PART III

Regulation and Supervision of Investment Business Firms

20. —(1) Subject to such guidelines in this regard as may be issued by the Minister in the interests of the proper and orderly regulation and supervision of investment business firms and the protection of investors and notified to a supervisory authority in writing and published, from time to time, in the Iris Oifigiúil, supervisory authorities shall administer the system of regulation and supervision of investment business firms in accordance with the provisions of this Act in order to promote—

(a) the maintenance of the proper and orderly regulation and supervision of investment business firms or of financial markets, or both, and

(b) the protection of investors.

(2) Where a supervisory authority is of the opinion that it is necessary in the interests of assessing the capacity of an investment business firm to engage in an activity for which it has sought authorisation or for which it stands authorised under section 13 of this Act, it may commission an independent assessment of the capacity of the proposed investment business firm or of the authorised investment business firm.

(3) Subject to subsection (4) of this section, the Minister may, after consulting with the supervisory authorities, prescribe the fee to be paid to a supervisory authority by a proposed investment business firm or by an investment business firm supervised by it and the Minister may prescribe different fees for different classes of investment business firms.

(4) Regulations under this section may provide for such incidental or related matters as are, in the opinion of the Minister, necessary to give effect to such fees and where the Minister proposes to prescribe a fee under subsection (3) of this section he shall—

(a) publish details of the proposed fee where the fee is in respect of an application for authorisation, and

(b) consider any representations made to him within a reasonable period, being not less than two months after the date of such publication, as he shall specify at the time of publication.

(5) Notwithstanding any other provisions of this Act a supervisory authority shall co-operate with the other supervisory authority in the State and when acting as a competent authority shall co-operate with the competent authorities in other Member States so that the responsibilities of each supervisory and competent authority may be more effectively discharged.

(6) Without prejudice to the generality of subsection (1) of this section or to the powers of a supervisory authority under sections 19 and 65 of this Act, a supervisory authority acting as a competent authority may verify, at the request of a competent authority in another Member State, that any investment business firm authorised by that competent authority is complying with the relevant regulatory requirements imposed by that competent authority or by the home Member State of such an investment business firm.

(7) A competent authority in another Member State authorised in that Member State to supervise investment business firms may, having notified the supervisory authorities, inspect or investigate the business of an investment business firm supervised by that authority which has a place of business in the State at that place of business or otherwise for the purpose of verifying any information of the type referred to in Article 23(3) of Council Directive 93/22/EEC of 10 May, 1993(1) in any one of the following manners—

(a) by inspection of the investment business firm, at that place of business or otherwise, by the authority concerned,

(b) by inspection of the investment business firm, at that place of business or otherwise, by a person authorised in that behalf by the authority concerned, or

(c) by a request from the authority concerned to a supervisory authority to carry out the inspection on its behalf of the place of business or otherwise.

21. —(1) Without prejudice to the power of a supervisory authority to impose conditions or requirements or both under this Act, and, without prejudice to the powers of a supervisory authority under subsections (2) or (4) of this section, where a supervisory authority considers it necessary to do so in the interests of the proper and orderly regulation and supervision of investment business firms of the protection of investors, the supervisory authority may give a direction to all or any of the following, namely—

(a) any or all authorised investment business firms,

(b) any or all proposed investment business firms,

(c) any or all investment business firms,

(d) any or all former authorised investment business firms,

(e) directors and those responsible for the management of authorised investment business firms,

(f) any person purporting to act or whom the supervisory authority reasonably believes is acting as an investment business firm,

in relation to any matter related to the operation of an investment business firm or any matter related to an acquiring transaction within the meaning of section 38 of this Act.

