Markets in Financial Instruments and Miscellaneous Provisions Act 2007
No: 37 of 2007
An Act to make provision in relation to markets in financial instruments and to make miscellaneous amendments to financial services legislation and to the ministerial and parliamentary offices Act 1938, the national pensions reserve fund Act 2000, the ordnance survey Ireland Act 2001, and to the freedom of information Act 1997
“ Bank” means the Central Bank and Financial Services Authority of Ireland;
“ Irish investment services law ” means—
(a)
the measures adopted for the time being by the State to implement the Markets in Financial Instruments Directive and the Supplemental Directive, including but not limited to such measures enacted by—
(i)
an Act,
(ii)
the European Communities (Markets in Financial Instruments) Regulations 2007 ( S.I. No. 60 of 2007 ), or
(iii)
any other enactment,
(b)
any measures directly applicable in the State in consequence of the Markets in Financial Instruments Directive, including but not limited to the MiFID Regulation, and
(c)
any supplementary or consequential measures or both adopted for the time being by the State in respect of the MiFID Regulation;
“ Markets in Financial Instruments Directive ” means Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments as amended or replaced from time to time by either a directive or regulation—
(a)
made by a competent organ of the European Union, and
(b)
implemented under the laws of the State;
“ MiFID Regulation ” means Commission Regulation (EC) No. 1287/2006 of 10 August 2006 implementing Directive 2004/39/EC of the European Parliament and of the Council as regards record-keeping obligations for investment firms, transaction reporting, market transparency, admission of financial instruments to trading, and defined terms for the purposes of that Directive;
“ Minister ” means the Minister for Finance;
“ Supplemental Directive ” means Commission Directive No. 2006/73/EC of 10 August 2006 implementing Directive 2004/39/EC of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive;
(2)
A word or expression that is used in this Act and is also used in the Markets in Financial Instruments Directive or the Supplemental Directive has the same meaning in this Act as it has in the Markets in Financial Instruments Directive or the Supplemental Directive, unless—
The expenses incurred by the Minister in the administration of this Act shall be paid out of money provided by the Oireachtas.
5-
Penalties for conviction on indictment of Irish investment services law
(1)
In this section, “ the Regulations ” means the European Communities (Markets in Financial Instruments) Regulations 2007 ( S.I. No. 60 of 2007 ).
(2)
A person is guilty of an offence if the person—
(a)
fails to discharge a duty to which the person is subject under Regulation 40(1), 109(6) or 112(1) of the Regulations, or
(b)
contravenes Regulation 7(1), 19, 52, 152(1), 159, 165(15), 165(16), 165(17), or 185(2) of the Regulations.
(3)
A person guilty of an offence under subsection (2) is liable on conviction on indictment to a fine not exceeding €10,000,000 or imprisonment for a term not exceeding 10 years or both.
(4)
This section is without prejudice to—
(a)
any penalty provided by Irish investment services law in respect of a summary conviction for an offence, and
(b)
the ability to bring and prosecute summary proceedings for any offence under Irish investment services law.
(5)
This section comes into operation on 1 November 2007.
by substituting the following for the definition of “Supervisory Directives” in section 33AK(10):
“ ‘ Supervisory Directives ’ means—
(a)
Directive 2000/12/EC of the European Parliament and of the Council of 20 March 2000,
(b)
Council Directive 93/22/EEC of 10 May 1993,
(c)
Council Directive 85/611/EEC of 20 December 1985,
(d)
Council Directive 92/49/EEC of 18 June 1992,
(e)
Council Directive 92/96/EEC of 10 November 1992,
(f)
the 2003 Market Abuse Directive (within the meaning of Part 4 of the Investment Funds, Companies and Miscellaneous Provisions Act 2005 ),
(g)
the supplemental Directives (within the meaning of that Part 4),
(h)
the 2003 Prospectus Directive (within the meaning of Part 5 of the Investment Funds, Companies and Miscellaneous Provisions Act 2005 ),
(i)
Directive 2005/68/EC of 16 November 2005,
(j)
the Transparency (Regulated Markets) Directive (within the meaning of Part 3 of the Investment Funds, Companies and Miscellaneous Provisions Act 2006 ),
(k)
Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions,
(l)
Directive 2006/49/EC of the European Parliament and of the Council of 14 June 2006 on the capital adequacy of investment firms and credit institutions,
(m)
Directive 2002/92/EC of the European Parliament and of the Council of 9 December 2002 on insurance mediation,
(n)
Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments, and
(o)
the Supplemental Directive and the MiFID Regulation as defined in section 3(1) of the Markets in Financial Instruments and Miscellaneous Provisions Act 2007.”,
(b)
in Schedule 2, by inserting in Part 1 the following item after the item relating to the Investment Funds, Companies and Miscellaneous Provisions Act 2006 :
2007
Markets in Financial Instruments and Miscellaneous Provisions Act 2007
Part 1 and sections 9 to 11, 13 and 17
and
(c)
in Schedule 2, by inserting in Part 2 the following items after the item relating to the European Communities (Reinsurance) Regulations 2006:
S.I. No. 660 of 2006
European Communities (Capital Adequacy of Investment Firms) Regulations 2006
The whole instrument
S.I. No. 661 of 2006
European Communities (Capital Adequacy of Credit Institutions) Regulations 2006
The whole instrument
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Repeal of Stock Exchange Act 1995
The Stock Exchange Act 1995 is repealed on 1 November 2007.
