LegalizeS.I. No. 60/2007 - European Communities (Markets in Financial Instruments) Regulations 2007
This is the act as published. Later amendments are not folded into the text below: each one is a separate act in this repository and an entry in this law's history.
14 amending acts · 2017-08-18, S.I. No. 375/2017 - European Union (Markets in Financial Instruments) Regulations 2017
STATUTORY INSTRUMENT
S.I. No. 60 OF 2007
REGULATIONS
entitled
European Communities (Markets in Financial Instruments) Regulations 2007
I, BRIAN COWEN, Minister for Finance, in exercise of the powers conferred on me by section 3 of the European Communities Act 1972 (No. 27 of 1972), as amended by the European Communities (Amendment) Act 1993 (No. 25 of 1993), for the purpose of giving effect to Directive 2004/39/EC, dated 21 April 2004, of the European Parliament and of the Council as amended by Directive 2006/31/EC of 5 April 2006 and Directive 2006/73/EC of 10 August 2006, hereby make the following Regulations:
Part 1 - Preliminary and General Provisions
Citation and commencement
1.
1. (1) These Regulations may be cited as the European Communities (Markets in Financial Instruments) Regulations 2007.
- (2) These Regulations come into operation on 1 November 2007.
Part 2 - Definitions and Scope
Object and scope of these Regulations
2.
2. (1) The object and scope of these Regulations is to give effect to -
- (a) Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments, as amended by Directive 2006/31/EC of 5 April 2006, as regards certain deadlines and
- (b) Directive 2006/73/EC of 10 August 2006 as regards organisational requirements and operating conditions for investment firms and defined terms for Directive 2004/39/EC.
- (2) The following provisions shall also apply to credit institutions authorised under Directive 2006/48/EC, when providing one or more investment services:
- (a) Regulations 4, 5(2), 31, 33 and 41,
- (b) Part 7 (excluding Regulation 109),
- (c) Part 8,
- (d) Part 9 (excluding Regulations 123(2) to (6), 124(1) to (6), 125(1) to (5) 127(1) to (5) and (7) to (8);
- (e) Part 12 and Part 13; and
- (f) Regulations 134, 138 and 139.
Interpretation
3.
3. (1) In these Regulations, except where the context otherwise requires -
“ancillary services” means the services specified in Part 2 of Schedule 1;
“authorised investment firm” means an investment firm which -
- (a) is deemed to be authorised under Regulation 6, or
- (b) is authorised by the Bank under Regulation 11;
“authorised officer” means a person authorised under Regulation 164;
“Bank” means the Central Bank and Financial Services Authority of Ireland;
“branch” means a place of business, other than the head office, which place of business -
- (a) is a part of an investment firm,
- (b) has no legal personality,
- (c) provides investment services, and
- (d) may also perform ancillary services for which the investment firm has been authorised
and includes all of the places set up in the State that under paragraph (5) are to be regarded as a single branch;
“client” means any natural or legal person to whom an investment firm provides investment services, ancillary services or both;
“close link” means a situation in which two or more natural or legal persons are linked by -
- (a) participation, being the ownership, direct or by way of control, of 20% or more of the voting rights or capital of an undertaking,
- (b) control, being the relationship between a parent undertaking and a subsidiary, in all the cases referred to in Article 1(1) and (2) of Directive 83/349/EEC, or
- (c) a similar relationship between any person and an undertaking, any subsidiary undertaking of a subsidiary undertaking also being considered a subsidiary of the parent undertaking which is at the head of those undertakings,
and includes a situation in which 2 or more persons are permanently linked to one and the same other person by a control relationship;
“control”, in relation to an undertaking, means control of the undertaking by a parent undertaking or by a person in the cases referred to in Article 1(1) and (2) of Directive 83/349/EEC;
“Court” means the High Court;
“credit institution” means the holder of an authorisation issued by the Bank or by a competent authority of another Member State for the purposes of Directive 2006/48/EC relating to the taking up and pursuit of the business of credit institutions;
“dealing on own account” means trading against proprietary capital resulting in the conclusion of transactions in one or more financial instruments;
“execution of orders on behalf of clients” means acting to conclude agreements to buy or sell one or more financial instruments on behalf of clients;
“Directive” means the Markets in Financial Instruments Directive 2004/39/EC of 21 April 2004;
“durable medium” means any instrument which -
- (a) enables a client to store information addressed personally to that client in a way accessible for future reference and for a period of time adequate for the purposes of the information, and
- (b) allows the unchanged reproduction of the information stored;