(2) Without prejudice to the powers of a supervisory authority under subsection (1) of this section, and without prejudice to the powers of a supervisory authority to impose conditions or requirements or both under this Act, where a supervisory authority is of the opinion that it is necessary to do so in the interests of the proper and orderly regulation and supervision of investment business firms or for the protection of investors or both or where an investment business firm—

(a) has become or is, in the opinion of the supervisory authority, likely to become unable to meet its obligations to its creditors or its clients or both, or

(b) is not maintaining or is, in the opinion of the supervisory authority, unlikely to be in a position to maintain adequate capital resources having regard to the volume and nature of its business, or no longer complies with capital or other financial requirements specified by the supervisory authority from time to time, or both, or

(c) has failed to comply with any condition or requirement imposed under this Act, and the circumstances are such that the supervisory authority is of the opinion that the stability or soundness of an investment business firm is materially affected by this failure, or

(d) is conducting business in such a manner as to jeopardise or prejudice monies or investment instruments held by or controlled by it on behalf of clients, or the rights and interests of those clients,

the supervisory authority may give a direction in writing to the investment business firm concerned to suspend for such period (not exceeding twelve months) as shall be specified in the direction any or all of the following, that is to say—

(i) the provision of any investment business service or services or the provision of any investment advice,

(ii) the making of payments to which subparagraph (i) of this subsection does not relate,

(iii) the acquisition or disposal of any assets or liabilities,

(iv) entering into transactions or agreements of any specified kind or entering into them except in specified circumstances or to a specified extent,

(v) soliciting business from persons of a specified kind or otherwise than from such persons or in a specified country,

(vi) carrying on business in a specified manner or otherwise than in a specified manner,

which have not been authorised by the supervisory authority.

(3) A direction under subsection (1) or (2) of this section may be given to a particular person or generally to all persons to whom those subsections apply or to a particular class of person or during a specified period of time or times, or by reference to any other matter which the supervisory authority may consider appropriate.

(4) The First Schedule to this Act shall apply as respects a direction by the supervisory authority under this section.

(5) Where a supervisory authority gives a direction under this section, which said direction shall have immediate effect, the supervisory authority may or, where the supervisory authority is of the opinion that the said direction is not being complied with, the supervisory authority shall apply to the Court in a summary manner for an order confirming the direction.

(6) The Court may, on an application being made under subsection (5) of this section, hear evidence from creditors and the Court may make, in any application under this section, such interim or interlocutory order, if any, as it considers fit.

(7) While a direction under this section is in force, no winding-up proceedings in relation to an authorised investment business firm or associated or related undertaking or, in the case of an authorised investment business firm or associated or related undertaking which is constituted as an unincorporated body of persons, no proceedings for an order of dissolution, or, in the case of an authorised investment business firm which is constituted as a sole trader, no bankruptcy proceedings, may be commenced or resolution for winding-up passed in relation to the authorised investment business firm or associated or related undertaking, and no receiver shall be appointed over the assets or over any part of the assets of the authorised investment business firm or associated or related undertaking and such assets shall not be attached, sequestered or otherwise distrained except with the prior sanction of the Court.

(8) The Court may hear proceedings or part of proceedings under this section otherwise than in public.

(9) A creditor who is affected by a direction under subsection (2) of this section may apply to the Court to vary or set aside that direction where it affects the interests of the creditor to a material degree.

22. —(1) Notwithstanding section 215 of the Companies Act, 1963, a supervisory authority may, by presenting a petition, apply to the Court to have an authorised investment business firm or former authorised investment business firm wound up on any of the following grounds, namely that—

(a) an authorised investment business firm or former authorised investment business firm is or, in the opinion of the supervisory authority, may be unable to meet its obligations to its clients or creditors,

(b) the authorisation of the investment business firm has been revoked and the former authorised investment business firm has ceased to operate as an investment business firm,

(c) the supervisory authority considers that it is in the interest of the proper and orderly regulation and supervision of investment business firms or is necessary for the protection of investors that the authorised investment business firm or former authorised investment business firm be wound up,

(d) an authorised investment business firm or a former authorised investment business firm has failed to comply with any direction given by the supervisory authority under this Act.

(2) Where the petition for the winding-up of an authorised investment business firm or former authorised investment business firm is presented by a person other than the supervisory authority, a copy of the petition shall be served on the supervisory authority which shall be entitled to be heard on the petition.

(3) Where an authorised investment business firm or former authorised investment business firm is being wound up voluntarily and the supervisory authority has reason to believe that any of the grounds set out in subsection (1) of this section applies, then, the supervisory authority may apply to the Court to have that investment business firm wound up by the Court.

