THE Central Bank is to take over responsibility for the supervision and regulation of investment intermediaries. Legislation is being prepared to facilitate the handing over of responsibility for all investment brokers to the Central Bank as soon as possible. It will take over from the Insurance Brokers Association (IBA), currently responsible for 120 brokers, and from the Department of Enterprise and Employment which regulates about 50 brokers.

Announcing the move yesterday the Minister of State for Commerce, Science and Technology, Mr Pat Rabbitte, said the Government had decided to "act swiftly and decisively" to restore confidence in the sector following the collapse of broker Tony Taylor and other earlier "financial scandals".

These scandals have "shaken public confidence in its ability to invest safely through the system of investment intermediaries operating around the country", Mr Rabbitte said yesterday.

Mr Martin Cosgrove, who was appointed by Mr Rabbitte to investigate the Taylor collapse, is understood to have recommended that the Central Bank take over regulation for all investment intermediaries. His investigation into the Taylor collapse is ongoing.

Under the Investment Intermediaries Act 1995, investment brokers who are members of the Irish Brokers Association are regulated by the association. About 120 brokers are regulated by the IBA.

Some 130 non IBA investment intermediaries are regulated by the Central Bank, while some 50 brokers are regulated by the Minister for Enterprise and Employment.

Last month the IBA wrote to the Department of Enterprise and Employment asking to be relieved of this task. The request followed a number of high profile cases where clients lost funds invested with brokers who were IBA members.

In August 1996, Mr Tony Taylor, who ran several investment companies, left Ireland with his wife following complaints from investors.

Earlier in the year, Mr Paul Taaffe, who ran Taaffe and Associates, left the State following complaints from investors whose money appeared to be missing.

In addition to investment brokers, the Central Bank supervises banks, building societies, companies in the International Financial Services Centre, the Irish Stock Exchange, stockbrokers and money brokers.

The decision to hand over full regulation to the Central Bank followed a review of the whole regulation system and particularly the current system of self regulation operated by the IBA, hem said. The review concluded that it would be best if all investment intermediaries were regulated by one body in order to maximise operating efficiency and ensure consistency, he said.

The Central Bank will be given additional resources to carry out the job. Its current powers in relation to in vestment intermediaries include authorising brokers to establish operations, setting conditions for the businesses, inspection, getting accounts and other financial information. A spokesman said these powers are used "to a greater or lesser extent depending on the risk profile of the business involved".