“financial analyst” means a relevant person who produces the substance of investment research;
“financial instruments” means the instruments specified in Part 3 of Schedule 1;
“group”, in relation to an investment firm, means a group of which that firm forms a part consisting of -
- (a) a parent undertaking and that undertaking's subsidiaries,
- (b) the entities in which that undertaking holds, or its subsidiaries hold, a participation described in subparagraph (a) of the definition in this paragraph of “close link”, and
- (c) any other undertakings linked to each other by a relationship within the meaning of Article 12(1) of Directive 83/349/EEC on consolidated accounts;
“home Member State” means -
- (a) in relation to an investment firm -
- (i) that is a natural person, the Member State in which the firm's head office is situated,
- (ii) that is a legal person, the Member State in which the firm's registered office is situated, or
- (iii) if the investment, firm under the firm's national law, has no registered office, the Member State in which the firm's head office is situated, and
- (b) in relation to a regulated market, the Member State in which the registered office of the market operator of the regulated market is situated or, if under the law of that Member State the market operator has no registered office, the Member State in which the head office of the market operator of the regulated market is situated;
“host Member State” means -
- (a) the Member State, other than the home Member State, in which an investment firm has a branch or performs services or carries on activities, or
- (b) the Member State in which the market operator of a regulated market provides appropriate arrangements so as to facilitate access to trading on the system of the regulated market by remote members or participants established in that same Member State;
“insurance undertaking” has the same meaning as in the Insurance Act 1989;
“investment advice”, subject to paragraph (4), means the provision of personal recommendations to a client, either upon the client's request or at the initiative of the investment firm, in respect of one or more transactions relating to financial instruments;
“investment firm” means, subject to paragraph (2), any person, other than a tied agent, which person's regular occupation or business is the provision of one or more investment services to third parties on a professional basis, or the activity of dealing on own account on a professional basis, but does not include a natural person unless -
- (a) his or her legal status ensures a level of protection for third parties’ interests equivalent to that afforded by legal persons,
- (b) he or she is subject to equivalent prudential supervision appropriate to his or her legal status, and,
- (c) if paragraph (3) is applicable, he or she ensures that the conditions set out in that paragraph are fulfilled;
“investment services” means any of the services listed in Part 1 of Schedule 1 relating to any of the instruments listed in Part 3 of Schedule 1, and a reference to the provision of investment services in these Regulations shall be interpreted as including a reference to the carrying on of the activity of dealing on own account;
“ISD firm” means an investment firm within the meaning of Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field;
“limit order” means an order to buy or sell a financial instrument at its specified price limit or better and for a specified size;
“market maker” means a person who holds himself, herself or itself out on the financial markets on a continuous basis as being willing to deal on own account by buying and selling financial instruments against the person's proprietary capital at prices defined by the person;
“market operator”, in relation to a regulated market, means -
- (a) a person who operates the business of the regulated market other than a regulated market described in subparagraph (b), or
- (b) the regulated market if it is a legal person and itself operates the business of the regulated market;
“Member State” means a Member State of the European Community;
“Minister” means the Minister for Finance;
“money-market instruments” means those classes of instruments which are normally traded on the money market, such as treasury bills, certificates of deposit and commercial papers but does not include instruments of payment;
“multilateral trading facility” and “MTF” mean a multilateral system, operated by an investment firm or a market operator, which brings together multiple third-party buying and selling interests in financial instruments, in the system and in accordance with non-discretionary rules, in a way that results in a contract;
“outsourcing” means an arrangement of any form between an investment firm and a service provider by which the service provider performs a process, a service or an activity which would otherwise be undertaken by the investment firm itself;
“parent undertaking” means an undertaking as defined by Articles 1 and 2 of Seventh Council Directive 83/349/EEC of 13 June 1983 on consolidated accounts;