(4) Where an authorised investment business firm or former authorised investment business firm is being wound up and the supervisory authority is not a creditor any notice or document, by whatever name called, which is required to be sent to a creditor of the authorised investment business firm or former authorised investment business firm shall be sent also to the supervisory authority.

(5) An officer of the supervisory authority, or any other person, duly appointed in writing in that behalf by the Minister for Enterprise and Employment or the Governor of the Bank or by an officer designated by that Minister or that Governor for the purpose of appointing persons under this section, may attend any meeting of creditors of an authorised investment business firm or former authorised investment business firm.

(6) (a) The Minister for Enterprise and Employment or the Governor of the Bank, or an officer designated by the said Minister or Governor for that purpose, may appoint in writing an officer of a supervisory authority or any other person to be a member of any committee of inspection appointed under section 233 or 268 of the Companies Act, 1963, in respect of the authorised investment business firm or former authorised investment business firm.

(b) A person duly appointed under paragraph (a) of this subsection shall neither be counted in computing the minimum or maximum numbers of members of such a committee prescribed under the Companies Acts, nor be removed from membership of the committee without the consent of the supervisory authority.

(7) The rules of Court relating to the winding-up of companies shall, pending the making of rules of Court for the purposes of this subsection, apply for such purposes with such adaptations as may be necessary.

(8) In the case of an authorised investment business firm or a former authorised investment business firm which is constituted as an unincorporated body of persons, the supervisory authority may apply by petition to the Court for a decree of dissolution and for that purpose, section 35 of the Partnership Act, 1890, shall extend to the supervisory authority and shall apply as if the grounds specified in subsection (1) (a) to (d) of this section were incorporated therein.

(9) In the case of an authorised investment business firm or a former authorised investment business firm which is constituted as an individual person, the supervisory authority may apply by petition to the Court for an adjudication of bankruptcy within the meaning of the Bankruptcy Act, 1988 , and the Bankruptcy Act, 1988 shall apply as if the grounds specified in subsection (1) (a) to (d) of this section were acts of bankruptcy (within the meaning of the Bankruptcy Act, 1988 ).

23. —(1) Any person who causes to be advertised, or supplies, or offers to supply, investment business services or investment advice, or makes any other solicitation in respect of investment business services or investment advice or who holds himself out to be an investment business firm, where the provision of such services or advice would be an offence under section 9 of this Act shall be guilty of an offence.

(2) Without prejudice to the generality of any section of this Act empowering a supervisory authority to impose conditions or requirements, or both, a supervisory authority may impose such conditions or requirements or both, on the investment business firm concerned in respect of advertising by that investment business firm as the supervisory authority considers necessary, in the interests of—

(a) the orderly and proper regulation and supervision of authorised investment business firms, or

(b) the protection of investors.

(3) A supervisory authority may impose a requirement on an investment business firm or all investment business firms to publish specified information or to display specified information at their premises.

(4) The Minister may prescribe information to be displayed by an authorised investment business firm at its premises.

(5) (a) If, with respect to any investment business firm, a supervisory authority considers it expedient to do so, in the interest of the proper and orderly regulation and supervision of investment business firms or the protection of investors, the supervisory authority may give such investment business firm a direction in relation to the content and form of any advertisement or other means of soliciting client money or investment instruments or business or in relation to the content and form of any advertisement relating to any service provided or business being undertaken by the investment business firm, or to withdraw an advertisement or to cease advertising.

(b) Without prejudice to the generality of paragraph (a) of this subsection, a direction under this section may do all or any of the following—

(i) prohibit the issue by the investment business firm of advertisements of all descriptions or any specified description,

(ii) require the investment business firm to modify advertisements of a specified description in a specified manner,

(iii) prohibit the issue by the investment business firm of any advertisements which are, or are substantially, repetitions of a specified advertisement,

(iv) require the investment business firm to withdraw any specified advertisement or any advertisement of a specified description,

(v) require the investment business firm to include specified information in any advertisement to be published by it or on its behalf or in any statement to the public to be made by it or on its behalf.