Penalties for conviction on indictment of European Communities (Reinsurance) Regulations
(1)
An offence under Regulations 5(2), 6(2), 20(2), 22(4), 28(2), 29(2), 58(9), 59(8), 60(6), 62(4), 75(1), or 76(1) of the European Communities (Reinsurance) Regulations 2006 ( S.I. No. 380 of 2006 ) is an offence which may be tried on indictment.
(2)
A person who commits an offence under a Regulation referred to in subsection (1) is liable on conviction on indictment to a fine not exceeding €10,000,000 or imprisonment for a term not exceeding 10 years or both.
(3)
This section is without prejudice to—
(a)
any penalty provided by the European Communities (Reinsurance) Regulations 2006 ( S.I. No. 380 of 2006 ) in respect of a summary conviction for an offence, and
(b)
the ability to bring and prosecute summary proceedings for any offence under those Regulations.
Section 1 of the Netting of Financial Contracts Act 1995 is amended—
(a)
by inserting the following after the definition of “the Companies Acts”:
“ ‘ entity ’ includes—
(a)
a natural or legal person, including a state or any international organisation duly established,
(b)
any subdivision or authenticating or other authority of a state or international organisation, and
(c)
an unincorporated body of persons;”,
(b)
by substituting the following for the definition of “financial contracts”:
“ ‘ financial contracts ’ means one or more contracts consisting of one or more or a combination of the following:
(a)
interest-rate contracts which are one or more of—
(i)
single-currency interest rate swaps,
(ii)
basis swaps,
(iii)
forward-rate agreements,
(iv)
interest-rate futures,
(v)
interest-rate options,
(vi)
other contracts of a similar nature to those specified in any of subparagraphs (i) to (v), and
(vii)
contracts which are combinations of contracts referred to in subparagraphs (i) to (vi);
(b)
foreign-exchange contracts which are one or more of—
(i)
cross-currency interest-rate swaps,
(ii)
spot foreign-exchange contracts,
(iii)
forward foreign-exchange contracts,
(iv)
currency futures,
(v)
currency options,
(vi)
other contracts of a similar nature to those specified in any of subparagraphs (i) to (v), and
(vii)
contracts which are combinations of contracts referred to in subparagraphs (i) to (vi);
(c)
contracts relating to, or which concern indices relating to, one or more of equities, bonds, gold, precious metals other than gold, and commodities other than precious metals, or a combination of them, which consist of one or more of—
(i)
swaps,
(ii)
spot contracts,
(iii)
forward contracts,
(iv)
futures,
(v)
options,
(vi)
other contracts of a similar nature to those specified in any of subparagraphs (i) to (v), and
(vii)
contracts which are combinations of contracts referred to in subparagraphs (i) to (vi);
(d)
securities lending and securities borrowing contracts;
(e)
sale and repurchase agreements, including reverse repurchase agreements, in relation to securities;
(f)
buy and sell back agreements in relation to either or both securities and equities;
(g)
in relation to equities,
(i)
equities lending and equities borrowing contracts, and
(ii)
sale and repurchase agreements, including reverse repurchase agreements;
(h)
in relation to commodities,
(i)
commodity lending and commodity borrowing contracts, and
(ii)
sale and repurchase agreements, including reverse repurchase agreements;
(i)
contracts for either or both the assumption of and laying off of credit risk—
(i)
on loans, debt securities or other assets, or
(ii)
in relation to an entity,
or other contracts of a similar nature;
(j)
any derivatives not otherwise encompassed by paragraphs (a) to (i) or paragraphs (k) to (o) concerning a reference item or index, whether cash-settled or physically settled, including—
(i)
swaps,
(ii)
spot contracts,
(iii)
forwards,
(iv)
futures,
(v)
options, and
(vi)
contracts for difference;
(k)
title transfer collateral arrangements;
(l)
any net amount due under a netting agreement or a master netting agreement;
(m)
agreements to buy or sell, clear or settle transactions in, or act as a depository for, any—
(i)
financial asset, including, without limitation, any security (including any equity), currency, obligation evidencing debt (including a loan or deposit) and any negotiable or transferable instrument and any intangible asset, or
(ii)
