Opinion of the European Monetary Institute on a consultation from the the Irish Roinn Airgeadais (Department of Finance) under Article 109f (6) of the Treaty establishing the European Community and Article 5.3 of the Statute of the EMI; on a draft scheme for a Proposed Investment Intermediaries Bill (the “Bill”) (CON/95/4)
Date: 1995-03-30
Institutions: European Monetary Institute
Subjects: European System of Central Banks, Ireland, central bank, financial stability, financial supervision, investment company, securities

  OPINION OF THE EUROPEAN MONETARY INSTITUTE

on a consultation from the  the Irish Roinn Airgeadais (Department of Finance)  under Article 109f (6)

of the Treaty establishing the European Community and Article 5.3 of the Statute of the EMI;

on a draft scheme for a Proposed Investment Intermediaries Bill (the “Bill”).

CON/95/4

1

The  present  consultation  was  initiated  on  16th  February  1995  by  the  Irish  Department  of

Finance,  which, for this purpose, transmitted to the EMI through the Central Bank of Ireland the

draft  Bill,  together  with  an  explanatory  memorandum.  The  EMI  received  the  consultation  on

23rd  February  1995.  Pursuant  to  Article  4  of  the  Council  Decision  of  22nd  November  1993

(93/717/EC)  on  consultation  of  the  European  Monetary  Institute  by  authorities  of  the  Member

States on draft legislative provisions, the EMI has been asked to deliver its opinion by the end of

March 1995.

2

The main purpose of the Bill is to implement the EU Investment Services Directive (93/22/EEC),

and  to  establish  a  regulatory  and  supervisory  authority  for  Irish  investment  firms  (“Investment

business  firms”  in  the  wording  of  the  Bill).  The  Central  Bank  of  Ireland  (the  Bank)  and  the

Minister  for  Enterprise  and  Employment  will  be  the  “supervisory  authorities”  for  investment

business firms, and will be competent, inter alia, for authorising, supervising and regulating these

undertakings and for certain aspects concerning auditors and employees of these undertakings.

Article  2.2  of  EU  Council  Decision  of  22nd  November  1993  (93/717/EC)  exempts  draft

provisions  aimed  exclusively  at  the  transposition  of  Community  directives  into  the  law  of

Member States from the EMI consultation procedure. The Bill contains a number of provisions

concerning issues other than the implementation of the Investment Services Directive. The Bill

contains provisions affecting firms that are not investment firms under the Investment Services

Directive. The status and powers of a national central bank in the sense of Article 1.1, second

indent, of EU Council Decision of 22nd  November  1993  (93/717/EC)  are  affected.  Legislative

provisions establishing a supervisory regime for financial institutions may also be included within

the fifth indent of Article 1.1 of the above Council decision. Thus, the present consultation is a

compulsory step and the EMI is competent to deal with this consultation.

- 2 -

Nevertheless,  in  accordance  with  the  criteria  of  Article  2.2  of  the  mentioned  EU  Council

decision, this opinion will not address those parts of the Bill aimed solely at the implementation of

the  Investment  Services  Directive,  and  this  opinion  should  not  be  understood  as  the  EMI’s

advice on the consistency of the Bill with the Investment Services Directive.

3

The  institutional  organisation  of  prudential  supervision  differs  throughout  the  European  Union.

Attribution  to  central  banks  of  tasks  in  the  field  of  supervision  of  investment  firms  is  not  a

common  feature  in  the  institutional  organisation  of  prudential  supervision  and  regulation  in  the

Member  States,  but  that  attribution  is  consistent  with  Articles  14.4  of  the  Statute  of  the

ESCB/ECB and 105.5 of the Treaty.

4

Finally, those parts of the Bill that contain provisions other than those whose exclusive purpose is

the implementation of the Investment Services Directive do not give rise to any specific issues

which need to be addressed in this opinion.

March 30th 1995.