“person with whom a relevant person has a family relationship” means any of the following:
- (a) the spouse of the relevant person or any partner of that person considered by national law as equivalent to a spouse;
- (b) a dependent child or stepchild of the relevant person;
- (c) any other relative of the relevant person who has shared the same household as that person for at least one year on the date of the personal transaction concerned:
“portfolio management” means managing portfolios in accordance with mandates given by clients on a discretionary client-by-client basis where such portfolios include one or more financial instruments;
“professional client” means a client meeting the criteria laid down in Schedule 2 to these Regulations;
“qualifying holding” means a direct or indirect holding of shares or other interest in an investment firm, proposed investment firm, market operator of a regulated market, or proposed market operator of a regulated market, which holding represents -
- (a) 10 per cent. or more of the capital or of the voting rights, or
- (b) any direct or indirect holding of less than 10 per cent which, in the opinion of the Bank, makes it possible to control or exercise a significant influence over the management of the investment firm or proposed investment firm in which a holding subsists;
“regulated market” means a multilateral system operated or managed by a market operator which
- (a) brings together, or facilitates the bringing together of, multiple third-party buying and selling interests in financial instruments, in the system and in accordance with its non-discretionary rules, in a way that results in a contract in respect of the financial instruments admitted to trading under its rules or systems, and
- (b) is authorised and functions regularly and in accordance with Part 6;
“relevant person”, in relation to an investment firm, means any of the following:
- (a) a director, partner or equivalent, manager or tied agent of the firm;
- (b) a director, partner or equivalent, or manager of any tied agent of the firm;
- (c) a person who is
- (d) an employee of the firm or of a tied agent of the firm,
- (e) another natural person -
- (i) whose services are placed at the disposal, and under the control of the firm or a tied agent of the firm, and
- (ii) who is involved in the provision by the firm of investment services and activities;
- (e) a natural person who is directly involved in the provision of services to the investment firm or to its tied agent under an outsourcing arrangement for the purpose of the provision by the firm of investment services and activities;
“retail client” means a client who is not a professional client;
“securities financing transaction” has the meaning given to it in Article 2(10) of Commission Regulation (EC) No 1287/2006 of 10 August 2006;
“senior management” means the person or persons who effectively direct the business of the investment firm;
“State” means the Republic of Ireland;
“subsidiary” means a subsidiary undertaking as defined in Articles 1 and 2 of Directive 83/349/EEC including any subsidiary of a subsidiary undertaking of an ultimate parent undertaking;
“systematic internaliser” means an investment firm which, on an organised, frequent and systematic basis, deals on own account by executing client orders outside a regulated market or an MTF;
“tied agent” means a person appointed under Regulation 109 as a tied agent by an investment firm;
“third country” means a country that is not a Member State, and includes a state, province region or dependent territory of such a country;
“transferable securities” means, with the exception of instruments of payment, those classes of securities which are negotiable on the capital market, such as the following:
- (a) shares in companies and other securities equivalent to shares in companies, partnerships or other entities, and depositary receipts in respect of shares;
- (b) bonds or other forms of securitised debt, including depositary receipts in respect of such securities;
- (c) any other securities giving the right to acquire or sell any such transferable securities or giving rise to a cash settlement determined by reference to transferable securities, currencies, interest rates or yields commodities or other indices or measures;
“UCITS management company” means a management company as defined in EU Council Directive 85/611/EEC of 20 December 1985 on the coordination of laws, regulations and administrative provisions relating to undertakings for collective investment in transferable securities;
- (2) For the purposes of the definition in paragraph (1) of “investment firm”, where an individual -
- (a) provides an investment or ancillary service, or
- (b) carries on the activity of dealing on own account,
and the service or activity is carried on solely for the account of and under the full and unconditional responsibility of an investment firm, an insurance undertaking or a credit institution, the activity or service, as the case may be, shall be regarded as that of the investment firm, insurance undertaking or credit institution itself.
