Stock Exchange Act, 1995

• Permanent Page URL

Number 9 of 1995

STOCK EXCHANGE ACT, 1995

ARRANGEMENT OF SECTIONS

PART I

Preliminary and General

PART II

Stock Exchanges

PART III

Membership of Stock Exchanges

PART IV

Regulation and Supervision of Stock Exchanges and Member Firms

PART V

Auditors

PART VI

Miscellaneous

PART VII

Enforcement, Offences and Penalties

FIRST SCHEDULE

SECOND SCHEDULE

Number 9 of 1995.

STOCK EXCHANGE ACT, 1995

AN ACT TO REPEAL THE STOCK EXCHANGE (DUBLIN) ACT, 1799, AND THE STOCKBROKERS (IRELAND) ACT, 1918, AND TO MAKE PROVISION FOR THE ESTABLISHMENT, SUPERVISION AND REGULATION OF STOCK EXCHANGES AND THEIR MEMBER FIRMS AND TO PROVIDE FOR RELATED MATTERS. [14th June, 1995]

BE IT ENACTED BY THE OIREACHTAS AS FOLLOWS:

PART I

Preliminary and General

Short title.

1.—This Act may be cited as the Stock Exchange Act, 1995.

Commencement.

2.—This Act shall come into operation on such day or days as may be appointed by order or orders made by the Minister, either generally or with reference to any particular purpose or provision, and different days may be so appointed for different purposes and different provisions of this Act.

Interpretation.

3.—(1) In this Act, unless the context otherwise requires—

“approval” means an approval under section 9 of this Act ;

“approved stock exchange” means a stock exchange which has been approved of under section 9 of this Act;

“associated undertaking” means—

(a) an undertaking in which a qualifying capital interest equal to 20 per cent, or more of all such interests is held and which is not a subsidiary undertaking, or

(b) an undertaking over whose operating and financial policy a significant influence is exercised and which is not a subsidiary undertaking,

and for the purposes of paragraph (a) of this definition, interests held by persons acting in their own name but on behalf of another person shall be deemed to be held by that other person;

“authorised member firm” means a member firm which has been authorised by the Bank under section 18 of this Act;

“authorisation” means an authorisation granted under section 18 of this Act, unless otherwise specified;

“authorised officer” means a person authorised under section 55 of this Act;

“the Bank” means the Central Bank of Ireland;

“client money requirements” has the meaning assigned to it by section 52 of this Act;

“the Commission” means the Commission of the European Communities;

“competent authority” means a competent authority in a Member State, for the purpose of Council Directive No. 93/22/EEC of 10 May, 1993⁽¹⁾, or for the purpose of Council Directive No. 93/6/EEC of 15 March, 1993(1) , or for the purposes of Council Directive 77/780/EEC of 12 December, 1977(2) , as amended by Council Directive 89/646/EEC of 15 December, 1989(3) ;

“the Companies Acts” means the Companies Acts, 1963 to 1990, and every enactment which is to be construed with them as one Act;

“the Court” means the High Court;

“credit institution” means a credit institution within the meaning of Article 1 of Council Directive 77/780/EEC of 12 December, 1977⁽²⁾ as amended by Council Directive 89/646/EEC of 15 December, 1989⁽³⁾, but does not include the institutions referred to in Article 2 (2) of that Directive;

“director” includes any person occupying the position of director by whatever name called and any person who effectively directs or has a material influence over the business of an approved stock exchange or authorised member firm;

“former approved stock exchange” means an approved stock exchange whose approval has been revoked;

“former authorised member firm” means an authorised member firm whose authorisation has been revoked;

“functions” includes powers and duties;

“home Member State” means—

(a) where the member firm or proposed member firm is a natural person, the Member State in which his head office is situated, or

(b) where the member firm or proposed member firm is a legal person, the Member State in which its registered office is situated or, if under its national law it has no registered office, the Member State in which its head office is situated, or

(c) in the case of a market, the Member State in which the registered office of the body which provides trading facilities is situated or, if under its national law it has no registered office, the Member State in which that body's head office is situated;

“host Member State” means the Member State in which a member firm has a branch or provides services;

“indirect acquisition” shall be construed in accordance with Council Directive 93/22/EEC of 10 May, 1993⁽¹⁾;

“indirect disposal” shall be construed in accordance with Council Directive 93/22/EEC of 10 May, 1993⁽¹⁾;

“indirect shareholders” shall be construed in accordance with Council Directive 93/22/EEC of 10 May, 1993(1) ;

“indirect subsidiary” shall be construed in accordance with Council Directive 93/22/EEC of 10 May, 1993⁽¹⁾;

“investment instruments” includes—

(a) transferable securities, units or shares in undertakings for collective investments in transferable securities within the meaning of the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 ( S.I. No. 78 of 1989 ), and any subsequent amendments thereto, financial futures contracts including index futures contracts, commodity futures contracts, future or forward interest rate agreements, interest rate swaps, exchange rate swaps, warrants or other instruments entitling the holder to subscribe for investment instruments as set out in this definition, borrowing and lending of transferable securities, repurchase agreements, units in a unit trust, shares in an investment variable capital or fixed capital company, capital contributions to an investment limited partnership, debentures, including debenture stock, loan stock, bonds, certificates of deposit, other instruments creating or acknowledging indebtedness, Government and public securities, including loan stock, bonds and other instruments creating indebtedness issued by or on behalf of a government, local authority or public authority, bonds and other instruments creating or acknowledging indebtedness issued by or on behalf of any body corporate or mutual body, and certificates representing securities,

(b) certificates or other instruments which confer—

(i) property rights in respect of any investment instrument referred to in paragraph (a) of this definition; or

(ii) any right to acquire, dispose of, underwrite or convert an investment instrument, being a right to which the holder would be entitled if he held any such investment to which the certificate or instrument relates; or

(iii) a contractual right (other than an option) to acquire any such investment instrument otherwise than by subscription,

(c) options in any instrument referred to in paragraph (a) of this definition,

(d) any investment instrument in dematerialised form, and

(e) any instrument similar to investment instruments defined in subparagraphs (a), (b), (c) or (d) of this definition,

but this definition shall not be construed as applying to—

(I) any instrument acknowledging or creating indebtedness for, or for money borrowed to defray, the consideration payable under a contract for the supply of goods or services; or

(II) a cheque, a banker's draft or a letter of credit; or

(III) a banknote, a statement showing a balance in a current, deposit or savings account or (by reason of any financial obligation contained in it) to a lease or other disposition of property, or an insurance policy;

“investment limited partnership” has the meaning assigned to it by the Investment Limited Partnerships Act, 1994 ;

“investment services” means all or any of the following services:

(a) reception and transmission, on behalf of investors, of orders in relation to one or more investment instrument;

(b) execution of orders in relation to one or more investment instrument other than for own account;

(c) dealing in one or more investment instrument for own account;

(d) managing portfolios of investments in accordance with mandates given by investors on a discretionary client-by-client basis where such portfolios include one or more investment instrument;

(e) underwriting in respect of issues of one or more investment instrument or the placing of such issues or both;

“Irish Stock Exchange” means the body commonly known on or before the coming into operation of this section as the “Irish Unit of the International Stock Exchange of the United Kingdom and the Republic of Ireland Limited” and the body known as the Irish Stock Exchange Limited after the coming into operation of this Act;

“member firm” means any person who is a member of an approved stock exchange and whose regular occupation or business is the provision of investment services within the meaning of paragraphs (a) or (b) or (c), or any or all of these, of the definition of “investment services” on or off the floor of a stock exchange on a professional basis;

“Member State” means a Member State of the European Communities;

“the Minister” means the Minister for Finance;

“officer”, in relation to a stock exchange or member firm, means a director, chief executive, manager or secretary, by whatever name called, and in relation to an offence, also includes any person who purports to act as an officer of the said stock exchange or member firm;

“prescribed” means prescribed by regulations made by the Minister and cognate words shall be construed accordingly;

“proposed member firm” means a person who is seeking authorisation from the Bank to be an authorised member firm;

“proposed stock exchange” means a person who is seeking approval from the Bank to be an approved stock exchange;

“qualifying capital interest” shall have the meaning assigned to it in Regulation 35 of the European Communities (Companies: Group Accounts) Regulations, 1992 ( S.I. No. 201 of 1992 ), and any subsequent amendments thereto;

“qualifying shareholder” means a person who has or controls a qualifying holding;

“qualifying holding” means a direct or indirect holding of shares or other interest in a proposed stock exchange or an approved stock exchange or a proposed member firm or authorised member firm which represents 10 per cent. or more of the capital or of the voting rights, or 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 proposed stock exchange or approved stock exchange or proposed member firm or authorised member firm in which a holding subsists;

“related undertakings” means—

(a) companies related within the meaning of section 140 (5) of the Companies Act, 1990 , and subsequent amendments thereto, or

(b) undertakings where the business of those undertakings has been so carried on that the separate business of each undertaking, or a substantial part thereof, is not readily identifiable, or

(c) undertakings where the decision as to how and by whom each shall be managed can be made either by the same person or by the same group of persons acting in concert;

“rules” means rules other than rules which solely give effect to—

(a) the European Community Stock Exchange Regulations, 1984 ( S.I. No. 282 of 1984 ), as amended or extended from time to time,

(b) the European Communities (Stock Exchange) (Amendment) Regulations, 1991 ( S.I. No. 18 of 1991 ), as amended or extended from time to time,

(c) the European Communities (Transferable Securities and Stock Exchange) Regulations, 1992 ( S.I. No. 202 of 1992 ), as amended or extended from time to time,

(d) Part V of the Companies Act, 1990 ,

(e) rules relating to matters for which an approved stock exchange exercises authority, delegated other than under this Act,

(f) the Companies (Stock Exchange) Regulations, 1990 ( S.I. No. 337 of 1990 ),

(g) any rules made by an approved stock exchange relating solely to the regulation of companies for which that stock exchange provides trading facilities in their stock,

(h) listing-type functions contained in the Companies Act, 1990 ;

“statutory functions”, in relation to the Bank, means its functions—

(a) under the Central Bank Acts, 1942 to 1989, and any enactment amending those Acts,

(b) imposed by virtue of the ACC Bank Act, 1992 (Section 4) Regulations, 1992 ( S.I. No. 373 of 1992 ), the ICC Bank Act, 1992 (Section 3) Regulations, 1993 ( S.I. No. 24 of 1993 ), the European Communities (Licensing and Supervision of Banks) Regulations, 1979 ( S.I. No. 414 of 1979 ), the European Communities (Licensing and Supervision of Credit Institutions) Regulations, 1992 ( S.I. No. 395 of 1992 ) or the European Communities (Consolidated Supervision of Credit Institutions) Regulations, 1992 ( S.I. No. 396 of 1992 ),

(c) under the Unit Trusts Act, 1990 ,

(d) under the Building Societies Act, 1989 ,

(e) under the Companies Act, 1990 ,

(f) under the Trustee Savings Banks Act, 1989 ,

(g) under the Investment Limited Partnerships Act, 1994 ,

(h) under the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 ( S.I. No. 78 of 1989 ), and any instruments amending that instrument,

(i) under any other enactment or instrument made under an enactment, and

(j) under this Act;

“stock exchange” means an organised financial market whose members provide an investment service (within the meaning of paragraphs (a), (b) and (c) of the definition in this section of “investment services”) in respect of investment instruments, but excluding any exchange involved wholly or mainly in financial futures or options and coming within the provisions of Chapter VIII of Part II of the Central Bank Act, 1989 ;

“subsidiary” means a subsidiary within the meaning of section 155 of the Companies Act, 1963 ;

“undertaking” means a body corporate, a partnership, an unincorporated body of persons or a sole trader.

(2) References in this Act to books, records or other documents, or to any of them, shall be construed as including any document or information kept in a non-legible form (whether stored electronically or otherwise) which is capable of being reproduced in a legible form and all the electronic or other automatic means, if any, by which such document or information is so capable of being reproduced and to which the person, whose books, records or other documents (as so construed) are inspected for the purposes of this Act, has access.

(3) References in this Act to “competence” in relation to any director or manager means competence in respect of matters in which such director or manager concerned would be expected to be competent in the discharge of his professional responsibilities.

(4) Where a member firm is constituted as an unincorporated body of persons, in this Act—

(a) references to “memorandum and articles of association” or to “memorandum of association” or to “articles of association” shall be construed as references to the partnership agreement or other constitutional document of the body of persons concerned, and

(b) references to “director” shall be construed as references to every member, officer, partner or other person holding any proprietary, voting or other interest in the body of persons concerned and includes any person who effectively directs or has a material influence over the business of the body of persons concerned, and

(c) references to “board of directors” shall be construed as references to the partners, committee, council or other organ of management of the body of persons concerned, and

(d) references to “shareholder” and “qualifying shareholder” shall be construed as references to any partner, member or other person holding any proprietary, voting or other interest in the body of persons concerned.

(5) In this Act, references to an “employee” and cognate words shall be construed to include references to a person employed under a contract of service or a contract for services and references to a person employed otherwise than under a contract of service or a contract for services.

Repeals.

4.—The Stock Exchange (Dublin) Act, 1799, and the Stockbrokers (Ireland) Act, 1918, are hereby repealed.

Service of notices.

5.—(1) Where a notice or direction or other document is authorised or required by or under this Act or regulations made thereunder to be served on a person, it shall, unless otherwise specified in this Act, be addressed to him and shall be served on or given to him in one of the following ways—

(a) where it is addressed to him by name, by delivering it to him, or

(b) by leaving it at the address at which he ordinarily resides or, in a case in which an address for service has been furnished, at that address, or

(c) by sending it by ordinary prepaid post addressed to him at the address at which he ordinarily resides or, in a case in which an address for service has been furnished, at that address, or

(d) in the case of an officer or employee of a stock exchange whether approved or otherwise, or a proposed stock exchange or a member firm whether authorised or otherwise, or a proposed member firm, by sending it to him by ordinary prepaid post addressed to him at the address of the head office of that stock exchange or member firm or proposed stock exchange or proposed member firm.

(2) Any such document may—

(a) in the case of a stock exchange whether approved or otherwise, or a proposed stock exchange or a member firm whether authorised or otherwise or a proposed member firm or any other body corporate, be served on the secretary or other employee or officers of that stock exchange or member firm or other body corporate, or

(b) in the case of a partnership, be served on any partner, or

(c) in the case of an unincorporated association other than a partnership, be served on any member of its governing body.

Expenses.

6.—(1) The expenses incurred by the Minister and the Minister for Enterprise and Employment in the administration of this Act shall, to such extent as may be sanctioned by the Minister, be paid out of moneys provided by the Oireachtas.

(2) The expenses incurred by the Bank in the administration of this Act shall be paid out of the general fund of the Bank except where otherwise provided in this Act or any other enactment.

Laying of regulations before Houses of Oireachtas.

7.—Every regulation made under this Act shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the regulation is passed by either such House within the next 21 days on which that House has sat after the regulation is laid before it, the regulation shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

PART II

Stock Exchanges

Prohibition of unlawful stock exchanges.

8.—(1) No person shall establish a stock exchange in the State unless it is an approved stock exchange.

(2) No person shall operate a stock exchange established in the State unless it is an approved stock exchange.

(3) A person who contravenes subsection (1) or (2) of this section shall be guilty of an offence.

(4) In this section “established in the State” excludes any stock exchange which provides services electronically to Irish clients and whose head office or registered office is outside the State.

Grant of approval.

9.—(1) Subject to the provisions of this section, the Bank may grant or refuse to grant to any person applying to it under this section an approval to operate as an approved stock exchange.

(2) The grant of an approval under subsection (1) of this section may be given unconditionally or may be given subject to such conditions or requirements or both as the Bank considers fit.

(3) Whenever the Bank refuses to approve of a proposed stock exchange under this section, it shall serve notice on the proposed stock exchange, and on the Minister, of its refusal to grant approval and state the reasons therefor.

(4) An application for approval under subsection (1) of this section shall be in such form and contain such particulars as the Bank shall specify from time to time and, without prejudice to the generality of the aforesaid, shall include a copy of the memorandum of association and articles of association of the proposed stock exchange and a copy of the rules under which the applicant proposes to conduct its business.

(5) A proposed stock exchange shall not be approved of by the Bank unless—

(a) it is a company incorporated under the Companies Acts,

(b) it satisfies the Bank that the memorandum of association and articles of association and the rules of the proposed stock exchange contain sufficient provisions so as to enable it to operate in accordance with this Act and in accordance with any conditions or requirements, or both, as the Bank may impose,

(c) it has the minimum level of capital, which shall be specified by the Bank under this section,

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

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

(f) its registered office and its head office are in the State, and

(g) its rules provide that—

(i) where there has been an inquiry into any disciplinary matter, at the conclusion of the inquiry, a written report of that inquiry shall be made by or on behalf of that stock exchange, and

(ii) the stock exchange shall send a copy of a report of an inquiry into any disciplinary matter to the Minister and the Minister for Enterprise and Employment, where the Minister, with the consent of the Minister for Enterprise and Employment, so requests.

