The inclusion, in the consolidated Regulations, of provisions allowing for a Common Contractual Fund (CCF) now means that <?xml:namespace prefix = st1 ns = "urn:schemas-microsoft-com:office:smarttags" />Ireland is the only country in the European Union where UCITS can be established under all three structures; Corporate, Trust and Contract structures. This legislation follows on from a provision in the Finance Act 2003 to allow for the CCF to be a fiscally transparent vehicle for Irish tax purposes. The availability of the CCF will enable, amongst other things, the establishment in Ireland of an internationally recognised pooled pension structure. It is expected that this contract structure will have a particular appeal to multi-national companies, which operate pension schemes in a number of different jurisdictions for the benefit of employees in those jurisdictions.<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
Commenting on these developments, Gary Palmer, Chief Executive of the Dublin Funds Industry Association noted, "These timely developments re-enforces Irelands commitment to remain to the forefront of the international investment funds arena, and yet again demonstrates the mutual benefit of the government agencies, the regulator and the Industry working together".
The Irish Financial Services Regulatory Authority
The Irish Financial Services Regulatory Authority ("IFSRA"), established on 1 May 2003, is the new regulator of all financial services firms in Ireland. It also has an important role in the protection of the consumers of those firms. As Financial Services Regulator, IFSRA's main tasks are:
* Helping consumers to make informed and responsible decisions on their financial affairs in a safe and fair market; and
* Fostering sound and solvent financial institutions which gives depositors and other consumers of financial products confidence that their deposits and investments are safe.
IFSRA is a distinct component of the Central Bank and Financial Services Authority of Ireland, with clearly defined regulatory responsibilities. These cover all Irish financial institutions including those previously regulated by the Central Bank, Department of Enterprise, Trade and Employment (DETE), Office of the Director of Consumer Affairs (ODCA) and Registrar of Friendly Societies.
IFSRA contributes to the work of the Central Bank in discharging its responsibility in relation to the maintenance of overall financial stability.
Protecting the Consumer
IFSRA has a clear focus on consumer issues. It will strengthen consumer protection and considerably enhance and develop consumer information. There will be a strong focus on transparency, competition and choice for the consumer and it will concentrate on issues such as conduct of business rules and consumer information and education. The Consumer Director, who is a full member of the Authority, will have considerable powers and direct statutory responsibility.
In providing consumer protection, the IFSRA will focus on problem prevention and will:
* Provide consumer information and education through various channels in relation to the costs, risks and benefits
of financial products.
* Monitor competition in the market for financial services by working with the Competition Authority; and
* Promote and be a strong advocate for the interests of consumers of financial products.
It will seek to provide protection to consumers in a number of integrated ways:
Codes of Conduct and their Enforcement
* The introduction of sound conduct of business rules, which oblige financial institutions to act in a fair and transparent manner.
* The policing and enforcement of those codes by on-site inspections, backed-up by enforcement powers.
Consumer Information and Education
* The introduction of consumer awareness programmes that enhance the understanding of the consumer's rights and the public's level of financial knowledge. A focus on life-long learning will form part of our approach.
Industry Education and Competence
* A focus on a well-trained industry with professional training courses and the promotion of continuous professional development.
* The promotion within industry of an understanding of codes of conduct and the importance of consumer protection.
* It will work with the Competition Authority on the development of close monitoring systems for market development and competition.
Motor Insurance Advisory Board
* The implementation of relevant MIAB recommendations, which seek to increase consumer protection in the area of motor insurance.
* It will foster a consumer friendly complaints-handling mechanism by working with the Financial Services Ombudsman.
* It will seek to open appropriate gateways into the financial market for those who are currently excluded and we will work with various government departments and agencies in this regard.
Promoting a Sound Financial System
A fundamental protection for consumers is the solvency and safety of financial institutions. The Financial Services Regulator has a key responsibility in this area by giving confidence to consumers that their deposits and investments are safe and that their claims can be met. In turn, this contributes to a stable financial system and to the reputation and good standing of the Irish financial sector.
The financial services industry is increasingly global in scale and influence. This poses challenges to both the industry and its regulator. Monitoring global financial and economic developments is an important element of our job.
In the short to medium term, the focus of work in this area will be on:
* The refinement of a regulatory approach based on risk profile and impact of default;
* Risk assessment, measurement and control techniques in all sectors of the industry;
* Data collection associated with developing better early warning indicators of prudential stress;
* A programme of on-site inspections.
The Irish Stock Exchange (ISE)
The Irish Stock Exchange is recognised worldwide as a leading centre for listing investment funds and is proving to be a popular listing location for hedge funds.
With over 1,500 funds and 1,800 sub-funds listed as at April 30, 2003, the ISE's combination of effective and prudent regulation, flexibility of approach and efficient and timely processing of listing applications has proved attractive and cost effective. This section provides a background to the listing of investment funds, a guide to listing on the ISE™ and a summary of its listing requirements.
The ISE™ has achieved its leading position in the listing of investment funds because it has a number of key strengths.
Frequently Asked Questions
Can a listed fund restrict the transfer of its shares/units in certain instances? In principle, listed shares/units must be freely transferable. However, the ISE™ accepts the necessity to restrict transfers where the holding of such shares may result in regulatory, pecuniary, legal, taxation or material administrative disadvantage for the fund or its share/unitholders as a whole. In addition, the ISE™ accepts a restriction on transfer to retain a minimum holding per share/unitholder.
Steps to Achieving an Irish Stock Exchange Listing
The listing process comprises the following distinct stages:
As the above list indicates, with firm and flexible regulation, provided by IFSRA, a recognised stock exchange and a whole host of leading fund services providers, Dublin offers a premier EU location for investment funds.