- (3) For the purposes of the definition in paragraph (1) of “investment firm”, where a natural person provides services involving the holding of third parties’ funds or transferable securities, the natural person may be considered as an investment firm only if, without prejudice to the other requirements imposed in these Regulations and in Directive 2006/49/EC, he or she ensures that the following conditions are fulfilled:
- (a) the ownership rights of third parties in instruments and funds must be safeguarded, especially in the event of the insolvency of the investment firm or of its proprietors, seizure, set-off or any other action by creditors of the firm or of its proprietors;
- (b) the investment firm must be subject to rules designed to monitor the firm's solvency and that of its proprietors;
- (c) the investment firm's annual accounts must be audited by one or more persons empowered, under Irish law, to audit accounts;
- (d) where the investment firm has only one proprietor, he or she must make provision for the protection of investors in the event of the
investment firm's cessation of business following his or her death incapacity or any other such event.
- (4) For the purposes of the definition in paragraph (1) of “investment advice” “personal recommendations” means recommendations -
- (a) that are made to persons in their capacity -
- (i) as investors or potential investors, or
- (ii) as agents for an investors or potential investors,
- (b) that are presented as suitable for those persons or are based on a consideration of their circumstances, and
- (c) must constitute recommendations to take one of the following sets of steps:
- (i) to buy, sell, subscribe for, exchange, redeem, hold or underwrite a particular financial instrument;
- (ii) to exercise or not to exercise any right conferred by a particular financial instrument to buy, sell, subscribe for, exchange, or redeem a financial instrument,
but does not include recommendations that are issued exclusively through distribution channels or to the public.
- (5) For the purposes of these Regulations, all of the places of business set up in the State by an investment firm with headquarters in another Member State shall be regarded as a single branch;
Competent Authority
4.
4. The Bank is the competent authority in the State for the purposes of the Directive.
Exemptions
5.
5. (1) These Regulations do not apply to any of the following:
- (a) insurance undertakings as defined in Article 1 of Directive 73/239/EEC, assurance undertakings as defined in Article 1 of Directive 2002/83/EC, or reinsurance undertakings as defined in Directive 2005/68/EC;
- (b) persons which provide investment services exclusively for their -
- (i) parent undertakings,
- (ii) subsidiaries, or
- (ii) other subsidiaries of their parent undertakings;
- (c) persons who do not provide any investment services or activities other than dealing on own account, unless -
- (i) they are market makers, or
- (ii) deal on own account outside -
- (A) a regulated market, or
- (B) an MTF,
on an organised, frequent and systematic basis by providing a system accessible to third parties in order to engage in dealings with them;
- (d) persons who provide investment services consisting exclusively in the administration of employee-participation schemes;
- (e) persons who provide investment services which only involve both administration of employee-participation schemes and the provision of investment services exclusively for their parent undertakings, for their subsidiaries or for other subsidiaries of their parent undertakings;
- (f) the members of the European System of Central Banks, the National Treasury Management Agency and other public bodies charged with or intervening in the management of the public debt;
- (g) An Post, including any postmaster acting on it's behalf, the Prize Bond Company Ltd. or any successor to the Prize Bond Company Ltd, as operator of the Prize Bond scheme, any of them is acting as an agent of, or otherwise on behalf of, the Minister of the National Treasury Management Agency;
- (h) persons -
- (i) dealing on own account in financial instruments, or
- (ii) providing, to the clients of their main business, investment services in commodity derivatives or derivative contracts referred to in subparagraph (8) of Part 3 of Schedule 1,
if doing so is ancillary in each case to the main businesses, when considered on a group basis, if the main businesses is not the provision of investment services within the meaning of these Regulations or any of the services mentioned in Annex I of Directive 2006/48/EC;
- (i) persons providing investment advice in the course of providing another professional activity not covered by these Regulations if the provision of the advice is not specifically remunerated;
- (j) persons whose main business consists of dealing on own account in commodities, commodity derivatives or both unless those persons are part of a group the main business of which is the provision of -
- (i) investment services within the meaning of these Regulations, or
- (ii) one or more of the services specified in Annex I of Directive 2006/48/EC;
- (k) firms which provide investment services, perform investment activities, or do both, and in doing so deal only on own account on markets in one or more of -
- (i) financial futures,
- (ii) options, or
- (iii) other derivatives