(6) The Bank shall specify, from time to time, the level of capital to be maintained by an approved stock exchange.

(7) A proposed stock exchange shall not be granted approval under this section unless its memorandum of association, articles of association or its rules provide that the Board of Directors of that stock exchange is broadly based and is so composed so as to secure a balance between the interests of the different member firms and users of the stock exchange services, and the public interest.

(8) In the interests of the common good, and to promote the protection of investors and the maintenance of proper standards of conduct and practice, the requirements of subsection (7) of this section shall not be satisfied unless—

(a) the Bank is satisfied that the Board of a stock exchange includes a number of persons, independent of the operation or management of that stock exchange and independent of its member firms, for the purpose of facilitating the promotion of the protection of investors and the maintenance of proper standards of conduct and practice;

(b) the chairperson of the Board of the stock exchange is a person independent of the operation or management of that stock exchange and independent of its member firms; and

(c) the rules or memorandum of association or articles of association of the stock exchange provide either or both of the following, namely that—

(i) the Board of that stock exchange can consider disciplinary matters involving, and complaints against, member firms, whether at the request of the member firm concerned or of the management of the stock exchange or of the complainant or otherwise,

(ii) if the rules provide that such disciplinary matters or complaints can be considered by a number of members of the Board, the rules provide that in such cases the Board members shall include at least one member of the Board who is independent of the management and operation of that stock exchange and independent of its member firms.

(9) The Bank may impose a requirement on a proposed stock exchange or an approved stock exchange to organise its business or corporate structure, or the control of any associated or related undertaking not supervised by the Bank, such that the stock exchange concerned 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 Bank under this Act.

(10) The Bank may, at any time prior to the grant or refusal of approval, request further information from a proposed stock exchange or may instruct an authorised officer to make such inquiries or carry out such investigation as may be necessary for the purpose of evaluating an application under this section and such inquiries or investigations shall be carried out in accordance with this Act.

(11) Any appointment to the Board of Directors of an approved stock exchange or to the post of manager, chief executive or post equivalent thereto on, or after, the granting of an approval under this section shall be subject to the prior approval in writing of the F Bank, which said approval shall not be given unless the approved stock exchange satisfies the Bank as to the probity and competence of the proposed appointee.

(12) Any proposed amendment or addition to the said memorandum of association or articles of association or rules of an approved stock exchange shall be made only with the prior consent in writing of the Bank, and the Bank may approve of, or refuse to approve of, such amendment or addition.

(13) An approved stock exchange shall establish and maintain procedures to investigate complaints against itself and its member firms.

(14) A proposed stock exchange shall be informed—

(a) within six months of the date of receipt of the application for approval or within six months of entry into force of this section, whichever is the later, whether or not the approval has been granted, or

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

(15) It shall be an offence for a proposed stock exchange to apply for approval under this section knowingly or recklessly using false or misleading information or by knowingly or recklessly making false or misleading statements.

(16) (a) Subject to paragraph (b) of this subsection, the Minister may lay before each House of the Oireachtas a copy of a report into any disciplinary matter prepared by or on behalf of an approved stock exchange.

(b) The Minister shall not lay a report referred to in paragraph (a) of this subsection before each House of the Oireachtas unless he and the Minister for Enterprise and Employment think it proper to do so having due regard to the exigencies of the common good and the rights of any person referred to in that report.

(c) A report laid before each House of the Oireachtas under paragraph (a) of this subsection shall be privileged but the conferring of privilege on that report shall not affect the rights, duties or liabilities of any person concerned with the preparation or publication by or on behalf of an approved stock exchange of that report.

Existing stock exchange.

10.—(1) Notwithstanding section 8 of this Act, the Irish Stock Exchange shall be deemed to be an approved stock exchange on the coming into operation of this section and shall stand approved of under this Act until the Bank has granted or refused an approval to it:

Provided that, no later than three months after the coming into operation of this section, it—

(a) incorporates as a company under the Companies Acts, if it is not already so incorporated, and

(b) applies to the Bank under section 9 of this Act for an approval and, in that section, references to proposed stock exchange shall be construed accordingly.

(2) Pending a decision by the Bank to approve or not to approve of the Irish Stock Exchange or during the three months referred to in subsection (1) of this section, or during both such times the Bank may do either or both of the following, namely:

(a) impose on it such conditions or requirements or both as it thinks fit relating to the proper and orderly regulation and supervision of the Irish Stock Exchange or in relation to the protection of investors or in relation to both or in respect of associated undertakings or related undertakings, or both;

(b) issue directions under this Act.

(3) The Irish Stock Exchange may appeal to the Court against the imposition of any condition or requirement or the giving of any direction under this section.

(4) On hearing an application under subsection (3) of this section, the Court may confirm, vary or rescind any condition, requirement or direction imposed under this section.

Imposition of conditions or requirements on approved stock exchanges.

11.—(1) Without prejudice to section 9 of this Act, where the Bank grants an approval under that section or consents to any proposed amendment or addition to a memorandum of association or articles of association or rules, it may do all or any of the following in the interests of the proper and orderly regulation and supervision of approved stock exchanges and their member firms or any or all of these:

(a) make its approval or consent subject to such conditions or requirements or both as it considers fit,

(b) impose conditions or requirements or both which relate to matters in an associated undertaking or related undertaking,

(c) at any time after its approval, impose conditions or require- ments or both on an approved stock exchange and either amend or revoke any condition or requirement or both imposed under this paragraph or paragraph (a) or (b) of this subsection,

(d) at any time after its approval, impose a requirement that the approved stock exchange add, amend or revoke rules of that stock exchange,

(e) at any time after its approval, impose a requirement that the approved stock exchange add to or amend the memorandum of association or articles of association of that stock exchange:

Provided that the said conditions or requirements do not contravene any guidelines in that behalf which may be issued to the Bank, from time to time, by the Minister with the consent of the Minister for Enterprise and Employment in the interests of the proper and orderly regulation and supervision of stock exchanges and their member firms and published in the Iris Oifigiúil.

(2) Any condition or requirement referred to in subsection (1) of this section may be imposed in relation to any or all of the following, namely—

(a) an approved stock exchange;

(b) all approved stock exchanges;

(c) a class of approved stock exchange;

(d) a specified period of time or times;

(e) all authorised member firms;

(f) a particular class of authorised member firm;

(g) an associated undertaking or related undertaking of an approved stock exchange;

(h) any matter, as the Bank may consider appropriate, in the interests of the proper and orderly regulation and supervision of approved stock exchanges and their member firms.

(3) An approved stock exchange or member firm may appeal to the Court against the imposition of any condition or requirement imposed under subsection (1) of this section and, on hearing an appeal under this section, the Court may confirm, vary or rescind any condition or requirement imposed under this section.

Refusal to consent to amendment of rules, etc.

12.—(1) Subject to subsection (2) of this section, the Bank may refuse to consent to an amendment of, or addition to, the memorandum of association, articles of association, or both, or to the rules of an approved stock exchange, in all or any of the following circumstances, namely, where it is expedient to do so in the interest of the proper and orderly regulation of that approved stock exchange or its authorised member firms or in order to protect investors.

(2) Whenever the Bank refuses to consent to an amendment or addition to the memorandum of association, or articles of association, or both, or to the rules of an approved stock exchange, it shall serve notice on the approved stock exchange concerned stating that it refuses to consent to the amendment or addition and setting out the reasons for the refusal in the notice.

Procedure on refusal to grant approval, etc.

13.—(1) A proposed stock exchange on whom a notice has been served under section 9 (3) of this Act or an approved stock exchange on whom a notice has been served under section 12 (2) of this Act may, within 21 days of receipt of the notice, appeal to the Minister and the Minister shall consider any such appeal and may uphold or reject it.

(2) When considering an appeal under this section, the Minister shall consult with the Minister for Enterprise and Employment, the Bank and the proposed stock exchange or the approved stock exchange concerned as the case may be; provided that the period taken for consideration does not exceed three months.

(3) If the Minister, with the consent of the Minister for Enterprise and Employment, upholds an appeal made under this section, he shall inform the Bank of his decision and shall publish notice of his decision in the Iris Oifigiúil within 28 days of such decision being communicated to the Bank and the Bank shall grant approval of the proposed stock exchange or consent to the proposed amendment of or addition to the memorandum of association, articles of association or rules of an approved stock exchange.

(4) An appeal under this section shall be accompanied by the prescribed fee.

(5) The Public Offices Fees Act, 1879, shall not apply to any fees charged under this section.

Revocation of approval.

14.—(1) The Bank may revoke its approval of an approved stock exchange in all or any of the following circumstances, namely, where—

(a) a request has been made to it in that behalf by an approved stock exchange,

(b) an approved stock exchange—

(i) has failed to operate as a stock exchange within 12 months of the date on which the approval to be an approved stock exchange was granted, or

(ii) has failed to operate as a stock exchange for a period of more than 6 months, or

(iii) is being wound up.

(2) Without prejudice to the power of the Bank to revoke an approval under subsection (1) of this section, the Bank may apply to the Court, in a summary manner, for an order revoking the approval of an approved stock exchange in any or all of the following circumstances, namely, where—

(a) it is expedient to do so in the interest of the proper and orderly regulation of approved stock exchanges or their member firms or in order to protect investors or in any or all of these circumstances;

(b) an approved stock exchange has been convicted on indictment of any offence under this Act or any Act under which the Bank exercises statutory functions or any offence involving fraud, dishonesty or breach of trust;

(c) circumstances have materially changed since the granting of approval to that stock exchange such that, if an application for approval was made at the time of the application to the Court, a different decision would be taken in relation to the application for approval;

(d) the approval was obtained by knowingly or recklessly making false or misleading statements, or by knowingly or recklessly using false or misleading information;

(e) an approved stock exchange has failed to comply to a material degree with a requirement of this Act;

(f) an approved stock exchange no longer fulfils any or all of the conditions or requirements which were imposed when approval was granted or which were subsequently imposed;

(g) an approved stock exchange—

(i) no longer complies with capital or other financial requirements, specified by the Bank from time to time, or

(ii) is not maintaining or is unlikely to be able to maintain adequate capital or other financial resources having regard to the volume and nature of its business;

(h) an approved stock exchange becomes unable or, in the opinion of the Bank, is likely to become unable to meet its obligations to its creditors or suspends payments lawfully due;

(i) a director, manager or qualifying shareholder of an approved stock exchange is no longer deemed by the Bank to fulfil the conditions of competence and probity required by section 9 of this Act to be a director or manager or a qualifying shareholder of an approved stock exchange;

(j) an approved stock exchange has so organised its business or corporate structure that the approved stock exchange and, where appropriate, any related undertaking or associated undertaking, either collectively or individually, is no longer capable of being supervised to the satisfaction of the Bank under this Act.

(3) When the Bank proposes to revoke the approval of an approved stock exchange or proposes to apply to the Court for an order to revoke approval of an approved stock exchange the following procedure shall apply, namely, the Bank shall serve notice on the stock exchange concerned and each of its member firms of its intention and shall state its reasons in the said notice.

(4) Where an application is made to the Court under this section the Court may make such interim or interlocutory orders as the circumstances may require.

(5) Where approval of a stock exchange is revoked and where the stock exchange concerned is not a company which is being wound up—

(a) the former approved stock exchange and its member firms shall continue to be subject to the duties and obligations imposed by this Act until all the liabilities, duties and obligations of the said stock exchange have been discharged to the satisfaction of the Bank,

(b) the former approved stock exchange shall, as soon as possible, after the revocation, notify the Bank, its member firms and such other persons, if any, as the Bank indicates are to be notified of the measures being taken to discharge without undue delay the liabilities, duties and obligations of the said stock exchange,

(c) in the case where—

(i) the former approved stock exchange has notified the Bank in accordance with paragraph (b) of this subsection and the Bank is of the opinion that the measures being taken or proposed to be taken for the purposes of that paragraph are not satisfactory, or

(ii) the former approved stock exchange has not so notified the Bank and the Bank is of the opinion that the said stock exchange has failed to so notify as soon as possible after the approval is revoked, or

(iii) the Bank is of the opinion that the former approved stock exchange has failed to take all reasonable steps to notify persons which the Bank has indicated, under paragraph (b) of this subsection, are to be notified,

then, subject to subsection (9) of this section, the Bank may give a direction in writing to the former approved stock exchange or, where necessary, to any of its authorised member firms for such period, not exceeding six months, prohibiting the former approved stock exchange or its authorised member firms, as the case may be, so directed from any or all of the following, namely—

(I) creating any liabilities;

(II) dealing with or disposing of any assets or specified assets of the former approved stock exchange or of its authorised member firms in any manner;

(III) engaging in any transaction or class of transactions or specified transaction;

(IV) making payments;

without the prior authorisation of the Bank, and the Bank may further direct that former approved stock exchange within two months of the initial direction to prepare and submit to the Bank for its approval a scheme for the orderly discharge of the liabilities, duties and obligations concerned.

(6) Where the approval of a stock exchange is revoked and the stock exchange is a company which is being wound up—

(a) the liquidator of the former approved stock exchange shall, in addition to his duties and obligations in respect of the winding-up, be subject to the duties and obligations to which the former approved stock exchange would be subject if it were a former approved stock exchange to which subsection (5) of this section relates and that subsection shall for the purposes of this subsection be construed accordingly;

(b) notwithstanding paragraph (a) of this subsection, the Bank may, where its approval of a stock exchange is revoked and where the Bank considers it appropriate in the circumstances, remove, on giving notice to that effect in writing to the former approved stock exchange, the duties and obligations imposed on the liquidator concerned to comply with paragraph (b) of subsection (5) of this section and may impose in writing on that liquidator such further duty or obligation which corresponds to that set out in paragraph (b) of that subsection;

(c) nothing in this subsection shall be construed as affecting any duty or obligation under this Act of the member firms of the former approved stock exchange concerned.

(7) The Bank shall publish notice of any revocation of an approval of a stock exchange in the Iris Oifigiúil within 28 days of revocation.

(8) An approved stock exchange whose approval has been revoked under this Act shall cease to operate as a stock exchange and it shall be an offence for any person to provide an investment service on a former approved stock exchange.

(9) Where the Bank gives a direction under subsection (5) of this section, it may apply to the Court, on being satisfied that the direction has not been complied with and the Court may confirm or set aside or vary the direction on such terms and for such period as the Court thinks fit.

(10) The Bank shall not exercise its powers under subsection (2) (i) of this section unless it has given the approved stock exchange an opportunity to remove the director, manager or qualifying shareholder or otherwise deal with the concerns of the Bank in relation to the probity or competence of the person concerned within such period of time as the Bank may specify.

(11) An application under this section may be heard otherwise than in public.

Maintenance of books and records by approved stock exchanges.

15.— (1) (a) An approved stock exchange shall keep at an office or offices within the State such books and records (including books of accounts) as may be specified, from time to time, by the Bank and shall notify the Bank of the address of every office at which any such books or records are kept.

(b) A person who contravenes paragraph (a) of this subsection shall be guilty of an offence.

(2) The Bank may specify different books and records for the purpose of this section in relation to different approved stock exchanges or different classes of approved stock exchange.

(3) Books and records kept pursuant to this section shall be—

(a) in addition to any books or other records to be kept by or under any other enactment, and

(b) retained at least for such period as the Bank may specify.

PART III

Membership of Stock Exchanges

Competent authority.

16.—(1) The Bank shall be the competent authority in the State for member firms for the purpose of Council Directive 93/22/EEC of 10 May, 1993⁽¹⁾.

(2) The Bank shall be the competent authority for authorised member firms for the purpose of Council Directive 93/6/EEC of 15 March, 1993(1) .

Prohibition of unlawful member firm.

17.—(1) Any person who—

(a) claims to be a member firm, or

(b) holds himself out as a member firm,

shall be guilty of an offence under this Act unless that person is such a member firm.

(2) It shall be an offence for a person to be a member firm of an approved stock exchange unless he has been authorised—

(a) by the Bank under section 18 of this Act, or

(b) by a competent authority in another Member State, for the purpose of Council Directive 93/22/EEC of 10 May, 1993(1) as amended or extended from time to time, whose authorisation includes any or all of the services referred to in section A, 1 (b) or 2 of the Annex to that Directive, or

(c) as a European Communities credit institution in a Member State, whose authorisation under Council Directive 77/780/EEC of 12 December, 1977(2) as amended by Council Directive 89/646/EEC of 15 December, 1989(3) as amended or extended from time to time, includes one or more investment services equivalent to those set out in section A, 1 (b) or 2 of the Annex to Council Directive 93/22/EEC of 10 May, 1993⁽¹⁾.

Grant of authorisation.

18.—(1) Subject to the provisions of this Act, the Bank may grant or refuse to grant to any person applying to it under this section an authorisation to operate as an authorised member firm.

