Counter Guarantee Scheme 2017.
Statutory Instruments
Source: Statutory Instruments

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paragraphs: Citation
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paragraphs: Commencement
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paragraphs: Interpretation and Definitions
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paragraphs: Objectives
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paragraphs: Powers of the Minister
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paragraphs: Minister’s Liability
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paragraphs: 1 The Minister will not, in any particular year, counter-guarantee any PFI in such a manner as would result in the aggregate of his or her liabilities in respect of:
(a) all qualifying finance agreements entered into in that year under Section 4 of the Credit Guarantee Act 2012 as amended, and
(b) all qualifying finance agreements entered into in that year under Section 11 of the Credit Guarantee (Amendment) Act 2016
exceeding €15.6 million.
num: 6
paragraphs: 2 The Minister’s liability in respect of credit amounts under qualifying finance agreements due to a finance provider shall not exceed 80% of the credit amounts outstanding to that finance provider.
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paragraphs: 3 All Scheme operators and participating PFIs must report on their liabilities as set out in Section 6.1 to the Minister either on a monthly basis or at more frequent intervals as the Minister requests. This information will be used to maintain a register to ensure the Minister’s liability does not exceed the limit in Section 6.1.
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paragraphs: Other Scheme Requirements
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paragraphs: 1 Management of Guarantees (policies, procedures, supervision.)
The PFI must satisfy the Minister as to its competence in managing the business of giving and administering guarantees both (1) generally and (2) specifically in respect of moneys provided to qualifying enterprises.
The PFI must undertake a credit and risk analysis on a qualifying finance provider prior to concluding a qualifying PFI guarantee agreement and must review any such agreement on an annual basis.
The PFI must ensure at all times that the entry into, supervision, management and administration of a qualifying PFI finance agreement is lawful and conforms to the requirements of its constitution and internal governance arrangements as well as its risk, credit, compliance and other applicable policies.
The PFI must provide that, in relation to pursuing recoveries, a finance provider’s policies and practices do not distinguish between:
(a) credit agreements with that finance provider’s customers that do not benefit from a guarantee under a qualifying PFI guarantee scheme; and
(b) qualifying finance agreements with that finance provider’s customers who are qualifying enterprises benefiting from a guarantee under qualifying PFI guarantee scheme.
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paragraphs: 2 Class/classes of qualifying PFI guarantee scheme
The Scheme shall apply to qualifying PFI guarantee schemes which support the provision of credit to qualifying enterprises that are based in Ireland and who have their principle activities based in Ireland.
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paragraphs: 3 Purpose of Scheme
The purpose of the Scheme is to enhance the ability of qualifying PFIs to achieve one or more of the following objectives:
(a) to increase the amount of credit available to qualifying enterprises;
(b) to reduce the cost of credit to qualifying enterprises; and
(c) to reduce the level of conditionality attaching to credit available to qualifying enterprises.
This will be accomplished by providing a Ministerial counter guarantee with respect to qualifying schemes by PFIs
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paragraphs: 4 Conditions of Scheme
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paragraphs: 4.1 Each qualifying PFI guarantee scheme must state clearly what conditions apply to it, including conditions relating to how the finance provider will achieve the purpose of the Scheme and assist the intended beneficiary qualifying enterprises.
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paragraphs: 4.2 A qualifying PFI guarantee scheme will also specify the type of finance agreements, finance providers and financial products to apply to that scheme.
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paragraphs: 4.3 Each qualifying PFI guarantee agreement must require the finance provider to (i) adhere to the Central Bank (Supervision and Enforcement) Act 2013 (Lending to Small and Medium-Sized Enterprises) Regulations 2015 ( S.I. No 585 of 2015 ) (the “Regulations”) if the finance provider is a regulated entity as defined in the Regulations, (ii) adhere to the spirit of the Regulations, if it is not and (iii) act reasonably and fairly in all circumstances.
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paragraphs: 4.4 The maximum value of financial products that may be provided pursuant to finance agreements entered into between finance providers and qualifying enterprises that are subject to qualifying guarantee agreements to which the counter guarantee under the Scheme applies may not exceed €500,000,000.
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paragraphs: 4.5 The Minister’s liability under the Scheme may not exceed the limit referred to in Section 6.1.
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paragraphs: 4.6 The PFI must not conclude a qualifying PFI guarantee agreement unless the Minister has confirmed that the Minister’s liability under such agreement does not exceed the limit referred to in Section 6.1
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paragraphs: Termination
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paragraphs: Term
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paragraphs: Premium
num: 10
paragraphs: 1 The participating PFI must pay the Minister a premium in respect of his counter guarantee determined by the Minister on the basis of:
(i) the expenses to be incurred in relation to the Scheme; and
(ii) the objectives of the Scheme.
In determining the expenses as referred to in paragraph (i), the Minister shall have regard to the following:-
(a) the size and quality of the qualifying enterprises benefiting from the Scheme,
(b) the risks associated with those qualifying enterprises,
(c) the typical risks associated with the business sector or sectors to which those qualifying enterprises belong,
(d) the duration of guarantees given under the Scheme,
(e) the duration of the counter guarantees given under the Scheme.
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paragraphs: 2 The Premium payable by the PFI as determined by the Minister under Section 10.1 shall not exceed 2% per annum of the outstanding credit amount of the relevant PFI finance agreement (the “Cap”).
This Premium will be set out in the qualifying PFI finance agreement detailing the amount and the frequency of the payments.
The Premium shall be assessed and collected by the Minister over the term of each guarantee given pursuant to Section 6.1.
The Premium shall be used by the Minister only to defray the costs of the Scheme.
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paragraphs: Data Protection