and on cash markets for the sole purpose of one or both of -
- (I) hedging positions on derivatives markets, and
- (II) dealing for the accounts of other members of those markets or making prices for them,
where the markets are guaranteed by clearing members of the same markets and responsibility for ensuring the performance of contracts entered into by those firms is assumed by clearing members of the same markets;
- (l) an investment business firm which the Bank has determined does not require an authorisation because the provision of investment business services is only carried out as necessary in relation to the main activities of the investment business firm, and, for these purposes, the determination of the Bank shall be -
- (i) for a fixed period only, and
- (ii) subject to whatever reporting requirements the Bank considers appropriate;
- (m) a personal representative as defined in section 3 of the Succession Act 1965, in respect of actions as personal representative of a deceased person;
- (n) a trustee, as defined in section 3 of the Trustee Act 1893, in respect of actions as trustee of a trust, unless the principal objective of the trust is to provide investment services to members of the public;
- (o) notwithstanding the obligations imposed on liquidators and receivers under this Act, a person appointed as a liquidator or receiver of a company in respect of activities relating to the liquidation or receivership;
- (p) any collective investment undertaking or pensions fund including the depository or manager of the undertaking or fund that has -
- (i) received approval from the Bank, under the its powers under other enactments, to market units of the undertaking in the State, or
- (ii) been authorised by the competent authority of another Member State under Directive 85/611/EEC;
- (q) a practising member of an approved professional body as defined in section 55 of the Investment Intermediaries Act 1995, not being a certified person as defined in that section, who holds at the member's principal place of business, on behalf of clients, share certificates in private limited companies owned by those clients where -
- (i) the member holds the share certificates only in order to facilitate the orderly management of the private limited company's statutory records, and
- (ii) the holding of the share certificates arises from the provision of professional services by the member to the client.
- (2) The rights conferred by these Regulations do not extend to the provision of services as counterparty in transactions carried out -
- (a) by public bodies dealing with public debt,
- (b) by members of the European System of Central Banks,
- (i) performing their tasks as provided for by the Treaty and the Statute of the European System of Central Banks, or
- (ii) performing equivalent functions under national provisions, or
- (c) by the European Central Bank.
- (3) These Regulations do not apply to persons whose home Member State is the State, and whose activities are regulated by the Bank, if the persons -
- (a) are not allowed to hold clients’ funds or securities and therefore are not allowed at any time to place themselves in debit with their clients,
- (b) are not allowed to provide any investment service except as follows:
- (i) receiving and transmitting orders in transferable securities and units in collective investment undertakings;
- (ii) providing investment advice in relation to those securities and units, and
- (c) in the course of providing the services referred to in subparagraph (b) are allowed to transmit orders only to any or all of the following:
- (i) investment firms authorised in accordance with the Directive;
- (ii) credit institutions authorised in accordance with Directive 2006/48/EC;
- (iii) branches of investment firms or of credit institutions which are authorised in a third country and are subject to, and comply with, prudential rules considered by the competent authorities to be at least as stringent as the rules under the Directive Directive 2006/48/EC or Directive 2006/49/EC;
- (iv) collective investment undertakings authorised under the law of a Member State to market units to the public and to the managers of the undertakings;
- (v) investment companies with fixed capital, as defined in Article 15(4) of Second Council Directive 77/91/EEC of 13 December 1976 on coordination of safeguards
- (4) A certified person as defined in section 55 of the Investment Intermediaries Act 1995 does not require an authorisation under these Rules while -
- (a) that person remains a certified person, and
- (b) any investment advice and investment services are provided by that person in an incidental manner and within the limits, conditions or constraints of the certificate granted by that person's approved professional body.
- (5) In paragraph (4):
“investment advice” includes “investment advice” within the meaning of that expression used in Part VII of the Investment Intermediaries Act 1995 in relation to a certified person;
“investment services” includes “investment business services” within the meaning of that expression used in Part VII of the Investment Intermediaries Act 1995 in relation to a certified person.
- (6) On application by a person described in paragraph (3), the Bank may direct that these Regulations apply to that person, notwithstanding that paragraph and while the direction remains in effect these Regulations apply to that person.
