indebtedness for, or for money borrowed to defray, the consideration payable under a contract for the supply of goods or services; or

(II) a cheque or other similar bill of exchange, a banker's draft or a letter of credit; or

(III) a banknote, a statement showing a balance in a current, deposit or savings account or (by reason of any financial obligation contained in it) to a lease or other disposition of property, or an insurance policy;

“investment limited partnership” has the meaning assigned to it by the Investment Limited Partnerships Act, 1994 ;

“Member State” means a Member State of the European Communities;

“the Minister” means the Minister for Finance;

“officer”, in relation to an investment business firm, means a director, chief executive, manager or secretary, by whatever name called and, in relation to an offence, also includes any person who purports to act as an officer of the said investment business firm;

“Official Assignee” has the meaning assigned to it by section 3 of the Bankruptcy Act, 1988 ;

“prescribed” means prescribed by Regulations made by the Minister and cognate words shall be construed accordingly;

“product producer” means a firm, institution, collective undertaking or investment company of the kind referred to in section 26 (1) (i) to (vi) of this Act ;

“proposed investment business firm” means a person who is seeking authorisation from a supervisory authority to be an authorised investment business firm;

“qualifying capital interest” shall have the meaning assigned to it in Regulation 35 of the European Communities (Companies: Group Accounts) Regulations, 1992 ( S.I. No. 201 of 1992 ), and any subsequent amendments thereto;

“qualifying holding” means a direct or indirect holding of shares or other interest in a proposed investment business firm or an authorised investment business firm which represents 10 per cent, or more of the capital or of the voting rights, or any direct or indirect holding of less than 10 per cent, which, in the opinion of a supervisory authority, makes it possible to control or exercise a significant influence over the management of the proposed investment business firm or authorised investment business firm in which a holding subsists;

“qualifying shareholder” means a person who has or controls a qualifying holding ;

“regulated market” means a market within the meaning of Council Directive 93/22/EEC of 10 May, 1993(1) ;

“related undertakings” means—

(a) companies related within the meaning of section 140 (5) of the Companies Act, 1990 , and subsequent amendments thereto, or

(b) undertakings where the business of those undertakings has been so carried on that the separate business of each undertaking, or a substantial part thereof, is not readily identifiable, or

(c) undertakings where the decision as to how and by whom each shall be managed can be made either by the same person or by the same group of persons acting in concert;

“restricted activity investment product intermediary” has the meaning assigned to it by section 26 of this Act;

“statutory functions”, in relation to the Bank, means its functions—

(a) under the Central Bank Acts, 1942 to 1989, and any enactment amending those Acts,

(b) imposed by virtue of the ACC Bank Act, 1992 (Section 4) Regulations, 1992, ( S.I. No. 373 of 1992 ), the ICC Bank Act, 1992 (Section 3) Regulations, 1993, ( S.I. No. 24 of 1993 ), the European Communities (Licensing and Supervision of Credit Institutions) Regulations, 1992, ( S.I. No. 395 of 1992 ), or the European Communities (Consolidated Supervision of Credit Institutions) Regulations, 1992, ( S.I. No. 396 of 1992 ),

(c) under the Unit Trusts Act, 1990 ,

(d) under the Building Societies Act, 1989 ,

(e) under the Companies Act, 1990 ,

(f) under the Trustee Savings Banks Act, 1989 ,

(g) under the Investment Limited Partnerships Act, 1994 ,

(h) under the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 ( S.I. No. 78 of 1989 ), and any instruments amending that instrument,

(i) under the Stock Exchange Act, 1995 ,

(j) under this Act, and

(k) under any other enactment or instrument made under an enactment;

“subsidiary” means a subsidiary undertaking within the meaning of Regulation 4 of the European Communities (Companies: Group Accounts) Regulations, 1992 ( S.I. No. 201 of 1992 ) ;

“supervisory authority” has the meaning assigned to it by section 4 of this Act;

“undertaking” means a body corporate, a partnership, an unincorporated body of persons or a sole trader.

(2) References in this Act to books, records or other documents, or to any of them, shall be construed as including any document or information kept in a non-legible form (whether stored electronically or otherwise) which is capable of being reproduced in a legible form and all the electronic or other automatic means, if any, by which such document or information is so capable of being reproduced and to which the person, whose books, records or other documents (as so construed) are inspected for the purposes of this Act, has access.

(3) References in this Act to “competence” in relation to any director or manager means competence in respect of matters in which such director or manager concerned would be expected to be competent in the discharge of his professional responsibilities.

(4) Where an investment business firm is constituted as an unincorporated body of persons, in this Act—

(a) references to “memorandum and articles of association” or to “memorandum of association” or “articles of association” shall be construed as references to the partnership agreement or other constitutional document of the body of persons concerned,

(b) references to “director” shall be construed as references to every member, officer, partner or other person holding any proprietary voting or other interest in the body of persons concerned and includes any person who effectively directs or has a material influence over the business of the body of persons concerned, and

(c) references to “shareholder” and “qualifying shareholder ” shall be construed as references to any partner, member or other person holding any proprietary, voting or other interest in the body of persons concerned.

