BRIAN COWEN has paved the way for a cross-Border financial services industry by relaxing the "minimum activities" rules for IFSC and financial sector jobs in the Republic.
The rules were introduced in the 1980s to stop international companies setting up "brass-plate" operations in the IFSC, and ensured they employed a minimum number of people in the Republic.
The deal announced by the Tánaiste and the North's First Minister-designate Peter Robinson on Monday will mean those international companies can set up branches in the North. In effect, the minimum activities rules have been extended to cover Northern offshoots set up by firms in the South and this has the Irish Financial Services Regulatory Authority's blessing.
The companies must still be based in the South if they are to benefit from the Republic's lower corporate tax rate, which is the main reason why many decided to set up operations in Dublin. The UK exchequer will enjoy higher income tax from the jobs created in the North.
Officials do not anticipate any transfer of jobs from the Republic as a result.
No new laws are required for the plan and no EU laws will be breached, according to Mr Cowen. The financial regulator will continue to monitor the activities of the Republic-based companies with Northern offshoots.
The regulator said it had "no difficulty" with Irish-authorised firms in the IFSC branching out to Northern Ireland so long as they maintained "the requisite level of expertise and experience to carry out their functions effectively and that any such moves would not impede our ability to supervise them".
The British regulator, the Financial Services Authority, also has no objections as there will be no displacement of activities from London to Dublin, or any transfer of profits from the UK to the Republic.
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