Part 3 - Transitional
Existing regulation
6.
6. (1) Effective on 1 November 2007, the Investment Intermediaries Act, 1995 does not apply to an investment firm.
- (2) Notwithstanding Regulation 7, a person who, immediately before 1 November 2007, is an -
- (a) “authorised investment business firm” under the Investment Intermediaries Act 1995, or
- (b) “authorised member firm” under the Stock Exchange Act 1995,
is deemed for the purposes of these Regulations to be an authorised investment firm.
- (3) Notwithstanding Regulation 7, for the purposes of these Regulations,
- (a) the Main Market of the Irish Stock Exchange is deemed to be a regulated market, and
- (b) the Irish Stock Exchange Limited is deemed to be the market operator of that regulated market.
- (4) If Regulations made by the Bank under the Investment Intermediaries Act 1995 or the Stock Exchange Act, 1995, in this Regulation called “the former Regulations”,
- (a) were in force immediately before 1 November 2007, and
- (b) at that time, the former Regulations applied to the firms referred to in paragraph (2) or to the Irish Stock Exchange Limited and, on 1 November 2007, the Bank, has the discretion under these Regulations to make similar Regulations,
then, notwithstanding this Regulation, the former Regulations continue to apply to investment firms and market operators of regulated markets as if the former Regulations were made by the Bank under these Regulations.
- (5) If a direction to a firm referred to in paragraph (2), or to the Irish Stock Exchange Limited, given by the Bank under the Investment Intermediaries Act, 1995 or the Stock Exchange Act, 1995, in this Regulation called the “former direction”,
- (a) was in force immediately before the time of the coming into operation these Regulations, and
- (b) at that time the former direction applied to the a firm referred to in paragraph (2), or to the Irish Stock Exchange Limited, and the Bank on the coming into operation of these Regulations, has the discretion under these Regulations to give a similar direction,
the former direction continues to apply to the firm or the Irish Stock Exchange Limited as if the former direction were given by the Bank under these Regulations.
- (6) If an order made, or a notice sent, by the Bank to a firm referred to in paragraph (2), or to the Irish Stock Exchange Limited, under the Investment Intermediaries Act, 1995 or the Stock Exchange Act, 1995, in this Regulation called the “former order or notice”,
- (a) was in force immediately before the time of the coming into operation of these Regulations, and
- (b) at that time the former order or notice applied to the firm referred to in paragraph (2), or to the Irish Stock Exchange Limited, and the Bank on 1 November 2007, has the discretion under these Regulations to make a similar order, or send a similar notice,
the former order or notice continues to apply to the firm referred to in paragraph (2), or to the Irish Stock Exchange Limited, as if the former order or notice had been made or sent by the Bank under these Regulations.
- (7) A person who, immediately before 1 November 2007, was holding office as an authorised officer under the Investment Intermediaries Act, 1995 or the Stock Exchange Act 1995, is deemed for the purposes of these Regulations to be an authorised officer, as if appointed as such under Regulation 164.
Part 4 - Authorisation of Investment Firms
Requirement for authorisation
7.
7. (1) Subject to paragraph (2), a person shall not act as an investment firm in the State, claim to be an investment firm in the State or represent that the person is an investment firm in the State, unless the person is -
- (a) an authorised investment firm,
- (b) is authorised to do so for the purposes of the Directive by a competent authority in another Member State, or
- (c) is deemed authorised as described in Regulation 6(2),
and is acting as authorised.
- (2) A market operator may operate an MTF in the State, subject to the prior verification of the market operator's compliance with Part 4 and with Part 5 excluding Regulations 31 and 43.
- (3) At the request of the market operator of a regulated market, the Bank may authorise as an MTF a multilateral system that, immediately before 1 November 2007, was both in existence and operated by the market operator if -
- (a) the multilateral system is in compliance with rules equivalent to those required by these Regulations for the authorisation and operation of MTFs, and
- (b) the request concerned is made on or before 31 July 2008.
When investment firm may be regarded as operating in the State
8.
