Bill to address issues in financial services sector

The Government has published legislation to address a series of issues in the financial services sector. The Investment Funds, Companies and Miscellaneous Provisions Bill 2006 will facilitate everything from the raising of the audit exemption threshold to the short-term appointment of a director of consumer affairs.

It will also facilitate the introduction of several key pieces of EU legislation.

"The Bill addresses a number of important issues in the company law and related areas," said the Minister for Trade and Commerce, Michael Ahern.

"The changes proposed are designed to facilitate business development, copperfasten our competitiveness in key sectors where it has been developed and ease the regulatory burden on business," he added.

The Bill fulfils a Government commitment to raise the threshold at which Irish companies will have to undergo an external audit.

Under the legislation, companies with a turnover of less than €7.3 million will be exempt from such audits. This brings the Irish threshold into line with the maximum permitted under EU law and to the situation in Northern Ireland.

The move was last night welcomed by the Institute of Chartered Accountants in Ireland (ICAI), which has lobbied strongly on the issue. "ICAI is pleased to see the Government move so quickly to deliver on this key recommendation of the Small Business Forum," ICAI president Pat Costello said.

The Bill also opens the way for the mandatory dematerialisation of securities, a move that will see the end of paper share certificates. It enables the Minister to introduce regulations to switch all share ownership to electronic form.

The Department of Enterprise, Trade and Employment says that this will bring Irish practice into line with international norms and should assist greater ownership of Irish-listed stocks by foreign investors.

The Irish Stock Exchange has been consulting all parties on such a move.

Other elements of the Bill will amend the law relating to the liability of a guarantor for a statement made in a company prospectus. These will limit that liability in certain cases

The transposition of provisions of two recent EU directives - the Transparency Directive and the Takeovers Directive - will also be facilitated by measures within the Bill.

It also amends the Consumer Information Act 1978 to allow the appointment of a director of consumer affairs on a temporary basis, pending the establishment on a statutory basis of the National Consumer Agency.