S.I. No. 28/1996 - Investment Intermediaries Act, 1995 (Commencement) (No. 2) Order, 1996.

S.I. No. 28 of 1996.

INVESTMENT INTERMEDIARIES ACT, 1995 (COMMENCEMENT) (NO. 2) ORDER, 1996.

I, RUAIRÍ QUINN, Minister for Finance, in exercise of the powers conferred on me by section 1 of the Investment Intermediaries Act, 1995 (No. 11 of 1995), hereby order as follows:

1. This Order may be cited as the Investment Intermediaries Act, 1995 (Commencement) (No. 2) Order, 1996.

2. In this Order, unless the context otherwise requires:

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

"deposit agent" has the same meaning as it has in the Investment Intermediaries Act, 1995 ;

"institutional investor" means a client of an authorised investment business firm which is a product producer or an insurance undertaking or an undertaking for collective investment in transferable securities or a pension fund or a collective investment undertaking the manager of which is an authorised investment business firm;

"insurance undertaking" means an insurance undertaking 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⁾;

⁽¹⁾O.J. No. L.228 16-8-1973.

⁽²⁾O.J. No. L.63 13-3-1979.

⁽³⁾O.J. No. L.56 4-4-1964.

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

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

"product producer" means

( a ) investment firms authorised in accordance with Directive 93/22/EEC of 10 May, 1993⁽⁴⁾ by a competent authority of another Member State, or an authorised investment business firm, not being a restricted activity investment product intermediary, or a certified person within the meaning of the Investment Intermediaries Act, 1995 , or a member firm, within the meaning of the Stock Exchange Act, 1995 , in the State;

⁽⁴⁾O.J. No. L.141 11—6-1993.

( b ) credit institutions authorised in accordance with Directives 77/780/EEC of 12 December 1977⁽⁵⁾ and 89/646/EEC of 15 December, 1989⁽⁶⁾;

⁽⁵⁾O.J. No. L.322 17—12-1977.

⁽⁶⁾O.J. No. L.386 30—12-1989.

( c ) such other branches of investment business firms or credit institutions authorised in a third country as the supervisory authority within the meaning of the Investment Intermediaries Act, 1995 may approve from time to time;

( d ) collective investment undertakings authorised under the law of a Member State of the European Union to market units in collective investments to the public, and the managers of such undertakings;

( e ) investment companies with fixed capital as defined in Article 15(4) of Directive 77/91/EEC of 13 December 1976⁽⁷⁾ the securities of which are listed or dealt in on a regulated market in a Member State;

⁽⁷⁾O.J. No. L.26 30—1-1977.

(f) the Prize Bond Company Ltd. or any successor to it as operator of the Prize Bond scheme;

"professional investor" means a client of an investment business firm which is

( a ) an individual or

( b ) a corporate body which is permitted to draw up abridged balance sheets under Article 11 of the Fourth Council Directive (78/660/EEC) of 25 July 1978 based on Article 54(3)(g) of the Treaty on the annual accounts of certain types of companies⁽⁸⁾, as amended by Directive 94/8/EC⁽⁹⁾,

⁽⁸⁾O.J. No. L.222 14—8-1978.

⁽⁹⁾O.J. No. L.82 25—3-1994.

which the investment business firm can show has sufficient and appropriate expertise in investment instruments to be so categorised and which has acknowledged in writing being made aware of the consequences of being categorised as a professional investor;

"restricted activity investment product intermediary" has the same meaning as it has in the Investment Intermediaries Act, 1995 .

3. The Investment Intermediaries Act, 1995 , shall come into operation on the first day of April, 1996 in respect of member firms of the Irish Stock Exchange Limited.

4. (1) Section 51 of the Investment Intermediaries Act, 1995 , shall come into operation on the 11th day of March, 1996 other than in respect of—

( a ) authorised investment business firms to which the Minister for Finance has given a certificate under section 39B (inserted by the Finance Act, 1987 ) of the Finance Act, 1980 ;

( b ) authorised investment business firms which are members of a compensation scheme under which a sum of money not less than 90% of the amount of the loss or liability incurred by clients of the authorised investment business firm or 20,000 Ecu, whichever is the lesser, is payable to a client of an authorised investment business firm where that client incurs loss or liability because of the inability or failure of the authorised investment business firm to meet its financial obligations in relation to any sums of money received from, or on behalf of, its clients in respect of investment business services;

( c ) authorised investment business firms which provide investment business services to professional investors and institutional investors only;

( d ) restricted activity investment product intermediaries who provide no investment business service other than acting as a deposit agent where the credit institution from which the restricted activity investment product intermediary holds an appointment in writing to act as a deposit agent has undertaken to indemnify the clients of that restricted activity investment product intermediary in respect of any loss or liability incurred by those clients because of the failure of that restricted activity investment product intermediary to meet its financial obligations in relation to any sums of money received from, or on behalf of, its clients in the course of its business as a deposit agent;

( e ) investment business services provided only to professional and institutional investors; and

( f ) investment business services provided by a deposit agent, in respect of which the credit institution from which that deposit agent holds an appointment in writing to act as a deposit agent has undertaken to indemnify the clients of that deposit agent in respect of any loss or liability incurred by those clients as a result of the failure of that deposit agent to meet its financial obligations in relation to any sums of money received from, or on behalf of, its clients in the course of its business as a deposit agent.

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

RUAIRÍ QUINN,

Minister for Finance.

EXPLANATORY NOTE.

This Order commences, from 11 March, 1996, section 51 of the Investment Intermediaries Act, 1995 , other than in respect of authorised investment business firms to which the Minister for Finance has given a certificate under section 39B of the Finance Act, 1980 , authorised investment business firms which are members of a compensation scheme, authorised investment business firms which provide investment business services to professional and institutional investors only or that part of their investment business service which covers professional and institutional investors only and restricted activity investment product intermediaries who provide no investment business services other than acting as a deposit agent and, in respect of deposit agent business, investment intermediaries who provide investment business services including acting as a deposit agent.

The Order also commences the Investment Intermediaries Act, 1995 in respect of member firms of the Irish Stock Exchange Limited, with effect from 1 April 1996.