8. (1) For the purposes of Regulation 7, an investment firm shall not be regarded as operating within the State, if -
- (a) the firm has no branch in the State,
- (b) the firm's head or registered office is -
- (i) in a state other than a Member State, or
- (ii) in a Member State outside the State and the firm does not provide any investment services in respect of which it is required to be authorised in its home Member State for the purposes of the Directive, or
- (c) the firm is authorised in a Member State outside the State, under the Directive, but provides only investment services of a kind for which authorisation under the Directive is not available during the provision of the investment services.
- (5) Notwithstanding paragraph (1), an investment firm, for the purposes of Regulation 7, shall be regarded as operating within the State if the firm provides investment services to individuals in the State who do not themselves provide one or more investment services on a professional basis.
Bank to establish and maintain register of investment firms
9.
9. The Bank shall -
- (a) establish and maintain a register of all authorised investment firms for which the Bank is the competent authority, and
- (b) ensure that the register is publicly accessible and contains information on the investment services for which the investment firms are authorised under these Regulations.
Requirements of investment firm authorisations
10.
10. It is a requirement of an authorisation granted by the Bank that -
- (a) an investment firm which is a legal person must have its head office and its registered office (if required by law) in the State, and
- (b) an investment firm other than one referred to in subparagraph (a) that is a branch of another investment firm whose head or registered office is in a State other than a Member State must have a registered office in the State.
Application to Bank for an authorisation to operate as an investment firm
11.
11. (1) The Bank -
- (a) may grant or refuse to grant to any person applying to it under this Regulation an authorisation to operate as an investment firm, and
- (b) shall not grant an authorisation under subparagraph (a) unless satisfied that the applicant complies with this Part.
- (2) The grant of an authorisation under paragraph (1) may be given -
- (a) unconditionally, or
- (b) as the Bank considers fit, subject to conditions or requirements.
- (3) If the Bank decides under paragraph (1) to refuse to grant an authorisation for an applicant to operate as an investment firm, the Bank shall promptly serve notice on the applicant of the decision, stating the reasons for the refusal.
- (4) An application for authorisation under paragraph (1) shall be in the form and contain or be accompanied by the records and information as the Bank may specify including but not limited to -
- (a) particulars of the type of business to be carried on or likely to be carried on by the proposed investment firm,
- (b) information about any person or persons having a qualifying shareholding in, or having control or ownership of, the proposed investment firm, including but not limited to, any natural or legal person whose shareholding in, or other commercial relationship with the proposed investment firm might influence the conduct of the proposed investment firm to a material degree, and
- (c) a certified copy of -
- (i) the memorandum of association, if any, and articles of association, if any, of the proposed investment firm, or
- (ii) other constituting documents, if any.
Prerequisites relating to qualifying holdings in investment firms
12.
12. (1) The Bank shall not grant an authorisation under Regulation 11(1) to a person unless the Bank has been informed of -
- (a) the identities of the shareholders or members,
- (b) whether the shareholders or members, as the case may be,
- (i) are direct or indirect,
- (ii) are natural or legal persons,
- (iii) have qualifying holdings, and
- (iv) the amounts of those qualifying holdings, if any.
- (2) The Bank shall not grant an authorisation under Regulation 11(1) unless taking into account the need to ensure sound and prudent management of investment firms the Bank is satisfied as to the suitability of the shareholders or members that have or will have qualifying holdings in the investment firm that is the subject of the application under Regulation 11(1).
Prerequisites to granting authorisations for investment firms
13.