(2) The grant of an authorisation under subsection (1) of this section may be given unconditionally or it may be given subject to such conditions or requirements or both as the Bank considers fit.

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

(4) An application for authorisation under subsection (1) of this section shall be in such form and contain such particulars as the Bank shall specify from time to time and, without prejudice to the generality of the aforesaid, shall include a copy of the memorandum of association and articles of association of the proposed member firm and such particulars as the Bank may request in relation to—

(a) the type of business to be carried on or likely to be carried on by the proposed member firm, and

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

(5) A proposed member firm shall not be authorised by the Bank unless—

(a) it is a company incorporated by statute or under the Companies Acts, or 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,

(b) it satisfies the Bank that the memorandum of association and articles of association of the proposed member firm contain sufficient provisions so as to enable it to operate in accordance with this Act, and in accordance with any conditions or requirements or both as the Bank may impose,

(c) it has the minimum level of capital which shall be specified by the Bank under this section,

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

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

(f) it satisfies the Bank as to the organisation and management skills of the proposed member firm and that adequate levels of staff and expertise will be employed to carry out its proposed activities,

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

(h) it satisfies the Bank 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 Bank,

(i) its registered office and its head office are in the State, and

(j) it satisfies the Bank as to its conduct of business, its financial resources and any other matters as the Bank considers necessary in the interests of the proper and orderly regulation and supervision of approved stock exchanges or of member firms or both or in the interests of the protection of investors.

(6) The Bank may set out conditions and requirements, either through the rules of an approved stock exchange or otherwise, in order to monitor the solvency of an authorised member firm which is constituted as an unincorporated body of persons and the solvency of its proprietors.

(7) The Bank shall impose conditions or requirements, from time to time, in respect of the level of capital to be maintained by an authorised member firm.

(8) Any appointment to the Board of Directors of an authorised member firm or proposed member firm or to the post of manager, chief executive 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 Bank, which said approval shall not be given unless the authorised member firm satisfies the Bank as to the probity and competence of the proposed appointee.

(9) The Bank may direct an authorised member firm to alter its memorandum of association and articles of association in the interest of the proper and orderly regulation of approved stock exchanges and their member firms or the protection of investors or both.

(10) A proposed amendment to the memorandum of association or articles of association of an authorised member firm shall not be made without the prior consent in writing of the Bank.

(11) An authorisation granted under subsection (1) of this section by the Bank shall specify the classes of investment services which may be provided by the authorised member firm concerned and the authorisation may specify additional services which an authorised member 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 Bank may amend or vary the classes of investment services or other services which may be so provided and such authorisation shall be taken as authorisation of the said firm for the purposes of the said directive.

(12) The Bank may at any time prior to the grant or refusal of an authorisation request further information from the proposed member 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.

(13) (a) In the case of a member firm, the Bank shall apply this Act, having regard to the division of responsibilities between the home and host member states of the member 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, member firms shall be subject to such conditions or requirements or both as may be imposed on them by the Bank in the interests of any or all of the following, namely—

(i) the proper and orderly regulation of stock exchanges and their member firms;

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

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

(15) A proposed member 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 Bank, within a period of six months after the receipt by the Bank of the additional information or the period of twelve months after the receipt of the application, whichever is the sooner.

(16) It shall be an offence for a proposed member firm to apply for authorisation under this section knowingly or recklessly using false or misleading information or knowingly or recklessly making false or misleading statements.

Requests from Commission.

19.—Notwithstanding other provisions of this Act, the Bank shall comply with requests from the Commission to limit or suspend decisions where—

(a) a proposed member firm which is the direct or indirect subsidiary of a parent governed by the law of a State which is not a Member State of the European Community seeks authorisation from the Bank, or

(b) an undertaking which is governed by the law of a State which is not a Member State acquires a holding in any authorised member firm such that the latter would become its subsidiary.

Authorised Member Firms doing business outside the State.

20.—(1) When an authorised member firm wishes to establish a branch in another Member State it shall notify the Bank in writing setting out the address of the proposed branch from which documents may be obtained, the names of the proposed managers and a programme of operations setting out inter alia the types of business envisaged and the proposed organisational structure of the branch.

(2) Subject to subsection (3) of this section, the Bank shall communicate information referred to in subsection (1) of this section to the relevant authority in that other Member State in accordance with the provisions of Council Directive 93/22/EEC of 10 May, 1993(1) , within three months of receiving all information requested of the authorised member firm, and shall inform the authorised member firm accordingly.

(3) Where the Bank does not communicate the information in the manner referred to in subsection (2) of this section, the Bank shall give reasons for the refusal to the authorised member firm and the authorised member firm shall be entitled to appeal to the Court against that decision.

(4) Where an authorised member firm wishes to change any particulars supplied under subsection (1) of this section it shall notify the Bank in writing of any such changes and allow at least one month from the date of the notification before carrying out the changes so as to allow the Bank to exercise its functions under this Act.

(5) When an authorised member firm wishes to provide investment services within the territory of another Member State for the first time but does not propose to establish a branch in that other Member State, it shall notify the Bank in writing setting out the Member State in which it proposes to provide those services and a programme of operations stating in particular the investment service or services it intends to provide.

(6) The Bank shall communicate the information referred to in subsection (5) of this section to the relevant authority in that other Member State in accordance with the provisions of Council Directive 93/22/EEC of 10 May, 1993⁽¹⁾, within one month of receiving all that information.

(7) Where an authorised member firm wishes to change any particulars concerning a programme of operations supplied under subsection (5) of this section it shall notify in writing the Bank and the competent authority in the other Member State in which it proposes to provide or provides investment services of any such changes before carrying out the changes so as to allow the competent authority in the other Member State to carry out its obligations under the provisions of Council Directive 93/22/EEC of 10 May, 1993(1) .

Existing member firms.

21.—(1) Notwithstanding section 17 of this Act, a person whom the Bank deems to have been a member firm of the Irish Stock Exchange on the day immediately prior to the coming into operation of this section, having regard to the member firms listed in the daily official list of the Irish Stock Exchange, shall stand authorised, on the coming into operation of this section, as an authorised member firm until the Bank has granted or refused authorisation to it:

Provided that, no later than three months after the coming into operation of this Part of this Act, it—

(a) draws up a formal partnership agreement, where it is constituted as an unincorporated body of persons, if such agreement does not already exist, and

(b) applies to the Bank under section 18 of this Act for authorisation, and, in that section, references to proposed member firm shall be construed accordingly.

(2) Pending a decision by the Bank to authorise a member firm to whom subsection (1) of this section refers or during the three months referred to in subsection (1) of this section or during both such times, the Bank may do either or both of the following, namely—

(a) impose such conditions or requirements or both as it thinks fit relating to the proper and orderly regulation and supervision of approved stock exchanges and their member firms or in relation to the protection of investors including conditions or requirements or both which relate to matters in an associated undertaking, a related undertaking or in both;

(b) issue directions under this Act.

(3) A person to whom subsection (1) of this section refers may appeal to the Court against the conditions or requirements imposed under this section.

(4) On hearing an application under subsection (3) of this section, the Court may confirm, vary or rescind any condition or requirement imposed under this section.

(5) Notwithstanding section 17 of this Act, a person who falls within subsection (6) of this section may be a member firm of an approved stock exchange until either the 31st day of December, 1995 or it has been authorised by a competent authority in its home Member State, whichever is the earlier.

(6) Subsection (5) of this section applies to persons or branches of persons which—

(a) have their head office and registered office in another Member State,

(b) are subject to prudential regulation in that Member State which is considered by the Bank to be equivalent to the regulation applying to authorised member firms under this Act, and

(c) are recognised as primary dealers by the National Treasury Management Agency.

(7) A member firm falling within subsection (6) of this section shall be subject to such conditions or requirements or both as may be imposed on it by the Bank in the interests of either or both of the following, namely, the proper and orderly regulation and supervision of stock exchanges and their member firms and the protection of investors or clients, and such conditions or requirements or both may be imposed on it by the Bank in respect of associated undertakings or related undertakings.

(8) Section 18 (13) of this Act shall not apply to firms falling within subsection (6) of this section.

Imposition of conditions or requirements on authorised member firms.

22.—(1) Without prejudice to section 18 of this Act, where the Bank grants an authorisation under that section, it may do all or any of the following, namely—

(a) make its authorisation subject to such conditions or requirements or both as it considers fit, relating to the proper and orderly regulation and supervision of an authorised member firm;

(b) impose conditions or requirements or both which relate to matters in an associated undertaking or a related undertaking;

(c) at any time after its approval, impose conditions or requirements or both on an authorised member firm and either amend or revoke any condition or requirement imposed under this paragraph or under paragraph (a) or (b) of this subsection:

Provided that the said conditions or requirements do not contravene any guidelines in that behalf which may be issued to the Bank, from time to time, by the Minister with the consent of the Minister for Enterprise and Employment in the interests of the proper and orderly regulation and supervision of stock exchanges and their member firms and the protection of investors, and published in the Iris Oifigiúil.

(2) Any condition or requirement referred to in subsection (1) of this section may be imposed in relation to any or all of the following, namely—

(a) an authorised member firm;

(b) all authorised member firms;

(c) a class of authorised member firms;

(d) a specified period of time or times;

(e) an associated undertaking or related undertaking;

(f) any matter, as the Bank may consider appropriate, in the interests of the proper and orderly regulation and supervision of approved stock exchanges and their authorised member firms.

(3) An authorised member firm may appeal to the Court against the imposition of any condition or requirement imposed under subsection (1) of this section and, on hearing an appeal under this section, the Court may confirm, vary or rescind any condition or requirement imposed under this section.

Refusal to consent to amendment of memorandum of association or articles of association of an authorised member firm.

23.—(1) Subject to subsection (2) of this section, the Bank may refuse to consent to an amendment of, or addition to, the memorandum of association or articles of association, or both, of an authorised member firm in any or all of the following circumstances, namely, where it is expedient to do so in the interest of the proper and orderly regulation of approved stock exchanges and their authorised member firms or in order to protect investors.

(2) Whenever the Bank refuses to consent to an amendment of or addition to the memorandum of association or articles of association or both of an authorised member firm, it shall serve notice on the authorised member firm concerned stating that it refuses to consent to the amendment or addition and setting out the reasons for the refusal in the notice and the authorised member firm may, within 21 days of receipt of such notice, appeal to the Court against the decision.

Revocation of authorisation.

24.—(1) The Bank may revoke the authorisation of an authorised member firm in all or any of the following circumstances, namely, where—

(a) a request is made to it in that behalf by the authorised member firm;

(b) an authorised member firm—

(i) has failed to operate as a member firm within 12 months of the date on which it was authorised under this Act; or

(ii) has failed to operate as a member firm for a period of more than six months; or

(iii) is being wound up.

(2) Without prejudice to the power of the Bank to revoke an authorisation under subsection (1) of this section, the Bank may apply to the Court in a summary manner for an order revoking the authorisation of an authorised member firm in any or all of the following circumstances, namely, where—

(a) it is expedient to do so in the interest of the proper and orderly regulation of approved stock exchanges or their member firms or in order to protect investors or in any or all of these circumstances;

(b) an authorised member firm has been convicted on indictment of any offence under this Act or any Act under which the Bank exercises statutory functions or any offence involving fraud, dishonesty or breach of trust;

(c) circumstances have materially changed since the granting of the authorisation such that, if an application for authorisation were made at the time of the application to the Court, a different decision would be taken in relation to the application for authorisation;

(d) the authorisation was obtained by knowingly or recklessly making false or misleading statements or by knowingly or recklessly using false or misleading information;

(e) an authorised member firm has failed to comply to a material degree with a condition or requirement of this Act;

(f) an authorised member firm no longer fulfils any or all of the conditions or requirements which were imposed when the authorisation was granted or which were subsequently imposed;

(g) an authorised member firm—

(i) no longer complies with capital or any other financial requirements specified by the Bank, from time to time, or

(ii) is not maintaining or is unlikely to be able to maintain adequate capital resources or other financial resources having regard to the nature and volume of its business;

(h) an authorised member firm becomes unable or, in the opinion of the Bank, is likely to become unable to meet its obligations to its creditors or suspends payments lawfully due;

(i) an authorised member firm has infringed to a material degree a code of conduct or rules of conduct, specified in or set out under section 38 of this Act;

(j) a director, manager or qualifying shareholder of an authorised member firm is no longer deemed by the Bank to fulfil the conditions of competence and probity required by section 18 of this Act to be a director or manager or qualifying shareholder of an authorised member firm;

(k) an authorised member firm has failed to comply with a condition or requirement or both imposed under this Act, and the circumstances are such that the Bank is of the opinion that the stability and soundness of the authorised member firm is or has been materially affected by such a failure;

(l) an authorised member firm has so organised its business or corporate structure such that the authorised member firm and, where appropriate, any related undertaking or associated undertaking, either collectively or individually, is no longer capable of being supervised to the satisfaction of the Bank under this Act.

(3) When the Bank proposes to revoke the authorisation of an authorised member firm or proposes to apply to the Court for an order to revoke the authorisation of a member firm, the following procedure shall apply, namely, the Bank shall serve notice on the authorised member firm of its intention and shall state its reasons in the said notice.

(4) Where an application is made to the Court under this section, the Court may make such interim or interlocutory orders as the circumstances may require.

(5) Persons (being persons who were authorised member firms) whose authorisation has been revoked (in this section referred to as “former authorised member firms”) shall continue to be responsible for arranging the discharge of all contracts entered into before announcement of the revocation of the authorisation, unless the Bank states otherwise.

(6) Where the authorisation of an authorised member firm is revoked and the former authorised member firm, if a company, is not being wound up, or, if constituted as an unincorporated body of persons, is not the subject of a dissolution order, then—

(a) the former authorised member firm shall continue to be subject to the duties and obligations imposed by this Act and any codes of conduct or rules of conduct or client money requirements or any other conditions or requirements imposed by the Bank under any section of this Act and by the rules of the approved stock exchange of which it is or was a member firm until all the liabilities, duties and obligations of the said member firm have been discharged to the satisfaction of the Bank,

(b) the former authorised member firm shall, as soon as possible after the revocation of the authorisation, notify the Bank and such other persons, if any, as the Bank indicates are to be notified of the measures being taken to discharge without undue delay the liabilities, duties and obligations of the said member firm, and

(c) in the case where—

(i) the former authorised member firm has notified the Bank in accordance with paragraph (b) of this subsection, and the Bank is of the opinion that the measures being taken or proposed to be taken for the purposes of this section are not satisfactory, or

(ii) the former authorised member firm has not so notified the Bank and the Bank is of the opinion that the former authorised member firm has failed to so notify as soon as possible after the authorisation is revoked, or

(iii) the Bank is of the opinion that the former authorised member firm has failed to take all reasonable stepsto notify persons which the Bank has indicated, under paragraph (b) of this subsection, are to be notified,

then, subject to subsection (10) of this section, the Bank may give a direction in writing to the former authorised member firm for such period, not exceeding six months, prohibiting the former authorised member firm so directed from any or all of the following, namely—

(I) creating any liabilities;

(II) dealing with or disposing of any assets or specified assets of the former authorised member firm in any manner;

(III) engaging in any transaction or class of transaction or specified transaction;

(IV) making payments;

without the prior authorisation of the Bank, and the Bank may further direct that former authorised member firm within two months of the initial direction to prepare and submit to it for its approval a scheme for the orderly discharge in full of the liabilities, duties and obligations concerned.

(7) Where the authorisation of a member firm is revoked and the former authorised member firm, if a company, is being wound up, or, if constituted as an unincorporated body of persons, is the subject of a dissolution order, then—

(a) the liquidator or receiver of the former authorised member firm shall, in addition to his duties and obligations in respect of the winding-up, be subject to the duties and obligations to which the former authorised member firm would be subject if it were an authorised member firm to which subsection (6) of this section relates and that subsection shall for the purposes of this section be construed accordingly,

(b) the liquidator or receiver of the former authorised member firm shall also be subject to all rules and regulations of the relevant stock exchange and any conditions or requirements imposed under this Act as if the liquidator or receiver were an authorised member firm, and

(c) notwithstanding paragraph (a) of this subsection, the Bank may, where authorisation is revoked and where the Bank considers it appropriate in the circumstances, remove, on giving notice in writing to the liquidator or receiver of the former authorised member firm, the duties and obligations imposed on the liquidator or receiver concerned to comply with paragraph (b) of subsection (6) of this section and may impose, in writing, on that liquidator or receiver such further duty or obligation as corresponds to that set out in paragraph (b) of that subsection.

(8) The Bank shall publish notice of revocation of an authorisation of an authorised member firm in the Iris Oifigiúil within 28 days of such revocation.

(9) A former authorised member firm shall cease to operate as a member firm and it shall be an offence for a former authorised member firm to operate as an authorised member firm.

