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11 1995

INVESTMENT INTERMEDIARIES ACT, 1995

PART VII

Approved Professional Bodies

Interpretation ( Part VII ).

55. —For the purposes of this Part—

approved professional body” means a body which—

(a) is representative of a profession of solicitors, accountants or representative of a profession with similar functions and has functions in regard to the regulation of members of the relevant profession, or is capable of having such functions; and

(b) stands approved under section 56 of this Act;

certified person” means a person who—

(a) being an individual, is a member of or is regulated by an approved professional body, or

(b) not being an individual, is a person managed and controlled by one or more individuals each of whom is regulated by that approved professional body or another professional body and at least one of whom is a member of or is regulated by the approved professional body concerned,

and has been granted and holds a valid certificate under the rules of that professional body deeming that person to be a fit and proper person to carry on investment business services or provide investment advice or both and specifying any conditions, limits or constraints on the type or the extent of such services which the person in receipt of the certificate shall comply with and which the approved professional body deems appropriate in the interests of the proper regulation of certified persons and the protection of investors or, in the case that the Law Society of Ireland is acting as an approved professional body, a solicitor in respect of whom a practising certificate (within the meaning of the Solicitors Acts, 1954 to 1994) is in force;

in an incidental manner” means in the course of and in conjunction with but subordinate to a professional activity other than the provision of any investment business service;

rules” includes all of the rules, regulations, codes of practice or ethics or other conditions governing the operations of a professional body and those of its members and persons regulated by it.

Grant of approval to operate as an approved professional body.

56. —(1) Subject to the provisions of this section, the Bank may grant or refuse to grant to any professional body an approval to operate as an approved professional body.

(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 professional body under this section, it shall serve notice on that professional body, 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 any charters, memorandum and articles of association, or other constitutional document, of the applicant and a copy of the rules and regulations under which the applicant proposes to conduct its business insofar as they affect or touch upon the regulation of investment business firms or investment business services or investment advice.

(5) A professional body which applies for approval under this section shall not be approved of by the Bank unless—

(a) it satisfies the Bank that any charters, memorandum of association and articles of association or other constitutional document and the rules of the applicant body together with any powers granted to the body or available to it under any enactment 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;

(b) it satisfies the Bank as to the probity and competence of those of its managers who are primarily concerned with the regulation and supervision of certified persons;

(c) (i) its rules or charters or other constitutional documents contain sufficient provision for the publication of information regarding inquiries or proceedings regarding any disciplinary matter investigated by the professional body concerned where the proceedings are concerned with the provision of investment business services; or

(ii) such matters are regulated by any other enactment;

(d) it has sufficient powers under its rules or otherwise for the regulation of the carrying on of investment business services or investment advice by persons certified by it for the purposes of this Act;

(e) it has adequate arrangements and resources for the effective monitoring of the activities of certified persons and for the enforcement of rules and conditions regulating the persons regulated by it and there is sufficient provision in its rules or under any enactment to provide for the withdrawal or suspension of certificates issued;

(f) where not based in the State it satisfies the Bank that it has a similar legal status in its home Member State or third country as that of approved professional bodies in the State, and that its members or persons regulated by it in that country are entitled to act as investment business firms.

(6) The Bank may, at any time prior to the grant or refusal of approval, request further information from an applicant 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.

(7) Any proposed amendment or addition that relates directly or indirectly to regulation of investment business services or to investment advice to the memorandum of association or articles of association or other constitutional document or rules of an approved professional body shall be made only with the prior consent in writing of the Bank, insofar as they relate to the provision of investment business services or investment advice.

(8) A professional body which has made an application under this section for approval shall be informed as soon as may be after the date of receipt of the application for approval or after the entry into force of this section, whichever is the later, whether or not the approval has been granted.

(9) It shall be an offence for a professional body to apply for approval under this section knowingly or recklessly using false or misleading information or knowingly or recklessly making false or misleading statements.

(10) Subject to any enactments governing its activities, an approved professional body shall establish and maintain procedures to investigate complaints against itself and certified persons in relation to the provision of investment business services or investment advice or to codes of practice established under this Act.

(11) Any appointment to the post of manager of any person to be concerned primarily with the supervision of certified persons on or after the granting of an approval under this section shall be subject to the prior approval in writing of the Bank, which said approval shall not be given unless the approved professional body satisfies the Bank as to the probity and competence of the proposed appointee.

Interim approval.

57. —(1) Notwithstanding section 56 of this Act, the Bank may, where it considers it appropriate in the interests of the proper and orderly regulation of investment business firms or the protection of investors or both, grant an interim approval to a professional body and that body shall be deemed to be an approved professional body, on the granting of such an interim approval for a specified period, and shall stand approved of under this Act until the Bank has granted or refused an approval to it, or until the specified period has expired:

Provided that, no later than six months after the coming into operation of this section or after the granting of an interim approval, it applies to the Bank under section 56 of this Act for an approval.

(2) Pending a decision by the Bank to approve or not to approve of a professional body, or during any period in which an interim approval under subsection (1) of this section is in force, 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 approved professional body 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) An approved professional body may, subject to any conditions or requirements laid down by the Bank, and with the consent of the Bank, issue interim certificates for a period of not more than six months to any person regulated by it and provided that the person complies with any conditions or requirements laid down by the approved professional body it shall be deemed to be a certified person during the period specified by the interim certificate.