(5) In this Act, references to an “employee” and cognate words shall be construed to include references to a person employed under a contract of service or for service and references to a person employed otherwise than under a contract of service or for service.

(6) Notwithstanding subsection (1) of this section, investment business firm shall not include—

(a) a person who provides investment business services only,

(i) to undertakings of which it is a subsidiary or its own subsidiaries or other subsidiaries of the same parent undertaking, or

(ii) where those services consist exclusively in the administration of employee equity participation schemes, or

(iii) in both of these circumstances, or

(b) the Bank or the National Treasury Management Agency or the Minister for Finance, or

(c) firms which provide investment business services consisting exclusively in dealing for their own account on futures or options markets or which deal for the account of other members of those markets or make prices for them and which are guaranteed by clearing members of the same markets, and where responsibility for ensuring the performance of contracts entered into by such firms is assumed by clearing members of the same market, or

(d) An Post (including any postmaster acting on its behalf) or the Prize Bond Company Ltd. or any successor to the Prize Bond Company Ltd. as operator of the Prize Bond scheme, when any of the bodies or persons referred to in this subparagraph is acting as an agent of or otherwise for that purpose on behalf of the Minister or the National Treasury Management Agency, or

(e) insurance undertakings as defined in Article 1 of Council Directive 73/239/EEC(1) or Article 1 of Council Directive 79/267/EEC(2) or undertakings carrying on the reinsurance and retrocession activities referred to in Council Directive 64/25/EEC(3) , or

(f) collective investment undertakings and the depositaries and managers of such undertakings, where they are already subject to regulation by the Bank in the State under its statutory functions, or

(g) persons whose main business is trading in commodities amongst themselves or with producers or professional users of such products and who provide investment business services only for such producers or professional users to the extent necessary for their main business, or

(h) credit institutions which provide investment business services or investment advice and which, in so doing, do not exceed the terms of authorisations under Directive No. 77/780/EEC of 12 December 1977(4) as amended by Council Directive 89/646/EEC of 15 December 1989(5) as amended and extended from time to time.

(7) Notwithstanding subsection (1) of this section, or any provision of Part VII of this Act, a solicitor in respect of whom a practising certificate (within the meaning of the Solicitors Acts, 1954 to 994) is in force shall not be an investment business firm by virtue f the provision in an incidental manner of investment business services or investment advice.

(8) (a) Notwithstanding subsection (7) of this section, the Minister may prescribe that solicitors in respect of whom such practising certificates are in force shall be investment business firms for the purposes of this Act whenever they provide investment business services or investment advice.

(b) The Minister may make a regulation under subsection (8) (a) of this section only where he has formed the view that—

(i) the regulatory regime enforced by the Law Society of Ireland in respect of practising solicitors providing investment business services or investment advice in an incidental manner does not provide sufficiently for the proper and orderly regulation and supervision of such solicitors and the protection of investors, or that the powers of the Law Society of Ireland under its rules or otherwise, or its practice in relation to the supervision of solicitors, are inadequate for this purpose, and

(ii) that it is in the interests of the proper and orderly regulation and supervision of investment business services and investment advice in general and the protection of investors, that such an order be made.

(c) The Minister shall not make a regulation under this subsection unless he has first consulted the Law Society of Ireland, the Bank, the Minister for Justice and the Minister for Enterprise and Employment.

(d) A regulation under this subsection may prescribe that upon the coming into operation of such a regulation, the Law Society of Ireland shall be an approved professional body for the purposes of this Act, whether on an interim basis for such period as the Minister may prescribe or otherwise.

(e) For the purposes of forming a view, under this section, the Minister may appoint any person who the Minister believes is suitably qualified for the purpose to carry out such inquiries or make such inspections as the Minister may request in relation to the operations of the Law Society of Ireland, and the Law Society of Ireland shall co-operate with any such inspection or inquiries, and disclose such information as the person appointed may request.

(f) Where the Law Society of Ireland refuses to co-operate with an inspection or inquiry or to disclose information requested under paragraph (e) of this subsection, the person appointed by the Minister may apply to the Court for an order and the Law Society of Ireland shall comply with any such order which the Court may make.

(g) The Bank may be a person appointed by the Minister for the purposes of paragraph (e) of this subsection.

(1) OJ. No. L.322 17/12/77.

(2) O.J. No. L.386 30/12/89.

(3) O.J. No. L.141 11/6/93.

(1) O. J. No. L.141 11/6/93.

(1) O. J. No. L.141 11/6/93.

(1) O. J. No. L.141 11/6/93.

(1) O. J. No. L.141 11/6/93.

(1) O. J. No. L.141 11/6/93.

(1) OJ. No. L.228 16/8/73.

(2) OJ. No. L.63 13/3/79.

(3) OJ. No. L.56 4/4/64.

(4) OJ. No. L.322 17/12/77.

(5) OJ. No. L.386 30/12/89.