(10) Where the Bank gives a direction under subsection (6) of this section, it may apply to the Court on being satisfied that the direction has not been complied with and the Court may confirm, vary or set aside the direction on such terms and for such period as the Court thinks fit.

(11) The Bank shall not exercise its powers under subsection (2) (j) of this section unless it has given an authorised member firm an opportunity to remove the director, manager or qualifying shareholder or otherwise deal with the concerns of the Bank in relation to the probity or competence of the person concerned within such period of time as the Bank may specify.

(12) An application under this section may be heard otherwise than in public.

Register of member firms.

25.—(1) The Bank shall require that a register or registers of member firms of an approved stock exchange or approved stock exchanges (to be known and in this Act to be referred to as a “Register of member firms”) be kept by the approved stock exchange or stock exchanges in question at such premises as the Bank may direct.

(2) A Register of member firms shall be open for inspection by any member of the public at all reasonable times on the payment of such fee as the Bank may specify or approve.

(3) A copy of the said Register shall be published annually in such manner as the Bank directs showing the changes that have taken place during the preceding year.

(4) A Register of member firms shall include the names and addresses of member firms and such other particulars as the Bank may direct from time to time.

Asset and liability ratios and structures of authorised member firms.

26.—(1) The Bank may impose a requirement on an authorised member firm to keep at all times a proportion of its assets in liquid form (in this section referred to as “liquid assets”) so as to enable the authorised member firm to meet its liabilities as they arise.

(2) An authorised member firm may keep liquid assets in addition to those required for the purpose of complying with subsection (1) of this section.

(3) For the purposes of complying with the requirements of the Bank under subsection (1) of this section, an authorised member firm shall have regard to the range and scale of its business and that of any relevant associated undertaking or related undertaking and the composition and character of its assets and liabilities and those of any such undertaking.

(4) The Bank may, from time to time, impose a requirement on an authorised member firm to maintain—

(a) a specified ratio, or

(b) a ratio which does not exceed a specified ratio, or

(c) a ratio which is not less than a specified ratio,

between its assets and its liabilities and the specified ratio may be expressed as a percentage of the assets or liabilities concerned.

(5) A requirement of the Bank under this section may be expressed to apply to all or any of the following, namely—

(a) all authorised member firms,

(b) authorised member firms of a specified category or specified categories,

(c) the total assets or total liabilities of the authorised member firm or authorised member firms concerned,

(d) specified assets or assets of a specified kind,

(e) specified liabilities or liabilities of a specified kind,

and shall have effect in accordance with the specified terms of the requirement.

(6) A requirement under this section which is in force may be revoked by the Bank or may be amended by a subsequent requirement under the relevant subsection.

(7) The Bank may, from time to time, specify, as respects an authorised member firm, requirements as to the composition of its assets and requirements as to the composition of its liabilities.

(8) In determining, for the purposes of this section, the assets and liabilities of an authorised member firm with which another undertaking is associated or related, there shall be attributed to the authorised member firm, in a manner acceptable to or as may be specified by the Bank, the whole or part of the assets and liabilities of whatever description of the associated undertaking or related undertaking.

(9) Any requirements imposed by the Bank under this section may include requirements imposed for the purposes of applying Council Directive 93/6/EEC of 15 March, 1993(1) or other relevant European Community Directives to the authorised member firm.

(10) In this section—

(a) “specified” means specified by the Bank under this section;

(b) “liabilities” include such contingent liabilities as may be specified by the Bank from time to time for the purposes of this section;

(c) “liquid assets” means assets specified as such for the purposes of this section by the Bank.

Maintenance of books and records by member firms.

27.—(1) (a) A member firm shall keep at an office or offices within the State such books and records (including books of accounts) as may be specified from time to time by the Bank and shall notify the Bank of the address of every office at which any such books or records are kept.

(b) A person who contravenes paragraph (a) of this subsection shall be guilty of an offence.

(2) The Bank may specify different books and records for the purposes of this section and in relation to different member firms or different classes of member firms.

(3) Books and records to be kept pursuant to this section shall be—

(a) in addition to any books or other records to be kept by or under any other enactment, and

(b) retained for at least such period as the Bank may specify.

PART IV

Regulation And Supervision of Stock Exchanges and Member Firms

General functions of Bank.

28.—(1) Subject to such guidelines in this regard, as may be issued from time to time by the Minister with the consent of the Minister for Enterprise and Employment in the interests of the proper and orderly regulation and supervision of stock exchanges and their member firms and the protection of investors, and notified to the Bank in writing and published in the Iris Oifigiúil, the Bank shall administer the system of regulation and supervision of approved stock exchanges and their member 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 approved stock exchanges and their member firms, and the orderly and proper regulation of financial markets, and

(b) the protection of investors.

(2) Where the Bank is of the opinion that it is necessary in the interests of assessing the capacity of a stock exchange or a member firm to engage in an activity for which it has sought approval or authorisation or for which it stands approved or authorised under section 10 or 21 of this Act, it may commission an independent assessment of the capacity of the proposed stock exchange or of the approved stock exchange or of the proposed member firm or of the authorised member firm.

(3) Subject to subsection (4) of this section, the Minister may, after consulting with the Bank, prescribe the fee to be paid to the Bank by an approved stock exchange or member firm supervised by it under this Act and the Minister may prescribe different fees for different classes of approved stock exchanges or different classes of member 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) notify the approved stock exchanges or authorised member firms of the class to which the proposed fee relates, of that proposed fee; and

(b) consider any representations made to him within a reasonable period, being not less than two months after the date the notification was sent by him to each approved stock exchange or authorised member firm concerned, as he shall specify in the notification.

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

(6) Without prejudice to the generality of subsection (1) of this section or to the Bank's powers under sections 15 , 27 and 56 of this Act, the Bank may carry out, at the request of another competent authority, verification that any member 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 member firm.

Directions by Bank.

29.—(1) Without prejudice to the power of the Bank to impose conditions or requirements or both under this Act and, without prejudice to the Bank's powers under subsection (2) or (4) of this section, where the Bank considers it necessary to do so in the interests of the proper and orderly regulation of approved stock exchanges or their member firms or the protection of investors, the Bank is hereby empowered to give a direction to all or any of the following, namely—

(a) any or all approved stock exchanges;

(b) any or all proposed stock exchanges;

(c) any or all former approved stock exchanges;

(d) any or all proposed member firms;

(e) any or all authorised member firms;

(f) any or all former authorised member firms;

(g) any or all member firms;

(h) any or all stock exchanges;

(i) directors and those responsible for the management of approved stock exchanges and authorised member firms;

in relation to any matter related to the operation of a stock exchange or any matter related to its member firms or any matter related to an acquiring transaction within the meaning of section 39 (2) of this Act.

(2) Without prejudice to the Bank's powers under subsection (1) of this section and without prejudice to the powers of the Bank to impose conditions or requirements or both under this Act, where the Bank is of the opinion that it is necessary to do so in the interests of the proper and orderly regulation of approved stock exchanges and their member firms or for the protection of investors, or where an approved stock exchange or a member firm—

(a) has become or is, in the opinion of the Bank, 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 Bank, 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 Bank 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 Bank is of the opinion that the stability or soundness of an approved stock exchange or member firm is materially affected by this failure, or

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

then the Bank may give a direction in writing to the approved stock exchange concerned or the member firm concerned or both 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 carrying on of the business of an approved stock exchange or of a member firm;

(ii) the making of payments to which paragraph (i) of this subsection does not relate;

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

(iv) entering into transactions 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 Bank.

(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 Bank may consider appropriate.

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

(5) Where the Bank gives a direction under this section, which said direction shall have immediate effect, the Bank may or, where the Bank is of the opinion that the said direction is not being complied with, the Bank 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 the approved stock exchange or authorised member firm or associated or related undertaking or, in the case of an authorised member firm or associated or related undertaking which is constituted as an unincorporated body of persons, no proceedings for an order of dissolution, may be commenced pr resolution for winding-up passed in relation to the approved stock exchange or authorised member firm or associated or related undertaking, and no receiver shall be appointed over the assets or over any part of the assets of the approved stock exchange or authorised member 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.

Winding-up on application to Court.

30.—(1) Notwithstanding section 215 of the Companies Act, 1963 , the Bank may, by presenting a petition, apply to the Court to have an approved stock exchange or former approved stock exchange or authorised member firm or former authorised member firm wound up on any of the following grounds, namely, that—

(a) an approved stock exchange or former approved stock exchange or authorised member firm or former authorised member firm is or, in the opinion of the Bank, may be unable to meet its obligations to its clients or creditors;

(b) the approval of the stock exchange or the authorisation of the member firm has been revoked and the former approved stock exchange or former authorised member firm has ceased to operate as a stock exchange or as a member firm respectively;

(c) the Bank considers that it is in the interest of the proper and orderly regulation of approved stock exchanges and their member firms or is necessary for the protection of investors that the approved stock exchange or former approved stock exchange or the authorised member firm or former authorised member firm be wound up;

(d) an approved stock exchange or a former approved stock exchange or an authorised member firm or a former authorised member firm has failed to comply with any direction given by the Bank under this Act.

(2) Where the petition for the winding-up of an approved stock exchange or former approved stock exchange or an authorised member firm or former authorised member firm is presented by a person other than the Bank, a copy of the petition shall be served on the Bank which shall be entitled to be heard on the petition.

(3) Where an approved stock exchange or former approved stock exchange or an authorised member firm or former authorised member firm is being wound up voluntarily and the Bank has reason tobelieve that any of the grounds set out in subsection (1) of this section applies, then, the Bank may apply to the Court to have that stock exchange or that member firm wound up by the Court.

(4) Where an approved stock exchange or an authorised member firm or former approved stock exchange or former authorised member firm is being wound up and the Bank is not a creditor, any notice or document, by whatever name called, which is required to be sent to a creditor of the approved stock exchange or authorised member firm or former approved stock exchange or former authorised member firm shall be sent also to the Bank.

(5) An officer of the Bank, or any other person, duly appointed in writing in that behalf by the Governor of the Bank or by an officer designated by the Governor of the Bank for the purpose of appointing persons under this section may attend any meeting of creditors of an approved stock exchange or authorised member firm or former approved stock exchange or former authorised member firm.

(6) (a) The Governor of the Bank, or an officer designated by the Governor of the Bank for that purpose, may appoint in writing an officer of the Bank 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 approved stock exchange, authorised member firm or former approved stock exchange or former authorised member firm, and

(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 Bank.

(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 member firm or a former authorised member firm which is constituted as an unincorporated body of persons, the Bank 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 Bank and shall apply as if the grounds specified at subsection (1) (a) to (d) of this section were incorporated therein.

Restrictions on advertising.

31.—(1) Any person who advertises or causes to be advertised the services of a stock exchange—

(a) where that stock exchange, if established in Ireland, is not an approved stock exchange, or

(b) if established in a state outside the State, is not a stock exchange permitted to carry out business in accordance with the procedures set out in that state for the approval of stock exchanges, if any,

shall be guilty of an offence.

(2) Any person who advertises or causes to be advertised, or supplies, or offers to supply, investment services, or makes any other solicitation in respect of investment services, and who holds himself out to be a member firm where that person is not such a member firm shall be guilty of an offence.

(3) Without prejudice to the generality of any section in this Act empowering the Bank to impose conditions or requirements or both, the Bank may impose conditions or requirements or both on an approved stock exchange or member firm or may set out rules or approve of rules in the rules of an approved stock exchange in respect of advertising by an approved stock exchange or member firm as the Bank considers necessary, in the interest of—

(a) the orderly and proper regulation and supervision of an approved stock exchange or approved stock exchanges or a member firm or member firms; or

(b) the protection of investors.

(4) The Bank may impose a requirement on an approved stock exchange or its member firms or any or all of them to publish specified information or to display specified information at their premises.

(5) The Minister may prescribe information to be displayed by an approved stock exchange or its member firms at their premises.

(6) (a) If, with respect to any member firm, the Bank considers it expedient to do so, in the interest of the proper and orderly regulation of approved stock exchanges and their member firms or the protection of investors, it may give such member firm a direction in relation to the matter and form of any advertisement or other means of soliciting client money or investment instruments or business or in relation to the matter and form of any advertisement relating to any service provided or business being undertaken by the member 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 member firm of advertisements of all descriptions or any specified description;

(ii) require the member firm to modify advertisements of a specified description in a specified manner;

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

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

(v) require the member 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.

(7) If, in contravention of the provisions of subsection (1) or (2) 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 (10) 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.

(8) If, in contravention of the provisions of subsection (1) or (2) 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 (9) of this section—

(a) he 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) that 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.

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

(10) The Court may allow any such agreement or obligation as is mentioned in subsection (7) or (8) 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 that it fairly stated any risks involved in those matters.

(11) Where a person elects not to perform an agreement or an obligation which by virtue of subsection (7) or (8) of this section is unenforceable against him or by virtue of either of those subsections recovers money paid or other property or investment instrumentstransferred 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.

(12) Where any property or investment instruments transferred under an agreement or obligation to which subsection (7) or (8) of this section applies has passed to a third party the references to that property or those investment instruments in this section shall be construed as references to the value of such property or investment instruments at the time of transfer under the agreement or obligation.

(13) 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, the Bank 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 Bank and the publisher shall forthwith comply with that request.

(14) The Bank may—

(a) direct a person to publish a correction of a misleading advertisement concerning services of approved stock exchanges, or member firms, or

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

(c) direct a person to publish 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 publish the fact that a determination that there has been a breach of a condition or requirement under this section has been made under section 65 of this Act, or

(e) publish an advertisement correcting any misleading aspects of advertisements, published by approved stock exchanges or member firms.

(15) In this section—

“advertisement” includes every form of recommendation of any matter to which this section relates, including in particular the display or publication of any such matter by way of newspaper, leaflet, notice, circular, pamphlet, brochure, photograph, film, video, sound broadcasting, television, electronic communication or personal canvassing and references to the issue of advertisements shall be construed accordingly;

“established in Ireland” excludes any stock exchange which provides services electronically to Irish clients and whose head office or registered office is outside the State;

“specified” means specified in a direction under this section.

(16) Any person who fails to comply with a direction or a prescription imposed under subsection (5), (6) or (14) of this section, or whofails to comply with a request of the Bank under subsection (13) of this section, shall be guilty of an offence.

Exemptions from restrictions on advertising.

32.—(1) Section 31 of this Act shall not apply to a class of advertisement specified from time to time by the Bank for the purpose of exempting from that section—

(a) advertisements appearing to the Bank 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 the Bank to deal with investments only incidentally; or

(c) advertisements issued to persons appearing to the Bank 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 the Bank when granting the exemption.

PART V

Auditors

Appointment of auditor.

33.—(1) The Bank may impose a requirement in writing on any approved stock exchange or authorised member firm—

(a) to notify the Bank at least 15 days—

(i) before notices are sent to shareholders concerning the proposed appointment or reappointment of a person to the office of auditor of an approved stock exchange or authorised member firm for the purposes of the Companies Acts, or

(ii) before the directors of an approved stock exchange or authorised member firm fill any casual vacancy in the office of auditor by virtue of section 160 (7) of the Companies Act, 1963 ,

of the name of the person to be so proposed, to be reappointed or to fill that vacancy,

(b) to supply, within such period of time as the Bank shall state, such information as it may request concerning the person named for the purpose of paragraph (a) of this subsection.

(2) Where the Bank is of the opinion that it would not be in the interest of investors or in the interest of the proper and orderly regulation of approved stock exchanges and their member firms, it may direct, as the circumstances require, that an approved stock exchange or an authorised member firm does not appoint or reappoint to the office of auditor, or that the directors do not fill a casual vacancy in the office with, a named person and the direction shall be complied with.

(3) Where the Bank gives a direction under subsection (2) of this section that an approved stock exchange or authorised member firmshall not reappoint a person to the office of auditor, that person may apply to the Court for an order to set aside the direction of the Bank.

Duties of auditor.

34.—(1) An authorised member firm which is constituted as an unincorporated body of persons shall be required to appoint an auditor to audit and make a report on its accounts on an annual basis and a person shall not be qualified for appointment as an auditor of an authorised member firm which is constituted as an unincorporated body of persons unless he meets the requirements of, and is not excluded by, the provisions of the Companies Acts.

(2) The Bank may set out requirements in respect of the accounts and audit of an authorised member firm which is constituted as an unincorporated body of persons including requirements which are analogous to those set out in the Companies Acts and may impose duties or obligations on the auditor or on the authorised member firm concerned.