(4) The approved professional body may appeal to the Court against the imposition of any condition or requirement or the giving of any direction under this section.

(5) On hearing an application under subsection (4) 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 professional bodies.

58. —(1) Without prejudice to section 56 of this Act, where the Bank grants an approval under that section, or consents to any proposed amendment or addition to a memorandum or article 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 professional bodies or certified persons or both:

(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 requirements or both on an approved professional body 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 professional body add, amend or revoke rules of that approved professional body where these relate to the provision of investment business services or investment advice by certified persons or the regulation and supervision of certified persons;

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

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, in the interests of the proper and orderly regulation and supervision of approved professional bodies or of certified persons or both, with the consent of the Minister for Enterprise and Employment, and insofar as an approved professional body of lawyers may be concerned, the Minister for Justice, 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 professional body,

(b) all approved professional bodies,

(c) a class of approved professional body,

(d) a specified period of time or times,

(e) all certified persons,

(f) a particular class of certified person,

(g) an associated undertaking or related undertaking of an approved professional body,

(h) any matter, as the Bank may consider appropriate, in the interests of the proper and orderly regulation and supervision of approved professional bodies and certified persons and the protection of investors or both.

(3) An approved professional body or certified person 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.

59. —Whenever the Bank refuses in accordance with section 56 (7) of this Act to consent to an amendment or addition to the memorandum of association, or articles of association, or both, or to the rules or other constitutional document of an approved professional body, it shall serve notice on the approved professional body concerned stating that it refuses to consent to the amendment or addition and setting out the reasons for the refusal in the notice.

Appeals on refusal to grant approval, etc.

60. —(1) A professional body on whom a notice has been served under section 56 (3) of this Act or an approved professional body on whom a notice has been served under section 59 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, within three months of the commencement of the hearing of the appeal, with the Minister for Enterprise and Employment (and where appropriate with the Minister for Justice), the Bank or the professional body concerned.

(3) If the Minister, with the consent of the Minister for Enterprise and Employment, and where appropriate the Minister for Justice, upholds an appeal made under this section the Minister shall inform the Bank of the decision and shall publish notice of that 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 approved professional body or consent to the proposed amendment of or addition to the memorandum of association, articles of association or rules of the approved professional body.

(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.

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

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

(b) an approved professional body—

(i) has failed to operate as an approved professional body within 12 months of the date on which the approval to be an approved professional body was granted,

(ii) has failed to operate as an approved professional body for a period of more than 6 months,

(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 professional body 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 professional bodies or certified persons or in order to protect investors or in any or all of these circumstances;

(b) an approved professional body 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 approved professional body 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 professional body has failed to comply to a material degree with a requirement of this Act;

(f) an approved professional body fails to comply with any or all of the conditions or requirements which were imposed when approval was granted or which were subsequently imposed;

(g) an approved professional body 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;

(h) the directors and managers of an approved professional body who are primarily concerned with the regulation of certified persons are no longer deemed by the Bank to fulfil the conditions of competence and probity required by section 56 of this Act;

(i) an approved professional body has so organised itself that the approved professional body 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 professional body or proposes to apply to the Court for an order to revoke approval of an approved professional body the following procedure shall apply, namely, the Bank shall serve notice on the approved professional body concerned 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 an approved professional body is revoked and where the approved professional body concerned is not a company which is being wound up—

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

(b) the former approved professional body shall, as soon as possible, after the revocation, notify the Bank, its members 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 approved professional body,

(c) in the case where—

(i) the former approved professional body 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 professional body has not so notified the Bank and the Bank is of the opinion that the said approved professional body 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 professional body 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 professional body for such period, not exceeding six months, prohibiting the former approved professional body 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 professional body or of members 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 professional body 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 an approved professional body is revoked and the approved professional body is a company which is being wound up—

(a) the liquidator of the former approved professional body 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 professional body would be subject if it were a former approved professional body 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 an approved professional body 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 professional body, 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 any of the members of the former approved professional body concerned.

(7) The Bank shall publish notice of any revocation of an approval of an approved professional body in the Iris Oifigiúil within 28 days of revocation.

(8) An approved professional body whose approval has been revoked under this Act shall cease to operate as an approved professional body.

(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)(h) of this section unless it has given the approved professional body an opportunity to remove the director or manager 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.

62. —(1) (a) An approved professional body shall keep at an office or offices approved by the Bank such books and records (including books of accounts) as may be specified from time to time by the Bank.

(b) An approved professional body shall notify the Bank of the address of every office at which any such books or records are kept.

(c) A person who contravenes paragraph (a) or (b) 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 professional bodies or different classes of approved professional body.

(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.

Authorisation of certified persons.

63. —A certified person shall be deemed to be an authorised investment business firm under this Act: Provided that—

(a) any investment business services provided by that person are so provided, in an incidental manner and within the limits, conditions or constraints of the certificate granted by the approved professional body, and

(b) the certified person has never had an authorisation revoked under section 16 (2) of this Act and not re-instated and that no manager or officer or director of that person has ever been a manager, officer or director of an investment business firm which has had its authorisation revoked, under section 16 (2) of this Act and not reinstated.