commodity (including precious metal), energy or energy source;
(n)
contracts contained in points 4 to 7, 9 and 10 of Section C of Annex I to Directive 2004/39/EC of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments;
(o)
any contract included by virtue of section 2;
(p)
contracts designated by regulations made under section 3.”,
and
(c)
by substituting “agreement;” for “agreement.” in the definition of “party” and inserting the following after that definition:
“ ‘ reference item or index ’ means a reference item, rate or index relating to one or more of the following:
(a)
interest;
(b)
currencies;
(c)
securities (including equities);
(d)
commodities (including precious metals);
(e)
weather;
(f)
carbon or other emissions allowances;
(g)
bandwidth;
(h)
freight;
(i)
energy (including energy sources such as electricity, oil, oil-related products, coal and gas);
(j)
credit risk on any entity or asset;
(k)
statistical data on economic conditions or any measure of economic risk or value;
(l)
market loss;
(m)
natural catastrophes;
(n)
real property;
(o)
renewable energy credits;
(p)
regulatory licences or quotas;
(q)
any factor not otherwise encompassed by paragraphs (a) to (p) which may impact on the business of an entity, regardless of whether it affects the business of a party to the relevant derivative.”.
Section 52 of the Investment Intermediaries Act 1995 (as amended by the Investor Compensation Act 1998 ) is amended—
(a)
in subsection (2)(c) and (d), by deleting “, controlled” in each of the 2 places in which it appears,
(b)
in subsection (7)(a), (b) and (c) by deleting “, controlled” in each of the 3 places in which it appears, and
(c)
by inserting the following after subsection (9):
“(10)
For the purposes of this section, an investment business firm is deemed to hold client money where—
(a)
the money has been lodged on behalf of a client of the firm to an account with a credit institution or relevant party in the name of the firm or of any nominee of the firm, and
(b)
the firm has the capacity to effect transactions on that account.
(11)
For the purposes of this section, an investment business firm is deemed to hold client investment instruments where the firm—
(a)
has been entrusted by or on account of a client with those instruments, and
(b)
either—
(i)
holds those instruments, including by way of holding documents of title to them, or
(ii)
entrusts those instruments to any nominee,
and the firm has the capacity to effect transactions in respect of those instruments.
(12)
In this section—
(a)
‘nominee’ means a person acting on behalf of an investment business firm as nominee, custodian, or otherwise, and includes an eligible custodian and a nominee company, and
(b)
‘ relevant party ’ means an exchange, clearing house, intermediate broker, OTC counterparty or investment business firm.”.
The Insurance (Miscellaneous Provisions) Act 1985 is amended—
(a)
by inserting the following before section 4:
3A.
“Minister’s discretion to wind up Company
(1)
If the Minister thinks fit, the Minister may arrange for and require—
(a)
that the shares held by the Company in Icarom plc (under administration) be transferred to the Minister, and
(b)
the winding up in accordance with the Companies Acts 1963 to 2006 of the Company.
(2)
Shares transferred to the Minister under subsection (1) vest in the Minister.
(3)
Any assets of the Company remaining after the winding up of the Company shall be paid into or disposed of for the benefit of the Exchequer.”;
and
(b)
by substituting the following for section 11:
11.
“Obligation of shareholders to hold shares in trust for Minister
(1)
Every member of the Company shall hold the member’s shares in the Company upon trust for the Minister and shall accordingly be bound to—
(a)
pay every dividend and other money received by the member in respect of the shares to the Minister for the benefit of the Exchequer, and
(b)
transfer the shares to the Minister as and when required by the Minister.
(2)
If the Minister thinks fit, the Minister may arrange for and require a person who holds shares in a company controlled by the Company, and who holds the shares upon trust for the Minister, to transfer the shares to the Minister, as and when required by the Minister.
(3)
Shares transferred to the Minister under subsection (1) or (2) vest in the Minister.”.