(3) If at any time an auditor of an approved stock exchange or of an authorised member firm and, in the case of paragraphs (e) and (f) of this subsection, an auditor of a member firm which is not an authorised member firm—

(a) has reason to believe that there exist circumstances which are likely to affect to a material degree the ability of the approved stock exchange or the authorised member firm to fulfil its obligations to investors or clients or meet any of its financial obligations, or

(b) has reason to believe there are material defects in the accounting records or systems of control of the business and records, or

(c) has reason to believe that there are material inaccuracies in, or omissions from, any returns made by the said approved stock exchange or authorised member firm to the Bank, or

(d) proposes to qualify any report or certificate which he is to provide in relation to the financial statements or returns of the said approved stock exchange or authorised member firm under the Companies Acts, or under this Act, or

(e) has reason to believe that there are material defects in the system of any member firm for ensuring the safe custody of money of clients or investment instruments or has reason to believe that a member firm is not complying with client money requirements or rules or provisions of this Act, or

(f) has reason to believe that a member firm has breached to a material degree the rules of an approved stock exchange of which it is a member firm, or

(g) decides to resign or not to seek re-election as auditor,

he shall report the matter to the Bank in writing without delay.

(4) The auditor of an approved stock exchange or member firm, if requested to do so by the Bank, shall furnish to the Bank a reportstating whether in his opinion and to the best of his knowledge the approved stock exchange or member firm has or has not complied with—

(a) any condition or requirement set out or imposed under this Act in relation to financial resources, money of clients and investment instruments, accounting records and specified aspects of control systems or any or all of these,

(b) any condition or requirement set out in or imposed under this Act,

and the Bank may specify that such a report be furnished to it in such form as it may specify either on an annual basis or on such other occasion as the Bank may specify or both.

(5) Where the auditor of an approved stock exchange or member firm so requests, the Bank may provide to the auditor, in writing, details of any information of a financial nature concerning the said approved stock exchange or member firm as the auditor requests for the purpose of enabling him to comply with this Act.

(6) An auditor of an approved stock exchange or member firm shall send to the approved stock exchange or member firm concerned a copy of any report made by him to the Bank under subsection (3) or (4) of this section.

(7) An auditor of an approved stock exchange or authorised member firm shall communicate to the Bank any matters which come to the attention of the auditor and are such as to give the auditor reasonable cause to believe that the matter is or may be of material significance for determining either—

(a) whether a person's competence is satisfactory having regard to the matters with which they would be concerned in relation to the business of an approved stock exchange or authorised member firm and their probity is such as to render them suitable to carry on the business of an approved stock exchange or authorised member firm; or

(b) whether disciplinary action should be taken, or a direction given, by reason of a person's contravention of any provision of this Act, or any conditions or requirements, or both, or directions imposed by the Bank under this Act.

(8) (a) Where the Bank is of the opinion that the exercise of its functions under this Act or the protection of investors or clients or the interest of the proper and orderly regulation of approved stock exchanges and their member firms so requires, it may require the auditor of an approved stock exchange or member firm to supply it with such information as it may specify in relation to the audit of the business of the said approved exchange or member firm and the auditor shall comply with the requirement.

(b) The Bank may require that, in supplying information for the purposes of this subsection, the auditor shall act independently of the approved stock exchange or member firm.

(9) No duty to which an auditor of an approved stock exchange or member firm may be subject shall be regarded as contravened and no liability to the approved stock exchange or member firm orto the shareholders, creditors, investors, clients or other interested parties of any approved stock exchange or member firm shall attach to the auditor by reason of his compliance with any obligation imposed on him by or under this section.

(10) It shall be the duty of an auditor in preparing a report under this section to carry out such investigations as will enable him to form an opinion as to whether—

(a) the approved stock exchange or authorised member firm has kept proper accounting records;

(b) the approved stock exchange or authorised member firm has maintained satisfactory systems of control of its business and records and systems of inspection and report thereon; and

(c) the approved stock exchange or authorised member firm has complied with rules or requirements relating to client money and investment instruments referred to in section 52 of this Act and with the provisions of sections 52 (3) and 52 (4) of this Act;

and where an auditor is of the opinion that the approved stock exchange or authorised member firm has failed to keep proper accounting records or to maintain a satisfactory system of control of its business or records or to comply with rules or requirements relating to client money and investment instruments referred to in paragraph (c) of this subsection and with the provisions of sections 52 (3) and 52 (4) of this Act he shall so state in his report.

(11) An auditor of an approved stock exchange or authorised member firm shall have a right of access at all reasonable times to the books, accounts, records and vouchers of the approved stock exchange or authorised member firm and to all other documents relating to its affairs (including documents and records relating to clients' money and investment instruments), and shall be entitled to require from the officers, directors, managers and employees of the said approved stock exchange or authorised member firm such information and explanations as are within their knowledge or can be procured by them as he thinks necessary for the performance of the duties of auditor.

(12) Subject to subsection (15) of this section, where an approved stock exchange or authorised member firm has a related undertaking or associated undertaking, then—

(a) if the associated undertaking or related undertaking is a body incorporated in the State, it shall be the duty of the associated undertaking or related undertaking and its auditors to give to the auditors of the approved stock exchange or authorised member firm, as the case may be, such information and explanation and such access to documents as those auditors may reasonably require for the purpose of their duties as auditors of the approved stock exchange or authorised member firm concerned; and

(b) in any other case, it shall be the duty of the approved stock exchange or authorised member firm, if required by its auditors to do so, to take all such steps as are reasonably open to it to obtain from the related undertaking orassociated undertaking such information and explanation and such access as are mentioned in paragraph (a) of this subsection.

(13) The Bank may set out requirements in respect of the audit of approved stock exchanges or authorised member firms and such requirements may relate to the communication of specified matters to the Bank which may include matters relating to an associated undertaking or related undertaking.

(14) Any report requested by the Bank under this section shall be prepared at the expense of the approved stock exchange or member firm concerned and shall be carried out and made within such time as may be specified by the Bank or within such further time as the Bank may allow.

(15) An associated undertaking or a related undertaking may apply to the Court for an order prohibiting the auditor of an approved stock exchange or authorised member firm from requesting particular information or classes of information under this section from that associated undertaking or related undertaking on the basis that it is unreasonable and unnecessary for the auditor to request that information.

False statements to auditors.

35.—(1) An officer or employee of an approved stock exchange or authorised member firm or of an associated undertaking or related undertaking who knowingly or recklessly makes a statement to which this section applies that is misleading, false or deceptive in a material particular shall be guilty of an offence.

(2) This section applies to any statement made to the auditors of an approved stock exchange or authorised member firm (whether orally or in writing) which conveys, or purports to convey, any information or explanation which they require under this Act, or are entitled so to require, as auditors of the approved stock exchange or authorised member firm.

(3) An officer or employee of an approved stock exchange or an authorised member firm or an associated undertaking or related undertaking who fails to provide to the auditors of the approved stock exchange or authorised member firm, within such period of time as the auditor, after consultation with the Bank, may specify, being not less than two days (not including a Saturday, a Sunday or a public holiday) from the making of the relevant inquiry, any information or explanations that the auditors require as auditors of the approved stock exchange or authorised member firm and that is within the knowledge of or can be procured by the officer or employee shall be guilty of an offence.

(4) In a prosecution for an offence under this section, it shall be a defence for the defendant to show that it was not reasonably possible for him to comply with the requirements under subsection (3) of this section to which the offence relates within the time specified in that subsection but that he complied therewith as soon as was reasonably possible after the expiration of such time.

(5) In this section “officer”, in relation to an associated undertaking or related undertaking of an approved stock exchange or authorised member firm, includes an auditor.

PART VI

Miscellaneous

Power to require a second audit.

36.—(1) If, on the basis of the information obtained through the first audit, the Bank has a real and substantial concern about the audited accounts of an approved stock exchange or an authorised member firm, it may direct the approved stock exchange or authorised member firm to submit for examination by a person appointed by the Governor of the Bank or by such other person designated by the Governor for the purpose of appointing persons (including an auditor) any or all of the following, namely—

(a) any accounts on which the auditor of that approved stock exchange or authorised member firm has reported or any information which has been verified by that auditor,

(b) any information as is specified in the direction,

and the person making the examination shall report his conclusions to the Bank.

(2) The person carrying out an examination under this section shall have all the powers that are available to an auditor under this Act and under the Companies Acts and it shall be the duty of the auditor of an approved stock exchange or authorised member firm to afford him all such assistance as he may require.

(3) Where a report made under this section relates to accounts which under any enactment are required to be sent to, or made available for inspection by, any person or to be delivered for registration, the report, or any part of it (or a note that such a report has been made) may be similarly sent, made available or delivered by the Bank.

(4) An officer or employee of an approved stock exchange or authorised member firm or of an associated or related undertaking who knowingly or recklessly makes a statement to a person appointed under this section that is false or misleading or deceptive in a material particular shall be guilty of an offence.

(5) If any officer, employee, shareholder or agent of the approved stock exchange or authorised member firm or associated undertaking or related undertaking refuses to produce to the person appointed under this section any book or document which it is his duty under this section to produce, refuses to attend before the person appointed under this section when required to do so, or refuses to answer any question put to him by the person appointed under this section with respect to the affairs of the approved stock exchange or authorised member firm or associated undertaking or related undertaking, the person appointed under this section may certify the refusal under his hand to the Court and the Court may thereupon inquire into the case and, after hearing any witnesses who may be produced against or on behalf of the officer, employee, shareholder or agent of the approved stock exchange or authorised member firm or associated undertaking or related undertaking and any statement which may be offered in defence, make any order or direction as it thinks fit including a direction to the person concerned to attend or re-attend before the person appointed under this section or produce particular books or documents or answer a particular question put to him by the person appointed under this section, or a direction that the person concernedneed not produce a particular book or document or answer a particular question put to him by the person appointed under this section.

(6) The expenses of and incidental to an examination under this section may be paid in the first instance by the Bank.

Employment of disqualified person.

37.—(1) (a) If the Bank becomes aware that the probity of any officer or employee of an approved stock exchange or authorised member firm is such so as to render him unsuitable to act as an officer or employee of an approved stock exchange or authorised member firm, the Bank may, on notice to the person concerned and on notice to the approved stock exchange or authorised member firm concerned, apply to the Court to issue a direction to direct the approved stock exchange or authorised member firm concerned to have the officer concerned removed or to dismiss the employee concerned from their employment.

(b) If the Bank becomes aware that any officer or employee of an approved stock exchange or authorised member firm is not competent in respect of matters of the kind with which he would be concerned as an officer or employee of an approved stock exchange or an authorised member firm, the Bank may, on notice to the person concerned and on notice to the approved stock exchange or authorised member firm, apply to the Court to issue a direction to direct the approved stock exchange or authorised member firm concerned to have the officer concerned removed, or suspended for a specified period of time, or to dismiss the employee concerned from their employment or to remove that employee from a particular area of their employment.

(2). The Court may make such interim or interlocutory orders as it considers necessary under this section.

(3) Subject to subsection (5) of this section, a person who is the subject of a direction under subsection (1) of this section may not, without the written consent of the Bank, be employed in any capacity in connection with an approved stock exchange or authorised member firm or any other entity which the Bank supervises or regulates as part of its statutory functions.

(4). A direction under this section (to be known and in this section referred to as “a disqualification direction”) shall specify the date on which it is to take effect and a copy of it shall be served on the person to whom it relates.

(5) The Bank may consent to the employment of a person who is the subject of a disqualification direction and such consent may—

(a) relate to employment with any entity which the Bank supervises or regulates as part of its statutory functions generally or to employment of a particular kind,

(b) be given subject to conditions or requirements or both, and

(c) be varied by the Bank from time to time.

(6) Any person who accepts or continues in any employment in contravention of a disqualification direction shall be guilty of an offence.

(7) An approved stock exchange or an authorised member firm or any entity supervised or regulated by the Bank under this Act or any other enactment shall take reasonable care not to employ or continue to employ a person in contravention of a disqualification direction.

(8) A person who is the subject of a disqualification direction may apply to the Court to revoke that direction at any time.

(9) The Bank may apply to the Court to revoke a disqualification direction at any time.

(10) Where the Bank refuses consent under subsection (5) of this section, the person who is the subject of a disqualification direction may appeal to the Court against that decision and the Court may make such order as it considers necessary including making an interim or interlocutory order.

Codes of conduct.

38.—(1) Subject to subsection (2) of this section, the Bank shall draw up and issue a code of conduct for approved stock exchanges or member firms or both which shall include provisions which seek to ensure that a member firm—

(a) acts honestly and fairly in conducting its business activities in the best interests of its clients and the integrity of the market,

(b) acts with due skill, care and diligence, in the best interests of its clients and the integrity of the market,

(c) has and employs effectively the resources and procedures that are necessary for the proper performance of its business activities,

(d) seeks from its clients information regarding their financial situations, investment experience and objectives as regards the services requested,

(e) makes adequate disclosure of relevant material information in its dealings with its clients,

(f) makes a reasonable effort to avoid conflicts of interests and, when they cannot be avoided, ensures that its clients are fairly treated, and

(g) complies with all regulatory requirements applicable to the conduct of its business activities so as to promote the best interests of its clients and the integrity of the market,

and the Bank may impose conditions or requirements on a member firm in respect of compliance with the provisions of such a code of conduct.

(2) Subsection (1) of this section shall not apply where an approved stock exchange has drawn up and maintains in force rules of conduct in respect of matters referred to in paragraphs (a) to (g) of that subsection.

(3) The code of conduct or rules of conduct or both, referred to in subsections (1) and (2) of this section, may be applied in such a way or to such an extent as to take account of the status or experience of the person for whom the services are provided.

(4) The code of conduct or rules of conduct or both, referred to in subsections (1) and (2) of this section, may include criteria for distinguishing between different categories of investor for the purposes of this section.

Acquiring transactions.

39.—(1) In this Part, “acquiring transaction” shall be construed in accordance with subsection (2) of this section and “disposal” shall be construed in accordance with subsection (3) of this section.

(2) In this Part “acquiring transaction” means any direct or indirect acquisition by a person or more than one person acting in concert of shares or other interest in an approved stock exchange or authorised member firm, provided that, after the proposed acquisition—

(a) the proportion of voting rights or capital held by the person or persons making the acquiring transaction would exceed a qualifying holding, or

(b) the proportion of voting rights or capital held by the person or persons making the acquiring transaction would reach or exceed 20 per cent., 33 per cent. or 50 per cent., or

(c) the approved stock exchange or authorised member firm would become a subsidiary of the acquirer.

(3) In this Part “disposal” means any direct or indirect disposal by a person or more than one person acting in concert of a qualifying holding or a disposal which would reduce such a qualifying holding so that the proportion of the voting rights or of the capital held by the person or persons would fall below 20 per cent., 33 per cent. or 50 per cent. or so that the approved stock exchange or authorised member firm would cease to be its subsidiary.

Notification of certain transactions.

40.—(1) Any person who proposes to make an acquiring transaction shall notify the Bank in writing of the proposal as soon as may be and such notification shall include such information concerning the proposed acquiring transaction as may be specified by the Bank from time to time.

(2) Any person who proposes to make a disposal shall notify the Bank in writing of the proposal as soon as may be and such notification shall include such information concerning the proposed disposal as may be specified by the Bank from time to time.

(3) On becoming aware of any proposals of the type referred to in subsection (1) or (2) of this section, the authorised member firm or approved stock exchange concerned shall inform the Bank of such proposed acquiring transactions or disposals that cause holdings to exceed or fall below a qualifying holding or 20 per cent., 33 per cent. or 50 per cent. of the capital held or voting rights, or that cause theapproved stock exchange or authorised member firm to become, or cease to be, a subsidiary.

(4) Where, having received a notification under this section, the Bank is of the opinion that in order to consider, for the purposes of this section, a proposed acquiring transaction, it requires further information, it may, within one month of the date of receipt by it of a notification, request such further information in writing from any one or more of the undertakings concerned.

(5) The Bank may approve of, or approve of subject to conditions or requirements or both, or may refuse to approve of an acquiring transaction.

Approval of acquiring transactions.

41.—An acquiring transaction shall not proceed until the Bank has informed the authorised member firm or approved stock exchange and the party making the acquiring transaction in writing that it approves of the acquiring transaction or until three months have elapsed during which the Bank has not refused to approve of the acquiring transaction, whichever first occurs, such period beginning on the date on which the Bank first receives a notification under section 40 of this Act, or, where the Bank requests further information from the person or persons concerned under section 40 (4) of this Act, the date of receipt by the Bank of such information.

Period for implementing acquiring transactions.

42.—Where the Bank approves of an acquiring transaction, it may specify in writing a period for the implementation of that transaction.

Imposition by Bank of conditions or requirements in respect of proposed acquiring transactions.

43.—(1) An approval given by the Bank to a proposed acquiring transaction shall be subject to such conditions or requirements or both as the Bank may impose (being conditions or requirements which in the opinion of the Bank are necessary for the orderly and proper regulation of approved stock exchanges and authorised member firms).

(2) The Bank may, at any time, amend or revoke such conditions or requirements or both referred to in subsection (1) of this section.

Limitation on validity of certain acquiring transactions.

