Central Bank to take control of all brokers after changes to Bill
AN amendment to the Central Bank Bill 1996 is expected within days, to allow the bank to take over the regulation of all in vestment intermediaries. The Department of Finance is expected to add the amendment as the Bill is about to go through the committee stage.
Making the Central Bank the regulator of all investment intermediaries was recommended by Mr Martin Cosgrove who was appointed by the Minister of State for Commerce, Mr Pat Rabbitte, to investigate the collapse of the investment intermediary, Mr Tony Taylor. While his report is understood to be close to completion, there is a question mark over how much of the report will be published.
Because Section 75 of the Investment Intermediaries Act 1995 was used to obtain some information - from Mr Taylor's house - it may not be legally possible to publish some sections of the report.
Information obtained about a people under this section cannot be published without the previous permission in writing of those concerned. Sources said the report might be published but names and sensitive material could be deleted.
With the Central Bank Bill now through its second stage in the Dail, a decision was taken to add in a provision to extend the bank's supervisory powers to cover investment brokers.
It was decided to add an amendment to a Bill which was well through the legislative process, rather than draft an amendment to the Investment Intermediaries Act 1995, so that the change over to one supervisor for all investment intermediaries could be implemented quickly.
Following the collapse of investment broker, Mr Tony Taylor, and other earlier broker collapses, Mr Rabbitte announced, earlier this month, that the Central Bank would take over responsibility for the supervision and regulation of all investment intermediaries.
The Bank will take over the supervisory role of the Irish Brokers' Association which is currently responsible for 120 investment brokers, and of the department of Enterprise and Employment which regulates about 50 brokers. The Central Bank already regulates 130 brokers who are not members of the IBA.
At the time, Mr Rabbitte said the Government had decided to "act swiftly and decisively" to restore confidence in the sector after "financial scandals which have shaken public confidence in its ability to invest safely through the system of investment intermediaries".
Following the Taylor collapse, the IBA wrote to the Department of Enterprise and Employment asking to be relieved of its role of regulating its members who were investment brokers. The IBA continues to carry out the function until legislation to allow the Central Bank to take over is passed.