Investment Intermediaries Act, 1995

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Grant of authorisation.

10.—(1) Subject to the provisions of this Act, a supervisory authority may grant or refuse to grant to any person applying to it under this section an authorisation to operate as an authorised investment business firm.

(2) The grant of an authorisation under subsection (I) of this section may be given unconditionally or it may be given subject to such conditions or requirements or both as the supervisory authority considers fit.

(3) Whenever a supervisory authority refuses to grant authorisation to a proposed investment business firm under this section it shall serve notice on the proposed investment business firm of its intention to refuse to authorise it and stating the reasons therefor and the proposed investment business firm may within 21 days of receipt of such notice appeal to the Court against the decision.

(4) An application for authorisation under subsection (I) of this section shall be in such form and contain such particulars as the supervisory authority shall specify from time to time and, without prejudice to the generality of the aforesaid, shall include such particulars or information as the supervisory authority may request in relation to:

(a) the type of business to be carried on or likely to be carried on by the proposed investment business firm;

(b) any person or persons having a qualifying shareholding or having control or ownership of the proposed investment business firm including any natural or legal person whose shareholding or other commercial relationship with the proposed investment business firm might influence the conduct of the proposed investment business firm to a material degree; and

(c) the memorandum of association and articles of association of the proposed investment business firm.

(5) A proposed investment business firm shall not be authorised by the supervisory authority under this section unless—

(a) it is a company incorporated by statute or under the Companies Acts, or is incorporated outside the State or is a company made under Royal Charter or it draws up a partnership agreement, where it is constituted as an unincorporated body of persons, if such an agreement does not already exist, or is a sole trader and the proposed investment business firm has made arrangements to ensure that its activities will be carried out in such a manner that the requirements of Article 3 (3) of Council Directive No. 93/22/EEC of 10 May 1993(1), are complied with,

(b) it satisfies the supervisory authority that, where applicable, the memorandum of association and articles of association of the proposed investment business firm contain sufficient provision so as to enable it to operate in accordance with this Act, and in accordance with any condition or requirement, or both, as the supervisory authority may impose,

(c) it has the minimum level of capital which shall be specified by the supervisory authority,

(d) it satisfies the supervisory authority as to the probity and competence of each of its directors and managers,

(e) it satisfies the supervisory authority as to the suitability of each of its qualifying shareholders,

(f) it satisfies the supervisory authority as to the organisational structure and management skills of the proposed investment business firm and that adequate levels of staff and expertise will be employed to carry out its proposed activities,

(g) it satisfies the supervisory authority that it has and will follow established procedures to enable the supervisory authority to be supplied with all information necessary for its supervisory functions and to enable the public to be supplied with any information which the supervisory authority may specify,

(h) it satisfies the supervisory authority that the organisation of its business structure is such that it and any of its associated or related undertakings, where appropriate and practicable, are capable of being supervised adequately by the supervisory authority,

(i) where the supervisory authority considers it appropriate, having regard to Council Directive No. 93/22/EEC of 10 May 1993(1) , it satisfies the supervisory authority that:

(I) where the proposed investment business firm is a natural person or a partnership, its head office and the place in which it actually carries on its business is in the State,

(II) where the proposed investment business firm is incorporated, its registered office and head office are in the State, or

(III) it is a branch of an investment business firm which has its head office or its registered office in a country which is not a Member State,

(j) it satisfies the supervisory authority as to its conduct of business, its financial resources and any other matters as the supervisory authority considers necessary in the interests of the proper and orderly regulation and supervision of authorised investment business firms or in the interests of the protection of investors.

(6) A supervisory authority may set out conditions or requirements or both in order to monitor the solvency of an authorised investment business firm which is constituted as an unincorporated body of persons or which is a natural person, including monitoring the solvency of its proprietors.

(7) A supervisory authority may impose conditions or requirements, from time to time, in respect of the level of capital to be maintained by an authorised investment business firm and where the supervisory authority is acting as a competent authority shall have regard to Council Directives 93/6/EEC of 15/03/93⁽¹⁾ and 93/22/EEC of 10/05/93(1) .

(8) A supervisory authority may require that an appointment as a director of an authorised investment business firm or proposed investment business firm or to the post of chief executive or manager or post equivalent thereto, on or after the granting of an authorisation under this section, shall be subject to the prior approval in writing of the supervisory authority which said approval shall not be given unless the authorised investment business firm or proposed investment business firm satisfies the supervisory authority as to the probity and competence of the proposed appointee.

(9) The supervisory authority may direct an authorised investment business firm to alter its memorandum of association or articles of association in the interest of the proper and orderly regulation and supervision of investment business firms or the protection of investors or both.

(10) An authorisation granted under subsection (1) of this section by the supervisory authority shall specify the classes of investment business services which may be provided by the authorised investment business firm concerned and the authorisation may specify additional services which an authorised investment business firm may provide, including those set out in Annex C to Council Directive 93/22/EEC of 10 May 1993⁽¹⁾ as amended or extended from time to time, and the supervisory authority may amend or vary the classes of investment business services or other services which may be so provided and such authorisation shall be taken as authorisation of the said authorised investment business firm for the purposes of the Council Directive.

(11) The supervisory authority may at any time prior to the grant or refusal of an authorisation request further information from the proposed investment business firm or may instruct an authorised officer to make such inquiries or carry out such investigations as may be necessary for the purpose of evaluating properly an application under this section, and such inquiries or investigations shall be carried out in accordance with this Act.

(12) (a) In the case of an investment business firm, a supervisory authority acting as a competent authority shall apply this Act, having regard to the division of responsibilities between the home and host Member States of the investment business firm concerned, which are set out in Council Directive 93/22/EEC of 10 May 1993(1) and Council Directive 93/6/EEC of 15 March, 1993⁽¹⁾ and the relevant sections of this Act shall be construed accordingly.

(b) Subject to the provisions of this section, investment business firms shall be subject to such conditions or requirements or both as may be imposed on them by the supervisory authority in the interests of any or all of the following, namely:

(i) the proper and orderly regulation and supervision of investment business firms,

(ii) the protection of investors or clients or both.

(13) The supervisory authority may impose requirements on a proposed investment business firm or an authorised investment business firm to organise its business or corporate structure or control of any associated undertaking or related undertaking not supervised by the supervisory authority such that the investment business firm when authorised under this Act and, 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 supervisory authority under this Act.

(14) A proposed investment business firm shall be informed whether or not authorisation has been granted—

(a) within six months of the date of receipt of the application or within six months of the coming into operation of this section, whichever is the later, or

(b) where additional information in relation to the application has been sought by the supervisory authority, within a period of six months after the receipt by the supervisory authority of the additional information or the period of twelve months after the receipt of the application, whichever is the sooner.

(15) A supervisory authority may impose conditions or requirements or both on an authorised investment business firm which is constituted as an unincorporated body of persons or which is a sole trader, in order to achieve an equivalent level of supervision to that pertaining to an authorised investment business firm which is constituted as a corporate body.

(16) It shall be an offence for a proposed investment business firm or any other person to apply for authorisation under this section knowingly or recklessly using false or misleading information, or knowingly or recklessly making false or misleading statements, in relation to an application for an authorisation under this section.

⁽¹⁾ O.J. No. L.141 11/6/93.

⁽¹⁾ O.J. No. L.141 11/6/93.

⁽¹⁾ O.J. No. L.141 11/6/93.