44.—Subject to section 42 of this Act, an acquiring transaction shall only be valid if it is entered into—

(a) within 12 months of the Bank giving its approval in writing to the transaction, or

(b) within 12 months of the end of the three month period referred to in section 41 of this Act,

and, accordingly, any purported acquiring transaction which does not comply with either paragraph (a) or (b) of this section shall be invalid and—

(i) title to any shares or other interest shall not pass, and

(ii) any consequential purported exercise of powers relating to such shares or other interest shall be invalid.

Refusal by Bank to approve acquiring transactions.

45.—(1) The Bank shall refuse to approve an acquiring transaction where it is not satisfied as to the suitability of the person proposing the acquiring transaction or where the Bank considers thatthe acquiring transaction is likely to be prejudicial to the sound and prudent management of the approved stock exchange or authorised member firm or the proper regulation of the approved stock exchange or authorised member firm or both.

(2) Where the Bank refuses to approve an acquiring transaction or where the Bank becomes aware of a proposed acquiring transaction of which it has not been notified under section 40 of this Act, the Bank may issue a direction under section 29 of this Act to the directors and those responsible for the management of the approved stock exchange or authorised member firm concerned.

Appeals to Court.

46.—(1) Where the Bank informs a person making an acquiring transaction in accordance with section 40 of this Act that it—

(a) refuses to give its approval to that transaction, or

(b) gives its approval subject to conditions or requirements,

an appeal may be made by that person to the Court against the refusal or the conditions or requirements attached to the approval, as the case may be, within one month of that refusal or approval being so communicated.

(2) Where the Court allows the appeal, it shall direct the Bank to make a decision in accordance with the determination of the Court and the Bank shall make its decision within the period of three months beginning on the date of the determination of the Court.

(3) Where the Court is satisfied, because of the nature or the circumstances of the case or otherwise in the interests of justice, that it is desirable, the whole or any part of proceedings under this section may be heard otherwise than in public.

Inquiries by Bank into acquiring transactions.

47.—(1) The Bank may carry out such inquiries and obtain such information as it considers necessary to enable it to consider a proposed acquiring transaction.

(2) Any person who wilfully or knowingly obstructs or prevents inquiries by the Bank under this section or knowingly or recklessly provides false or misleading information shall be guilty of an offence.

Obligation to inform Bank of shareholdings, etc.

48.—(1) At least once in each year, approved stock exchanges and authorised member firms shall inform the Bank of the names of direct shareholders and members possessing qualifying holdings and the sizes of such holdings.

(2) At least once in each year, approved stock exchanges and authorised member firms, having made best efforts to ascertain the identity of all indirect shareholders and members possessing qualifying holdings, shall inform the Bank of the names of such persons.

Other enactments relating to acquiring transactions.

49.—(1) Nothing in any other enactment shall be construed as relieving an approved stock exchange or an authorised member firm or other person of any of its obligations to comply with subsections (1), (2) and (3) of section 40 of this Act.

(2) An order under section 201 or 203 of the Companies Act, 1963 , in respect of a proposed amalgamation (being an acquiring transaction) shall not be made until the Bank has given its approval to the acquiring transaction or the period referred to in section 41 has elapsed without the Bank having given or refused to give approval.

Amendment of section 16 of Central Bank Act, 1989.

50.— Section 16 of the Central Bank Act, 1989 , is hereby amended by—

(a) the substitution in subsection (1) of “unless such disclosure is to enable the Bank to carry out its statutory functions” for “unless such disclosure is to enable the Bank to carry out its functions under the Central Bank Acts, 1942 to 1989 or under any enactment amending those Acts” and the subsection as so amended is set out in the Table to this section;

(b) the substitution for subsection (2) (e) of the following paragraph:

“(e) made to an authority in a jurisdiction other than that of the State duly authorised to exercise functions similar to any one or more of the statutory functions of the Bank and which has obligations in respect of non-disclosure of information similar to the obligations imposed on the Bank under this section.”;

(c) the insertion in subsection (2) of the following paragraphs:

“(h) made to any approved stock exchange (within the meaning of the Stock Exchange Act, 1995) in respect of member firms of that stock exchange for the purpose of monitoring compliance by member firms with stock exchange rules or with conditions or requirements imposed by the Bank or both, or where the Bank considers it necessary to do so either for the proper and orderly regulation of stock exchanges and their member firms, or for the protection of investors, or both,

(i) made to a financial futures and options exchange within the meaning of section 97 of this Act whose rules have been approved by the Bank under Chapter VIII of this Act for the purpose of monitoring compliance by the members of that exchange with the rules or with conditions or requirements imposed by the Bank, or both, or where the Bank considers it necessary to do so for the proper and orderly regulation of such futures and options exchanges and their members,

(j) made to a Committee appointed under section 65 of the Stock Exchange Act, 1995,

(k) made to an inspector appointed under section 57 of the Stock Exchange Act, 1995,

(l) made to any body which is a competent authority for the purpose of Council Directive 93/22/EEC of 10 May, 1993(1) or Council Directive 93/6/EEC of 15 March, 1993⁽¹⁾,”;

(d) the insertion of the following subsection:

“(6) In this section, ‘statutory functions’ has the meaning assigned to it by section 3 of the Stock Exchange Act, 1995.”.

TABLE

(1) A person, who at the commencement of this section is, or at any time thereafter is appointed. Governor or a Director, officer or servant of the Bank or who is employed by the Bank in any other capacity, shall not disclose, during his term of office or employment or at any time thereafter, any information concerning—

(a) the business of any person or body (whether corporate or unincorporate) which came to his knowledge by virtue of his office or employment, or

(b) the Bank's activities in respect of the protection of the integrity of the currency or the control of credit,

unless such disclosure is to enable the Bank to carry out its statutory functions.

Investor compensation.

51.—A member firm shall not engage in business with clients and investors unless, and in accordance with any procedures to be set out in the rules of an approved stock exchange, it informs clients and investors of—

(a) whether or not there is a compensation fund or protection of comparable form, and

(b) the nature and level of protection, if any, available from any such fund.

Client money and investment instruments.

52.—(1) The Bank may, from time to time, impose requirements or may approve of rules in the rules of an approved stock exchange, or both, with respect to clients' money and clients' investment instruments, and such requirements or rules (in this Act referred to as “client money requirements”) may include conditions under which member firms may hold money or investment instruments, or both, for clients.

(2) Without prejudice to the generality of subsection (1) of this section, client money requirements may include requirements or rules in relation to—

(a) the category or categories of member firm to which such requirements or rules apply;

(b) the type or types of accounts to be opened and kept by a member firm arising from its business as a member firm;

(c) the rights, duties and responsibilities of a member firm in relation to money and investment instruments received, held, controlled or paid by it arising from its business as a member firm, including the lodgement to and withdrawal from a client account of client money and client investment instruments;

(d) the acknowledgements or statements to be issued by a member firm in respect of client money and client investment instruments received, held, controlled or paid by it arising from its business as a member firm;

(e) the circumstances in which money other than client money ay be paid into accounts containing client money and the circumstances in which, and the persons to whom, money held in such accounts may be paid out;

(f) the safekeeping of client investment instruments and documents of title relating to such investment instruments;

(g) the use of nominee companies by member firms;

(h) client entitlements, including the treatment or retention of interest, income or profit arising from any client money or investment instrument or documents of title in such cases as may be specified;

(i) the extent to which such client money requirements apply to associated and related undertakings.

(3) Without prejudice to the generality of subsection (1) of this section and notwithstanding the provisions of subsection (2) of this section, an authorised member firm shall—

(a) designate all accounts containing money entrusted to it or received by it for or on account of a client a “ Section 52 account” in all financial records maintained by it,

(b) hold client money in an account or accounts with an institution or type of institution as may be specified by the Bank from time to time,

(c) keep at an office or offices within the State such books and records (including books of accounts) in respect of client money and client investment instruments as may be specified from time to time by the Bank and notify the Bank of the address of every office at which any such books or records are kept,

(d) ensure that any books or records required under this section are examined, at such intervals as may be specified by the Bank, by an auditor who shall report to the Bank and state whether in his opinion the provisions of the client money requirements imposed or rules approved under subsection (1) of this section and the provisions of this subsection have been complied with and on such other matters as may be specified in the client money requirements imposed under subsection (1) of this section,

and an authorised member firm which does not comply with the provisions of paragraph (a) or (c) of this subsection or which does not ensure that books and records kept in respect of client money and client investment instruments are examined by an auditor at such intervals as shall be specified by the Bank or which knowingly holds client money in an account or accounts with an institution other than an institution or type of institution as may be specified by the Bank from time to time, shall be guilty of an offence.

(4) (a) The Bank may specify different books and records for the purposes of this section and in relation to different member firms or different classes of member firms.

(b) Books and records to be kept pursuant to this section shall be—

(i) in addition to any books or other records to be kept by or under any other section of this Act or any other enactment, and

(ii) retained for at least such period as the Bank may specify.

(5) No liquidator, receiver, administrator, examiner or creditor of a member firm shall have or obtain any recourse or right against a client's money or a client's investment instruments or a client's documents of title relating to such investment instruments received, held, controlled or paid on behalf of the client until all proper claims of the client or of the client's heirs, successors or assigns against the client's money or the client's investment instruments or documents of title have been satisfied in full.

(6) A person with which an account is kept in pursuance of client money requirements or rules under this section shall not incur any liability as constructive trustee where money is wrongfully paid from the account unless the person permits the payment with knowledge that the payment is wrongful or having deliberately failed to make inquiries in circumstances in which a reasonable and honest person would have done so.

(7) It shall be an offence for a director, officer or employee of a member firm or any of them to misappropriate fraudulently any money or investment instruments held, controlled or paid on behalf of a client by that member firm.

Exemption from liability for damages.

53.—(1) The Bank or any officer or any employee of the Bank or any member of its Board or any member of a committee appointed under section 65 of this Act shall not be liable in damages for anything done or omitted in the discharge or purported discharge of any of its functions under this Act unless it is shown that the act or omission was in bad faith.

(2) Neither an approved stock exchange nor any of its officers, nor any employee nor any member of its Board shall be liable in damages for anything done or omitted in the discharge or purported discharge of any functions carried out in the exercise of a public duty under this Act unless it is shown that the act or omission was in bad faith.

(3) Without prejudice to the generality of subsection (1) of this section, the approval or revocation of approval or supervision or regulation of a stock exchange or the approval, amendment, revocation or imposition of rules or the consent or refusal to consent to amendments of rules shall not constitute a warranty as to the solvency or performance of an approved stock exchange or a member firm and neither the State nor the Bank shall be liable in respect of any loss or losses arising out of the insolvency or default or performance of any approved stock exchange or member firm.

(4) Without prejudice to the generality of subsection (1) of this section, the authorisation, supervision, regulation or revocation of authorisation of a member firm under this Act shall not constitute awarranty as to the solvency or performance of a member firm and neither the State nor the Bank shall be liable in respect of any losses incurred through the insolvency, default or performance of the member firm.

Personal liability of officers.

54.—(1) If—

(a) an approved stock exchange or authorised member firm is being wound up and is unable to pay all of its debts and has contravened section 15 , 27 or 52 (3) of this Act, and

(b) the Court considers that such contravention has contributed to the inability of the approved stock exchange or authorised member firm to pay all of its debts or has resulted in substantial uncertainty as to the amount, location, ownership or otherwise of the assets and liabilities of the approved stock exchange or authorised member firm or of the money or investment instruments of clients of the said approved stock exchange or authorised member firm or has substantially impeded its orderly winding-up,

the Court, on the application of the liquidator or receiver or the Bank or any creditor or client or investor, may, if it thinks it proper to do so, declare that any one or more of the officers or former officers or both of the said approved stock exchange or authorised member firm who is or are in default shall be personally liable, without any limitation of liability, for all, or such part as may be specified by the Court, of the debts and other liabilities of the said approved stock exchange or authorised member firm.

(2) (a) Where the Court makes a declaration under subsection (1) of this section, it may give such directions as it thinks proper for the purpose of giving effect to the declaration and in particular may make provision for making the liability of any such person under the declaration a charge on any debt or obligation due from the approved stock exchange or authorised member firm to him, or on any mortgage or charge or any interest in any mortgage or charge on any assets of the approved stock exchange or authorised member firm held by or vested in him or any company or other person on his behalf, or any person claiming as assignee from or through the person liable under the declaration or any company or person acting on his behalf, and may from time to time make such further order as may be necessary for the purpose of enforcing any charge imposed under this subsection.

(b) In paragraph (a) of this subsection “assignee” includes any person to whom or in whose favour, by the directions of the person liable, the debt, obligation or mortgage was created, issued or transferred or the interest created but does not include an assignee for valuable consideration (not including consideration by way of marriage) given in good faith and without notice of any of the matters on the grounds of which the declaration is made.

(3) The Court shall not make a declaration under subsection (1) of this section in respect of a person if it considers that—

(a) he took all reasonable steps to secure compliance by the approved stock exchange or authorised member firm with section 15 , 27 or 52 (3) of this Act, or

(b) he had reasonable grounds for believing and did believe that a competent and reliable person, acting under the supervision or control of a director who has been formally allocated such responsibility, was charged with the duty of ensuring that section 15 , 27 or 52 (3) of this Act was complied with and was in a position to discharge that duty.

(4) This section shall have effect notwithstanding that the person concerned may be liable to be prosecuted for a criminal offence in respect of the matters on the ground of which the declaration is to be made or that such person has been convicted of such an offence.

(5) In this section “officer”, in relation to an approved stock exchange or authorised member firm, includes a person who has been convicted of an offence under section 194 of the Companies Act, 1990 or section 35 or 70 (7) of this Act, in relation to a statement concerning the keeping of proper accounting records by the approved stock exchange or authorised member firm concerned.

(6) A person who, being a director of an approved stock exchange or authorised member firm, fails to take all reasonable steps to secure compliance by the approved stock exchange or authorised member firm with the requirements of section 15 , 27 or 52 (3) of this Act or has by his own wilful act been the cause of any default by the approved stock exchange or authorised member firm thereunder, shall be guilty of an offence:

Provided, however, that—

(a) in any proceedings against a person in respect of an offence under this section consisting of a failure to take reasonable steps to secure compliance by the approved stock exchange or authorised member firm with the requirements of this section, it shall be a defence to prove that he had reasonable grounds for believing and did believe that a competent and reliable person was charged with the duty of ensuring that those requirements were complied with and was in a position to discharge that duty, and

(b) a person shall not be sentenced to imprisonment for such an offence unless, in the opinion of the Court, the offence was committed wilfully.

PART VII

Enforcement, Offences and Penalties

Authorised officers.

55.—(1) The Governor of the Bank or any other person appointed by him for that purpose may authorise in writing such and so many persons to be authorised officers for the purposes of this Act and may revoke such authorisations.

(2) Every person who is appointed to be an authorised officer pursuant to this section shall be furnished with a certificate of appointment and shall, if so required, when exercising any power conferred on him by this Act, produce such certificate or a copy of it duly authenticated by the Governor of the Bank or such other person appointed by the Governor of the Bank for that purpose and a form of personal identification.

Powers of authorised officers.

56.—(1) The powers conferred by this section may be exercised in respect of a proposed stock exchange, an approved stock exchange, a former approved stock exchange, a proposed member firm, an authorised member firm, a member firm or a former authorised member firm, or associated undertaking or related undertaking and those persons shall be referred to in this section as “persons to whom this section applies”.

(2) An authorised officer may, for the purpose of obtaining any information which the Bank may require for enabling it to exercise any of its functions under this Act, do any one or more of the following things:

(a) enter at all reasonable times any premises in which he reasonably believes there are any books, documents or records relating to the activities of persons to whom this section applies,

(b) inspect or take copies of or extracts from and make such inquiries and do other acts as he may consider necessary in relation to—

(i) the books and records kept by persons to whom this section applies, including books and records kept pursuant to sections 15 and 27 of this Act,

(ii) any books of account relating to the said persons kept under the Companies Acts, and

(iii) any other documents relating to the business of the said persons,

(c) require any person employed in the premises to produce to him any books, documents or records which are in such person's control, possession or procurement and which such authorised officer has reasonable grounds for believing to be records, books or documents relating to the activities of any persons to whom this section applies and to give him such information as he may reasonably require in regard to any entries in any such records, books or documents,

(d) require any person employed in the premises to prepare a report on specified aspects of the business of the persons to whom this section applies or to explain entries in any documents or other materials furnished.

(3) A person who has in his power, possession or procurement any books, records or other documents aforesaid shall—

(a) produce them at the request of an authorised officer and permit him to inspect and take copies of, or extracts from, them;

(b) at the request of an authorised officer, give any information which may be reasonably required with regard to them, and

(c) give such other assistance and information to an authorised officer as is reasonable in the circumstances.

(4) Where any person from whom production of a book, record or other document is required claims a lien thereon, the production of it shall be without prejudice to the lien.