13. Without limiting the generality of Regulation 11(1), the Bank shall not grant an authorisation under that Regulation to a person to operate as an investment firm unless the firm satisfies the bank as follows -
- (a) that the proposed investment firm is -
- (i) a company incorporated by statute or under the Companies Acts,
- (ii) incorporated outside the State,
- (iii) a company made under Royal Charter, or
- (iv) constituted under a partnership agreement as an unincorporated body of persons,
- (v) an industrial provident society, or
- (vi) a sole trader;
- (b) that the memorandum of association and articles of association or other constituting documents of the proposed investment firm contain sufficient provision so as to enable the firm to operate in accordance with -
- (i) these Regulations, and
- (ii) any conditions, requirements or both, as the Bank may impose;
- (c) that the proposed investment firm -
- (i) has the minimum level of capital which shall be specified by the Bank, and
- (ii) is in compliance with Regulation 32;
- (d) as to the probity and competence of each of the directors and managers of the proposed investment firm;
- (e) as to the suitability of each of the qualifying shareholders of the proposed investment firm;
- (f) as to the organisational structure and management skills of the proposed investment firm and that adequate levels of staff and expertise will be employed to carry out the firm's proposed activities;
- (g) that the proposed investment firm has and will follow established procedures to enable -
- (i) the Bank to be supplied with all information necessary for the Bank's supervisory functions, and
- (ii) the public to be supplied with any information which the Bank may specify;
- (h) that the organisation of the business structure of the proposed investment firm is such that it and any of its associated or related undertakings, are capable of being supervised adequately by the Bank;
- (i) as to the conduct of -
- (i) the proposed investment firm's business and financial resources, and
- (ii) any other matters as the Bank considers necessary in the interests of the proper and orderly regulation and supervision of investment firms or in the interests of the protection of investors.
Bank may obtain further information from applicant by request, inquiry or investigation
14.
14. (1) At any time before the grant or refusal of an authorisation under Regulation 11(1), the Bank may -
- (a) request the applicant for the authorisation to supply further information and records relating to the proposed investment firm, or
- (b) instruct an authorised officer to -
- (i) make inquiries, or
- (ii) carry out investigations
as may be necessary for the purpose of evaluating properly the application.
- (2) The inquiries or investigations referred to in subparagraph (1)(b) shall be carried out in accordance with these Regulations.
Time frame for granting and refusing applications for authorisations for investment firms
15.
15. (1) The applicant under Regulation 11(1) for an authorisation to operate as an investment firm shall be informed -
- (a) within 6 months after the receipt by the Bank of the complete application, or
- (b) where additional information in relation to the application has been sought by the Bank, within -
- (i) 6 months after the receipt by the Bank of the additional information, or
- (ii) 12 months after the receipt by the Bank of the complete application,
whether or not an authorisation has been granted, whichever is the sooner;
- (2) If the applicant under Regulation 11(1) does not provide a complete application, as required under Regulations 11 to 14, within the 12 months referred to in paragraph (1) of this Regulation, the Bank may refuse the application.
Investment firms -capital, management, structure, control
16.
16. (1) The Bank may impose conditions, requirements or both, in respect of the level of capital to be maintained by an investment firm.
- (2) The Bank may require that an appointment with an investment firm, as a director, as chief executive, as manager or as the holder of an equivalent position, requires the Bank's prior approval in writing which it may refuse, if not satisfied as to the probity and competence of the proposed appointee.
- (3) The Bank may direct an investment firm to alter the firm's memorandum of association, articles of association or other constituting documents in the interest of the proper and orderly regulation and supervision of investment firms or the protection of investors.
- (4) The Bank may require an investment firm or proposed investment firm to organise its business or corporate structure or its control of any associated undertaking or related undertaking not supervised by the Bank such that -
- (a) the investment firm when authorised under these Regulations, and
- (b) where appropriate and practicable, the business of any associated undertaking or related undertaking, either collectively or individually,
is capable of being supervised to the satisfaction of the Bank under these Regulations.
Unincorporated investment firms - special provisions
17.
17. (1) Without prejudice to Regulation 16, the Bank may impose conditions requirements or both on an investment firm which is constituted as an unincorporated body of persons or which is a natural person in order to monitor the solvency of the firm, its proprietors or both.
- (2) The Bank may impose conditions, requirements or both on an investment firm which is constituted as an unincorporated body of persons or which is a natural person in order to achieve an equivalent level of supervision to that pertaining to an investment firm which is constituted as a corporate body.
Investment firms, dividing responsibility between their home and host Member States
18 The Bank shall apply these Regulations, having regard to the division of responsibilities between the home and host Member States of an investment firm, which are set out in the Directive and Directive 2006/49/EC and the relevant provisions of these Regulations shall be construed accordingly.
Prohibition against false or misleading application for investment firm authorisation
19. A person shall not, knowingly or recklessly -
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