OPINION OF THE EUROPEAN MONETARY INSTITUTE
on a consultation from the Irish Department of Finance under Article 109f (6) of the Treaty
establishing the European Community (the “Treaty”) and Article 5.3 of the Statute of the EMI as
elaborated in the Council Decision of 22nd November 1993 (93/717/EC) (the “Decision”) on a proposal
for legislation entitled the Central Bank Bill (the “Bill”) and, specifically, for provisions within the Bill to
amend various sections of the Investment Intermediaries Act, 1995 (the “Intermediaries Act”).
CON/97/02
1. The above consultation was initiated on 10th January 1997 by the Irish Department of Finance,
which requested an opinion of the EMI within one month of receipt of the consultation, i.e. by
20th February 1997.  For this purpose, the Department of Finance submitted relevant provisions
of the Bill, being in the form of Committee Stage Amendments to the text of the Bill, together
with explanatory notes and a copy of the Intermediaries Act.
2. The EMI’s competence to d eliver an opinion is based on Article 1, section 1 of the Decision, as
the Bill relates, inter alia, to the following: the status and powers of the Central Bank of Ireland
(second indent of section 1); and, rules which are applicable to the regulation by the Central
Bank of Ireland of financial institutions and which may have an impact upon the stability of
financial institutions and markets (fifth indent of section 1).
3. The EMI was consulted on a previous draft of the Bill, as a whole, in March 1996 (an d
subsequently issued an opinion relating to that consultation - Reference 96/04 - dated 28th May
1996).  The present consultation is confined to certain new provisions of the Bill, proceeding
from the Committee stages of the Bill, and which concern proposed amendments to the
Intermediaries Act.
4. The proposed amendments to the Intermediaries Act are intended to provide that responsibility
for the regulation of investment business firms, as defined in the Intermediaries Act, shall rest
solely with the Central Bank of Ireland.  The Intermediaries Act presently provides for a split in
competence concerning the regulation of investment business firms.  The Minister for Enterprise
and Employment is the regulatory authority for investment business firms which only provide
services concerning limited categories of investment instruments - particularly Undertakings for
Collective Investment in Transferable Securities and other collective investment scheme
arrangements - and only where such investment business firms have no discretionary control
over client funds or investment instruments.  The Central Bank is currently the regulatory
authority for all other types of investment business firms.
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5. The EMI considers that the proposed amendments to the Intermediaries Act whereby the
Central Bank of Ireland will become the sole regulatory authority for investment business firms
will not adversely affect the stability of financial institutions or financial markets.
6. The EMI also confirms that these proposed amendments  to the Intermediaries Act are not, in
principle, inconsistent with the requirement for independence of central banks, imposed by
Article 107 of the Treaty as reflected in Article 7 of the Statute of the ESCB, nor are they
incompatible with either the Treaty or the Statute of the ESCB (so as to be contrary to the
requirements of Article 108 of the Treaty as reflected in Article 14.1 of the Statute of the
ESCB).  This opinion does not prejudge the rights of the ECB under Article 14.4 of the Statute
of the ESCB.
7 The EMI confirms that it has no objection to this opinion being made public.
12 February 1997