(5) Nothing in this section shall compel the production by a barrister or solicitor of a book, record or other document containing a privileged communication made by him or to him in that capacity or the furnishing of information contained in a privileged communication so made.

(6) An approved stock exchange or member firm and any person carrying on the business of an associated or related undertaking to which this section relates shall each furnish the Bank—

(a) at such times as the Bank may specify, from time to time, such information and returns concerning the business to which the approval, authorisation or business of the associated undertaking or related undertaking relates, as the Bank may specify from time to time, being information and returns which the Bank considers it necessary to have for the due performance of its functions under this Act; and

(b) within such period as the Bank may specify, any information and returns (not being information or returns specified under paragraph (a) of this subsection) concerning the business to which the approval, authorisation or business of the associated undertaking or related undertaking relates that the Bank may request in writing, being information and returns which the Bank considers it necessary to have for the due performance of its functions under this Act.

(7) This section shall apply to the business of an associated undertaking or related undertaking to the extent only that the information and returns sought by the Bank are, in the opinion of the Bank, materially relevant to the proper appraisal of the business of the approved stock exchange or authorised member firm to which the associated or related undertaking relates.

(8) A requirement under this section may be imposed on a person outside the State to whom this section applies.

(9) The duty to produce or provide any information, document, material or explanation extends to a liquidator or receiver or any person who is or has been an officer or employee or agent of the persons to whom this section applies, or who appears to the Bank or the authorised officer to have the information, document, material or explanation in his possession or under his control.

(10) In this section—

(a) “specified” means specified under this section;

(b) “agent”, in relation to a person to whom this section applies or any associated or related undertaking, includes past as well as present agents, as the case may be, and includes its bankers, accountants, solicitors, auditors and its financial and other advisors, whether or not those persons are officers or persons to whom this section applies.

(11) If any officer, employee, shareholder or agent of a person to whom this section applies refuses to produce to an authorised officerwhen requested to do so any book or document which it is his duty under this section to produce, or refuses to co-operate with an authorised officer when required to do so, or refuses to answer any question put to him by an authorised officer with respect to the affairs of the person to whom this section applies, the authorised officer may certify the refusal under his hand to the Court and the Court may thereupon inquire into the case and, after hearing any witnesses who may be produced against or on behalf of the officer, employee, shareholder or agent of the person to whom this section applies and any statement which may be offered in defence, make any order or direction as it thinks fit including a direction to the person concerned to attend or re-attend before the authorised officer or produce particular books or documents or answer a particular question put to him by the authorised officer, or a direction that the person concerned need not produce a particular book or document or answer a particular question put to him by the authorised officer.

Appointment of inspector by Court.

57.—(1) Without prejudice to the powers of the Bank under this Act, where the Bank is of the opinion that it is in the interest of the proper and orderly regulation of approved stock exchanges or their member firms or the protection of investors that an investigation should be held into the affairs of an approved stock exchange or authorised member firm, the Bank may apply to the Court and the Court, as it thinks proper, may appoint one or more inspectors to investigate the affairs of that approved stock exchange or that authorised member firm and, where necessary, any subsidiary or other associated or related undertaking and to report thereon in such manner as the Court directs.

(2) Before applying to the Court to appoint an inspector under this section, the Bank may, if it is of the opinion that it would not be prejudicial to the interests of shareholders or creditors or investors, notify the approved stock exchange or authorised member firm concerned in writing of the action which it proposes to take and of the grounds on which it proposes to take it and, in such a case, the approved stock exchange or authorised member firm shall, within such period as the Bank may set out in the notification, be entitled to give to the Bank a statement in writing explaining its activities.

Power of inspector to extend investigation.

58.—Where an inspector appointed under section 57 of this Act to investigate the affairs of an approved stock exchange or authorised member firm or any subsidiary or other associated or related undertaking thinks it necessary for the purposes of his investigation to investigate the affairs of any other approved stock exchange or authorised member firm or any body corporate or any undertaking which is or was at any relevant time a subsidiary or an associated undertaking or related undertaking of the first-mentioned approved stock exchange or authorised member firm, he shall, with the approval of the Court, have power to do so, and shall report on the affairs of the other approved stock exchange or authorised member firm or body corporate or undertaking or associated undertaking or related undertaking so far as he thinks the results of his investigation are relevant to the investigation of the affairs of the first-mentioned approved stock exchange or authorised member firm.

Direction to inspector by Court.

59.—Where the Court appoints an inspector under section 57 of this Act, it may, from time to time, give such directions as it thinks fit, whether to the inspector or otherwise, with a view to ensuring that the investigation is carried out as efficiently and as effectively as is practicable in the circumstances.

Powers of inspection.

60.— (1) It shall be the duty—

(a) of all officers, employees, shareholders and agents of an approved stock exchange or authorised member firm or other body the affairs of which are being investigated under section 57 or 64 of this Act including officers, shareholders and agents outside the State, and

(b) of any other person, including those being investigated under section 58 of this Act, and including any person outside the State, who the inspector considers is, or may be, in possession of any information concerning the affairs of an approved stock exchange or authorised member firm, to produce to an inspector appointed under section 57 or 64 of this Act all books, accounts, deeds, records or other documents of, or relating to, the business of the approved stock exchange or authorised member firm or person being investigated under section 58 of this Act, which are in their control, possession or procurement, to attend before the inspector, when required to do so, and to give to him all assistance in connection with the investigation which they are reasonably able to give and it shall be the duty of such persons to comply with the requirement.

(2) The inspector may examine on oath or by written interrogatories on oath the officers, employees, shareholders and agents of the approved stock exchange or authorised member firm being investigated or other person being investigated under section 57 or 64 of this Act and any such person as is mentioned in subsection (1) of this section in relation to its affairs and may—

(a) administer an oath accordingly, and

(b) reduce the answers of such person to writing and require that person to sign them.

(3) If an inspector has reasonable grounds for believing that a director or past director or employee or past employee or agent or past agent or shareholder or past shareholder of the approved stock exchange or of the authorised member firm or of the other person mentioned in subsection (1) of this section whose affairs the inspector is investigating maintains or has maintained, either at that time or at any time in the past, an account of any description in a credit institution or an account with any other financial institution, including holdings of investment instruments, whether alone or jointly with another person and whether in the State or elsewhere, into or out of which there has been paid—

(a) any money which has resulted from or been used in the financing of any transaction, arrangement or agreement relating to the business of the approved stock exchange or authorised member firm or relating to client money or investment instruments, or

(b) any money which has been in any way connected with any act or omission, or series of acts or omissions, which on the part of that director or employee or agent constituted misconduct (whether fraudulent or not) towards the approved stock exchange or its shareholders or the authorised member firm or its shareholders or any client or creditor of the approved stock exchange or authorised member firm,the inspector may require the director or past director or employee or past employee or agent or past agent or shareholder or past shareholder or other person mentioned in subsection (1) of this section to produce to him all documents in the director's or employee's or agent's possession, or under his control, relating to that account and in this subsection “credit institution account” includes an account with any person exempt by virtue of section 7 (4) of the Central Bank Act, 1971 , from the requirement of holding a licence granted under section 9 of that Act.

(4) If any officer, shareholder or agent of the approved stock exchange or authorised member firm or any such person as is mentioned in subsection (1) of this section refuses to produce to the inspector any book or document which it is his duty under this section to produce, refuses to attend before the inspector when required to do so, or refuses to answer any question put to him by the inspector with respect to the affairs of the approved stock exchange or authorised member firm or other person mentioned in subsection (1) of this section, as the case may be, the inspector may certify the refusal under his hand to the Court and the Court may thereupon inquire into the case and, after hearing any witnesses who may be produced against or on behalf of the officer, shareholder or agent of the approved stock exchange or authorised member firm or associated undertaking or related undertaking or other such person as is mentioned in subsection (1) of this section and any statement which may be offered in defence, make any order or direction as it thinks fit including a direction to the person concerned to attend or re-attend before the inspector or produce particular books or documents or answer a particular question put to him by the inspector, or a direction that the person concerned need not produce a particular book or document or answer a particular question put to him by the inspector.

(5) In this section, any reference to officers or agents shall include past as well as present officers and agents, as the case may be, and “agents”, in relation to an approved stock exchange or authorised member firm or other person mentioned in subsection (1) of this section, shall include the bankers, accountants, solicitors, auditors and the financial and other advisors of the approved stock exchange or authorised member firm or other person mentioned in subsection (1) of this section, whether those persons are or are not officers of the approved stock exchange or authorised member firm or other body or undertaking.

Expenses of and fees relating to an investigation.

61.— (1) The expenses of and incidental to an investigation and the fees incurred by an inspector appointed by the Court under section 57 of this Act or by the Bank under section 64 of this Act shall be defrayed by the Bank but the Court may direct that any person dealt with in the report shall be liable, to such extent as the Court may direct, to repay the Bank any expenses or fees incurred.

(2) Without prejudice to subsection (1) of this section, any person who is—

(a) convicted on indictment of an offence on a prosecution instituted as a result of an investigation,

(b) ordered to pay damages or restore any property in proceedings brought as a result of an investigation, or

(c) awarded damages or to whom property is restored in proceedings brought as a result of an investigation,

may, in the same proceedings, be ordered to repay all or part of the expenses and fees referred to in subsection (1) of this section, and interest as appropriate, to the Bank or to any person on whom liability has been imposed by the Court under that subsection, provided that, in the case of a person to whom paragraph (c) of this subsection relates, the Court shall not order payment in excess of one-tenth of the amount of the damages awarded or of the value of the property restored and interest as appropriate as the case may be, and any such order shall not be executed until the person concerned has received his damages or the property has been restored, as the case may be.

(3) The report of an inspector may, if he thinks fit, and shall, if the Court so directs, include a recommendation as to the directions, if any, which he thinks appropriate, in the light of his investigation, to be given under subsection (1) of this section.

Inspectors' reports and proceedings thereon.

62.—(1) An inspector appointed under section 57 of this Act may, and shall if the Court so requires, make an interim report to the Court and, on conclusion of the investigation, shall make a final report to the Court but he may at any time in the course of the investigation, without making an interim report, inform the Court of matters coming to his knowledge as a result of the investigation tending to show that an offence has been committed.

(2) On a report being presented to it under this section, the Court shall—

(a) forward a copy of any such report to the Minister, the Minister for Enterprise and Employment, and the Bank,

(b) if it thinks fit, furnish a copy thereof to the approved stock exchange or authorised member firm concerned and its auditors, or, if the report concerns the affairs of an authorised member firm or an associated or related undertaking of an authorised member firm, furnish a copy thereof to the approved stock exchange of which the authorised member firm in question is a member, and

(c) if it thinks fit—

(i) furnish a copy thereof, on request and on payment of such fee as it may fix, to any other person who is a shareholder of the approved stock exchange or authorised member firm concerned or a shareholder of any other body dealt with in the report by virtue of section 57 of this Act or whose interests as a creditor or client of the approved stock exchange or authorised member firm concerned or of any other such body appear to the Court to be affected, and

(ii) cause any such report to be printed and published.

(3) Where the Court so thinks proper it may direct that a particular part of a report made by virtue of this section be omitted from a copy forwarded or furnished under subsection (2) (b) or (2) (c) (i) of this section or from the report as printed and published under subsection (2) (c) (ii).

(4) The Minister may lay a report forwarded under subsection (2) of this section before each House of the Oireachtas if he and the Minister for Enterprise and Employment think it proper to do so having due regard to the exigencies of the common good and the rights of any person referred to in that report and a report so laid shall be privileged.

Powers of Court following consideration of reports.

63.—(1) Having considered a report made under section 62 of this Act, the Court may make such order as it thinks fit in relation to matters arising from that report including—

(a) an order of its own motion for the winding-up of an approved stock exchange or for the winding-up or dissolution of an authorised member firm,

(b) an order for the purpose of remedying any disability suffered by any person whose interests were adversely affected by the conduct of the affairs of the approved stock exchange or authorised member firm provided that, in making any such order, the Court shall have regard to the interests of any other person who may be adversely affected by the order.

(2) If, in the case of any approved stock exchange or authorised member firm liable to be wound up or dissolved under this Act, it appears to the Bank from—

(a) any report made under section 62 of this Act as a result of an application by the Bank under section 57 of this Act, or

(b) any report made by inspectors appointed by the Bank under section 64 of this Act, or

(c) any information or document obtained by the Bank under this Act,

that a petition should be presented for the winding-up or dissolution of an approved stock exchange or authorised member firm, the Bank may, unless the approved stock exchange or authorised member firm is already being wound up or dissolved by the Court, present a petition for it to be so wound up or dissolved if the Court thinks it just and equitable for it to be so wound up or dissolved.

Appointment of an inspector by Bank.

64.—(1) Without prejudice to its powers under this Act, the Bank may, subject to subsection (2) of this section, appoint one or more inspectors to investigate and report on any or all of the following, namely—

(a) the affairs and conduct of the business of an approved stock exchange or an authorised member firm or other undertaking which is, or was at the relevant time, an associated or related undertaking of an approved stock exchange or an authorised member firm, or any particular aspect of such business,

(b) compliance of the approved stock exchange or authorised member firm with all or any of the following:

(i) conditions or requirements or both imposed by the Bank under this Act,

(ii) rules or codes of conduct set out or approved by the Bank under this Act,

(iii) rules of an approved stock exchange,

(iv) any requirement of this Act,

(v) rules or requirements approved or imposed by the Bank with respect to clients' money and investment instruments,

(vi) any other enactment, and

(c) any other matter as the Bank may consider appropriate.

(2) An appointment under subsection (1) of this section may be made by the Bank if it is of the opinion that there are circumstances suggesting that it is necessary—

(a) for the effective administration of the law relating to approved stock exchanges and their member firms, or

(b) for the effective discharge by the Bank of its statutory functions.

(3) The terms of appointment of an inspector under this section may define the scope of his investigation, whether as respects the matters or the period to which it is to extend or otherwise, and in particular may limit the investigation to matters connected with particular circumstances.

(4) Subject to the terms of appointment of an inspector, the powers conferred on him by this section shall extend to the investigation of any circumstances suggesting the existence of an arrangement or understanding which, though not legally binding, is or was observed or likely to be observed in practice and which is relevant to the purposes of his investigation.

(5) For the purposes of any investigation under this section, sections 58 to 62 , except sections 59 , 60 (3) and 61 (3), shall apply with the necessary modifications or references to the affairs of the approved stock exchange or authorised member firm or to those of any other person or any associated or related undertaking, so, however, that—

(a) the said sections shall apply in relation to all persons who are or have been officers or employees or agents of the approved stock exchange or authorised member firm or other person who appears to the inspector to have the information, document, material or explanation in his possession or under his control, and

(b) for references to the Court, except in sections 58 , 60 (4), 61 (1) and 61 (2) of this Act, there shall be substituted references to the Bank.

Power to make determinations for breaches of conditions or requirements.

65.—(1) Without prejudice to any other powers of the Bank under this Act or any powers of an approved stock exchange, where it appears, on the basis of information provided by an authorised officer or an inspector appointed under section 64 of this Act, that there has been a breach by an approved stock exchange or a memberfirm of a condition or requirement imposed by the Bank under any or all of the sections to which this section applies, the Bank may—

(a) apply to the Court in a summary manner for a determination that there has been a breach of a condition or requirement, or

(b) notify the approved stock exchange or member firm.

(2) This section applies to the following sections, namely, sections 9 (2), 9 (9), 10 (2) (a), 11 (1), 18 (2), 18 (6), 18 (7), 18 (13) (b), 18 (14), 21 (2) (a), 21 (7), 22 (1), 26 (1), 26 (4), 31 (3), 31 (4), 33 (1), 38 (1), 43 (1) and 52 (1) of this Act.

(3) A notification under subsection (1) (b) of this section shall—

(a) set out reasons for the notification, and

(b) state that the Bank shall apply to the Court in a summary manner for a determination that there has been a breach of a condition or requirement under all or any of the sections to which this section applies, unless the approved stock exchange or member firm concerned requests, in writing within 7 days of the date of the notification, that the provisions of subsections (5) to (9) of this section shall apply.

(4) The Court, on hearing evidence in any proceedings under this section, may do all or any of the following—

(a) issue a reprimand to the approved stock exchange or member firm,

(b) direct that the approved stock exchange or member firm concerned shall pay to the Bank a specified sum, not to exceed £500,000, in respect of any breach of a condition or requirement,

(c) dismiss the application or make any other order as may be appropriate,

(d) make such order as to costs as it thinks fit.

(5) Where a request in writing has been made to it under subsection (3) of this section, the Bank may appoint a Committee to inquire into whether or not there has been a breach of a condition or requirement under a section referred to in subsection (2) of this section.

(6) A Committee appointed under subsection (5) of this section shall be appointed by the Bank from a panel established from time to time by the Minister, with the consent of the Minister for Enterprise and Employment, for that purpose and the provisions of the Second Schedule to this Act shall apply to the Committee and to the panel.

