Under the new regime, it will be no longer possible to continue the type of relationship which the Irish Stock Exchange has had with the London Stock Exchange i.e. with one corporate entity operating in the two countries, subject to two separate statutory authorities.
The Stock Exchange Bill 1994, which has been delayed in its enactment by the change of government at the end of 1994, outlines how the Irish Stock Market will be administered after the "split" from the London Stock Exchange. The most significant features of the Bill are as follows:
- The Central Bank of Ireland will, as supervisor, be responsible for (a) the authorisation of the Irish Stock Exchange and its member firms; (b) the approval of rules of the Stock Exchange; and (c) the financial regulation of member firms. - The Irish Stock Exchange will become a limited company and the existing council of the Stock Exchange will be replaced by a Board comprised of representatives of the member firms and independent persons approved by the Central Bank. - It is likely that the new Stock Exchange rules will be as similar as possible to the rules of the London Stock Exchange. - Once approved by the Central Bank, member firms of the Stock Exchange will be entitled to operate in other EU member states. - Substantial fines will be levied for breach of the Stock Exchange Act and/or any conditions which are imposed by the Central Bank. - Significant powers of inspection and investigation will be available to the Central Bank to ensure that any conditions and regulations which are imposed by it are observed. - The Central Bank will be empowered to block the purchase or sale of significant shareholdings in any stockbrokers or exchanges which are subject to its regulation.
The Bill proposes to increase the transparency of internal investigations of alleged misconduct by regulated persons. The Ministers for Finance and for Enterprise and Employment will receive the reports of such investigations and will have the power to publish reports of the investigations.
Agreement has been reached between the Irish Stock Exchange and the London Stock Exchange which will allow Irish companies to maintain dual listings on both exchanges after the split. It is expected that the Bill together with the framework of regulations to be drafted by the Central Bank will come into effect during the next few months.
The content of this article is intended to provide a general overview to the subject matter. For further information or specialist advice, please contact Ambrose Loughlin or Julian Conlon on + 353-1-829 0000.