(6) If, in contravention of subsection (1) of this section or in contravention of a direction under this section, a person issues, or causes to be issued, an advertisement inviting persons to enter or offer to enter into an investment agreement or containing information calculated to lead directly or indirectly to persons doing so, then, subject to subsection (9) of this section—

(a) he shall not be entitled to enforce any agreement to which the advertisement related and which was entered into after the issue of the advertisement, and

(b) the other party shall be entitled to recover any money or other property or investment instruments paid or transferred by him under the agreement, together with compensation for any loss sustained by him as a result of having paid money or transferred property or investment instruments under the agreement.

(7) If, in contravention of subsection (1) of this section, or in contravention of a direction issued under this section, a person issues or causes to be issued an advertisement inviting persons to exercise any rights conferred by an investment or containing information calculated to lead directly or indirectly to persons doing so, then, subject to subsection (8) of this section—

(a) that person shall not be entitled to enforce any obligation to which a person is subject as a result of any exercise by him after the issue of the advertisement of any rights to which the advertisement related, and

(b) such a person shall be entitled to recover any money or other property or investment instruments paid or transferred by him under any such obligation, together with compensation for any loss sustained by him.

(8) The compensation recoverable under subsection (6) or (7) of this section shall be such as the parties may agree or as the Court may, on the application of either party, determine.

(9) The Court may allow any such agreement or obligation as is mentioned in subsection (6) or (7) of this section to be enforced or money or property or investment instruments paid or transferred under it to be retained if it is satisfied—

(a) that the person against whom enforcement is sought or who is seeking to recover the money or property or investment instruments was not influenced, or not influenced to any material extent, by the advertisements in making his decision to enter into the agreement or as to the exercise of the rights in question, or

(b) that the advertisement was not misleading as to the nature of the investment, the terms of the agreement or, as the case may be, the consequences of exercising the rights in question and fairly stated any risks involved in those matters.

(10) Where a person elects not to perform an agreement or an obligation which by virtue of subsection (6) or (7) of this section is unenforceable against him or by virtue of either of those subsections recovers money paid or other property or investment instruments transferred by him under an agreement or obligation, he shall repay any money and return any other property or investment instruments received by him under the agreement or, as the case may be, as a result of exercising the rights in question.

(11) Where any property or investment instruments transferred under an agreement or obligation to which subsection (6) or (7) of this section applies has passed to a third party the references to that property or investment instruments in this section shall be construed as references to its value at the time of its transfer under the agreement or obligation.

(12) If an advertisement or other solicitation to which this section relates is published and it does not include the name and address of the person who arranged with the publisher for the advertisement or solicitation, a supervisory authority may, at any time within the period of 12 months after any publication of the advertisement or solicitation, request the publisher to supply the name and address of that person to the supervisory authority and the publisher shall forthwith comply with that request.

(13) A supervisory authority may—

(a) direct a person to arrange the publication of a correction of a misleading advertisement concerning services of investment business firms, or

(b) direct a person to arrange the publication of a correction of an advertisement which contravenes the provisions of this section, or

(c) direct a person to arrange the publication of the fact that an offence under this section has taken place and that a fine, if any, has been imposed, or

(d) direct a person to arrange the publication of the fact that a determination that there has been a breach of a condition or requirement under this section has been made under section 74 of this Act, or

(e) arrange the publication of an advertisement correcting any misleading aspects of advertisements, published by an investment business firm,

in a manner specified by the supervisory authority.

(14) In this section “specified” means specified in a direction under this section.

(15) Any person who fails to comply with a direction or a prescription imposed under subsections (4), (5) or (13) of this section, or who fails to comply with a request of a supervisory authority under subsection (12) of this section, shall be guilty of an offence.

24. —(1) Section 23 of this Act shall not apply to a class of advertisement specified from time to time by a supervisory authority for the purpose of exempting from that section—

(a) advertisements appearing to a supervisory authority to have a private character, whether by reason of a connection between the person issuing them and those to whom they are issued or otherwise, or

(b) advertisements appearing to a supervisory authority to deal with investments only incidentally, or

(c) advertisements issued to persons appearing to a supervisory authority to be sufficiently expert to understand any risks involved.

(2) An exemption under subsection (1) of this section shall be subject to such conditions as may be specified by a supervisory authority when granting the exemption.

⁽¹⁾ O.J. No. L.141 11/6/93.