(7) Following an inquiry by a Committee appointed under subsection (5) of this section, that Committee may dismiss the application or may make a determination that there has been a breach of a condition or requirement and may do all or any of the following—

(a) issue a reprimand to an approved stock exchange or a member firm,

(b) direct that an approved stock exchange or member firm shall pay the Bank a specified sum, not to exceed £500,000, in respect of any breach of a condition or requirement,

(c) publish such details as it deems proper concerning a determination made under this subsection in the Iris Oifigiúil and in one or more newspapers circulating in the State,

(d) make such order as to costs as it thinks fit.

(8) An approved stock exchange or a member firm may appeal to the Court against a determination of the Committee issued under subsection (7) of this section.

(9) A sum due under this section may be recovered in any court of competent jurisdiction as a simple contract debt.

Search and seizure.

66.— (1) If a Judge of the District Court is satisfied on the sworn information of an authorised officer or an inspector appointed under section 64 of this Act that there are reasonable grounds for suspecting that there are on any premises any books or documents—

(a) of which production has been required under this Act, and

(b) which have not been produced in compliance with that requirement,

the Judge may issue a warrant authorising any member of the Garda Síochána, together with any other persons named in the warrant and any other members of the Garda Síochána, at any time or times within one month from the date of the warrant, on production if so requested of the warrant, to enter the premises specified in the information (using such force as is reasonably necessary for the purpose) and to search the premises or other place specified in the warrant and—

(i) take possession of any books or documents appearing to be such books or documents as aforesaid, or

(ii) to take, in relation to any books or documents so appearing, any other steps which may appear necessary for preserving them and preventing interference with them.

(2) Any books or documents of which possession is taken under this section may be retained for a period of three months or, if within that period there are commenced any such criminal proceedings as are mentioned in section 69 (1) (a) of this Act (being proceedings to which the books or documents are relevant), until the conclusion of those proceedings.

(3) A person who—

(a) obstructs or interferes with a member of the Garda Síochána acting under the authority of a warrant issued under this section, or

(b) is found on the premises or at the place specified in the warrant by a member of the Garda Síochána acting as aforesaid and who fails or refuses to give the member his name and address when required to do so or gives a name and address that is false or misleading, or

(c) who obstructs a member of the Garda Síochána in the lawful exercise of a power conferred on him to take possession of any books or documents,

shall be guilty of an offence.

Admissibility in evidence of reports of inspectors.

67.—A document purporting to be a copy of a report of an inspector appointed under the provisions of this Part shall be admissible in any civil proceedings as evidence—

(a) of the facts set out therein without further proof unless the contrary is shown, and

(b) of the opinion of the inspector in relation to any matter contained in the report.

Privilege.

68.—(1) Nothing in this Act shall compel the disclosure by any person of any information which he would, in the opinion of the Court, be entitled to refuse to produce on the grounds of legal professional privilege or authorise the taking possession of any document containing such information which is in his possession.

(2) The publication, in pursuance of any provision of this Part, of any report, information, book or document relating to inspectors appointed under this Part shall be privileged.

Consent to publication of information.

69.—(1) No information, book or document relating to a person which has been obtained under section 66 of this Act shall, without the previous consent in writing of that person, be published or disclosed, except to an appropriate authority, unless the publication or disclosure is required for all or any of the following, namely—

(a) with a view to the institution of, or otherwise for the purposes of, any criminal proceedings pursuant to, or arising out of, any enactments under which the Bank exercises statutory functions or any criminal proceedings for an offence entailing misconduct in connection with the management of the affairs of a person or misapplication or wrongful retainer of its property;

(b) for the purpose of complying with any requirement, or exercising any power, imposed or conferred by this Act with respect to reports made by inspectors appointed thereunder by the Court or the Bank;

(c) with a view to the institution by the Bank of proceedings for the winding-up under this Act of the person or otherwise for the purposes of proceedings instituted by the Bank for that purpose;

(d) for the purposes of proceedings under section 66 of this Act.

(2) A person who publishes or discloses any information, book or document in contravention of this section shall be guilty of an offence.

(3) For the purposes of this section “appropriate authority” includes any or all of the following, namely—

(a) the Bank;

(b) a person authorised by the Governor of the Bank;

(c) an inspector appointed under this Act;

(d) a Committee appointed under section 65 of this Act;

(e) the Minister;

(f) the Minister for Enterprise and Employment;

(g) any court of competent jurisdiction;

(h) a competent authority for the purposes of Council Directives 93/22/EEC of 10 May, 1993(1), 93/6/EEC of 15 March, 1993(1) or 77/780/EEC of 12 December, 1977(2) as amended by Council Directive 89/646/EEC of 15 December, 1989(3) .

Offences and penalties.

70.—(1) A person who is guilty of an offence under section 8 (3), 9 (15), 14 (8), 15 (l)(b), 17 (1), 17 (2), 18 (16), 24 (9),27(l)(b),31 (1),31 (2), 31 (16), 35(1), 35(3), 36 (4), 37 (6), 47 (2), 52 (3), 52 (7), 54 (6), 66 (3), 69 (2), 70 (4), 70 (7) or 70 (8), shall be liable—

(a) on summary conviction to a fine not exceeding £1,000 or, at the discretion of the court in the case of an individual, to imprisonment for a term not exceeding 12 months or both, or

(b) on conviction on indictment, to a fine not exceeding £1,000,000 or, at the discretion of the Court in the case of an individual, to imprisonment for a term not exceeding 10 years or both.

(2) Summary proceedings in relation to an offence under this Act may be brought and prosecuted by the Director of Public Prosecutions or tile Bank.

(3) Notwithstanding section 10 (4) of the Petty Sessions (Ireland) Act, 1851 , summary proceedings for any offence under this Act may be instituted within two years from the date of the discovery of the offence.

(4) Where an offence under this Act is committed by an approved stock exchange or member firm or body corporate or by a partnership and is proved to have been committed with the consent or connivance of, or to be attributable to, or to have been facilitated by any neglect on the part of any officer or employee of that approved stock exchange or member firm or person purporting to act on behalf of the approved stock exchange or member firm or body corporate or partnership, that officer or employee shall be guilty of an offence and shall be liable to be proceeded against and punished as if he were guilty of the first-mentioned offence:

Provided, however, that a person shall not be sentenced to imprisonment for such an offence unless in the opinion of the Court the offence was committed wilfully.

(5) (a) Where, on an application made in a summary manner by the Bank, the court is of the opinion that there has occurred or is occurring—

(i) a contravention of this Act,

(ii) a failure to comply with a condition or requirement imposed by the Bank in relation to an authorisation of a member firm or the approval of a stock exchange or with a direction issued by the Bank under section 29 of this Act,

the Court may, by order, prohibit the continuance of the contravention or failure by the person or persons concerned.

(b) The Court when considering the application may make such interim or interlocutory order as it considers appropriate.

(c) The foregoing provisions of this section are without prejudice to the statutory functions of the Bank.

(d) Where the Court is satisfied, because of the nature or circumstances of the case or otherwise in the interests of justice, that it is desirable, the whole or any part of proceedings under this section may be held otherwise than in public.

(6) If the contravention, breach or failure in respect of which a person was convicted under subsection (1) or (4) of this section is continued after conviction, he shall be guilty of a further offence on every day on which the contravention, breach or failure continues and for each such offence the person shall be liable on summary conviction to a fine not exceeding £1,000 or on conviction on indictment to a fine not exceeding £5,000.

(7) A person who, in purported compliance with any provision of this Act or any regulation thereunder, provides an answer or explanation, makes a statement or produces, lodges or delivers any return, report, certificate, balance sheet or other document false in a material particular, knowing it to be false, or recklessly provides an answer or explanation, knowingly withholds or omits information, makes a statement or produces, lodges or delivers any such document false in a material particular shall be guilty of an offence.

(8) (a) An officer of an approved stock exchange or member firm who destroys, mutilates or falsifies, or is privy to the destruction, mutilation or falsification of any record or document affecting or relating to the property or affairs of the approved stock exchange or member firm, or makes or is privy to the making of a false entry therein, shall, unless he proves that he had no intention to defeat the law, be guilty of an offence.

(b) Any such person as is mentioned in paragraph (a) of this subsection who fraudulently disposes of, alters or makes an omission in any such record or document, or who is privy to the fraudulent disposal of, altering or making ofan omission in any such record or document shall be guilty of an offence.

(9) Where there is a contravention of a provision of this Act applicable to a partnership each partner may be charged alone or jointly with any one or more of the partners with any offence in respect of such contravention and on conviction shall be liable for the penalty thereupon imposed.

(10) In any proceedings for an offence under a section of this Act applicable to partnerships it shall be a defence for a partner charged to prove—

(a) that the commission of the offence was due to a mistake or the reliance on information supplied to him or to the act or default of another person, an accident or some other cause beyond his control; and

(b) that he took all reasonable precautions and exercised all due diligence to avoid the commission of such an offence by himself or any other person under his control.

(11) Nothing in this Act or any other enactment, and no rule of law, shall preclude the prosecution of a partner for an offence of which another partner or any other person has been previously charged or convicted.

FIRST SCHEDULE

Supplementary Provisions in Relation to a Direction by the Bank Under section 29 of This Act

Section 29 .

1. In this Schedule, a reference to a stock exchange includes a reference to a proposed stock exchange, an approved stock exchange, a former approved exchange or directors and those responsible for the management of an approved stock exchange and reference to a member firm includes reference to a proposed member firm, an authorised member firm, a former authorised member firm or directors and those responsible for the management of an authorised member firm.

2. The Bank may revoke a direction given under section 29 of this Act unless an order under section 29 of this Act has been made by the Court in respect of the direction.

3. A stock exchange or member firm to whom a direction has been given under section 29 of this Act may apply to the Court for, and the Court may grant, an order varying or setting aside the direction.

4. Where the Bank applies to the Court for an order confirming a direction under section 29 of this Act, the Court may grant an order confirming the direction or setting it aside, or confirming it and, in the case of a direction made under section 29 (2) of this Act and subject to paragraph 5 of this Schedule, extending the period of its operation for such time, not exceeding the period of 12 months from the date the direction commenced to have effect, as the Court may, having regard to the circumstances, consider appropriate.

5. In addition to, or in lieu of, an order under section 29 (2) of this Act the Court may make such other order in the case as may appear to it to be necessary, including an order directing any person who holds money or other assets for or on behalf of the stock exchange or member firm or client of such stock exchange or member firm, ora specified person, not to dispose of any of those assets except on such conditions and in such circumstances as are specified in the order.

6. A direction which has been confirmed by the Court shall terminate—

(a) at the end of the period of operation specified by the Court,

(b) on the making by the Court of an order for termination on the application of the Bank,

(c) on the making of a winding-up order in respect of the stock exchange or member firm or, where a member firm is constituted as an unincorporated body of persons, a dissolution order, or

(d) on the making by the Court of an order for termination where the Court considers that the circumstances that gave rise to the direction have ceased to exist and that it would be unjust and inequitable not to make the order,

whichever first occurs.

7. If the Bank forms the opinion that the stock exchange or member firm to whom the direction was given is able to meet its obligations to its creditors, investors or clients but the circumstances which gave rise to the direction are unlikely to be rectified, it shall forthwith apply to the Court for, and the Court may grant, an order directing the said stock exchange or member firm to prepare, in consultation with the Bank, a scheme for the orderly termination of its business and the discharge of its liabilities to its creditors, investors and clients under the supervision of the Bank and to submit it to the Court within two months for approval.

8. The Court shall not approve the terms of a scheme under paragraph 7 of this Schedule without hearing the Bank and, in the event of dispute about terms of the scheme, the Bank or the stock exchange or member firm may apply to the Court to adjudicate on the matter.

9. If the stock exchange or member firm fails to comply with an order of the Court under paragraph 7 of this Schedule or fails to adhere to the scheme approved of by the Court, the Bank may apply to the Court for, and the Court may make, such further order as it considers appropriate for the winding-up of the stock exchange or member firm or, where a member firm is constituted as an unincorporated body of persons, for the dissolution of the member firm on the grounds that it is just and equitable that it be wound up or dissolved.

10. The Court may by order revoke or amend an order made by it under paragraph 4 of this Schedule.

11. Where a direction is given by the Bank in accordance with section 29 of this Act—

(a) the stock exchange or member firm to whom the direction has been given shall take all necessary steps to secure that its assets or client or investor assets wherever held, are not depleted without the prior authorisation of the Bank, and

(b) the Bank may direct a credit institution or any institution exempt under section 7 of the Central Bank Act, 1971 ,or any other financial institution which holds an account of the stock exchange or member firm to which the direction has been given, to suspend the making of payments from the account without the prior authorisation of the Bank.

SECOND SCHEDULE

Supplementary Provisions in Relation to a Committee Appointed Under section 65 of This Act

Section 65 .

1. Subject to paragraphs 2 and 3 of this Schedule, on the coming into operation of section 65 of this Act, the Minister shall, with the consent of the Minister for Enterprise and Employment, establish and maintain a panel which shall be composed of at least 7 persons.

2. Each of the persons appointed to the panel referred to in paragraph 1 of this Schedule shall be a person whom the Minister and the Minister for Enterprise and Employment consider to have relevant experience or special knowledge which will enable them to carry out their functions under this Act.

3. At least two of the persons appointed to the panel referred to in paragraph 1 of this Schedule shall be barristers or solicitors.

4. Subject to paragraph 5 of this Schedule, a person shall remain on the panel established under this section for such period as may be specified under that paragraph unless he dies or requests the Minister that his name be removed from the panel but unless he has died shall be eligible to have his name included on the panel for a further period or periods.

5. A panel established under section 65 of this Act shall stand dissolved on the expiration of such period as may be specified by the Minister, with the consent of the Minister for Enterprise and Employment, at the time he establishes it.

6. A member of the panel appointed to a Committee shall be paid by the Minister, following consultation with the Minister for Enterprise and Employment, such remuneration and allowances for expenses as the Minister may determine.

7. A Committee shall be composed of no less than three persons at least one of whom shall be a barrister or solicitor.

8. The Minister, with the consent of the Minister for Enterprise and Employment, may at any time remove a member from the panel for stated misbehaviour.

9. The procedures of Committees appointed under section 65 of this Act shall be laid down, from time to time, in rules made by the Minister, with the consent of the Minister for Enterprise and Employment, and shall include a rule providing for the appointment of a Chairperson.

10. A Committee shall be independent in the discharge of its functions.

11. The Bank shall make available to a Committee such services, including staff, as may be reasonably required by the Committee.

12. On the completion of an inquiry and following the making of a determination under section 65 of this Act, a Committee shall serve on the Bank and on the approved stock exchange or member firmconcerned a report of its inquiry and a notification of its determination specifying the nature of the inquiry and the evidence laid before it and any other matters it thinks fit.

13. An inquiry under section 65 of this Act may be carried out, at the request of or with the consent of the approved stock exchange or member firm concerned, by an examination of the relevant documents and written submissions from the Bank and the approved stock exchange or member firm concerned in place of an oral hearing.

14. A Committee appointed for the purposes of holding an inquiry under section 65 of this Act shall have the powers, rights and privileges vested in the High Court or a judge thereof on the hearing of an action in respect of—

(a) the enforcement of the attendance of witnesses and their examination on oath or otherwise, and

(b) the compelling of the production of documents,

and a summons signed by the Chairperson of the Committee or by such other member of the Committee as may be authorised by the Committee may be substituted for and shall be equivalent to any formal procedure capable of being issued in an action for enforcing the attendance of witnesses and compelling the production of documents.

15. Where—

(a) a person on being duly summonsed to attend before a Committee established for the purposes of section 65 of this Act makes default in attending, or

(b) a person, being in attendance as a witness before a Committee refuses to take an oath lawfully required by that Committee to be taken, or to produce any document in his power or control lawfully required by that Committee to be produced by him or to answer any question to which the Committee may lawfully require an answer, or

(c) a person, being in attendance before a Committee does anything which, if the Committee were a court of law having power to commit for contempt, would be contempt of court,

such person shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding £1,000.

16. A witness before a Committee shall be entitled to the same immunities and privileges as if he were a witness before the Court.

17. In this Schedule, “Committee” means a committee appointed under section 65 of this Act.

(1) O.J. No. L 141 11/6/93.

(2)O.J. No. L 322 17/12/77.

(3) O.J. No. L 386 30/12/89.

(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.

⁽²⁾O.J. No. L 322 17/12/77.

⁽³⁾O.J. No. L 386 30/12/89.

⁽¹⁾ O.J. No. L 141 11/6/93.

⁽¹⁾ OJ. No. L141 11/6/93.

⁽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.

⁽¹⁾ O.J. No. L 141 11/6/93.

⁽¹⁾ O.J. No. L 141 11/6/93.

⁽²⁾ O.J. No. L 322 17/12/77.

⁽³⁾ Ο.J. No. L 386 30/12/89.