S.I. No. 28/1998:

TRUSTEE (AUTHORISED INVESTMENTS) ORDER, 1998.

TRUSTEE (AUTHORISED INVESTMENTS) ORDER, 1998.

I, CHARLIE McCREEVY, Minister for Finance, in exercise of the powers conferred on me by subsection (1) of section 2 (inserted by section 80 of the Central Bank Act, 1997 (No. 8 of 1997)) of the Trustee (Authorised Investments) Act, 1958 (No. 8 of 1958), and having complied with subsection (3) of the said section 2, hereby order as follows:

1. (1) This Order may be cited as the Trustee (Authorised Investments) Order, 1998.

(2) This Order shall come into operation on the 9th day of March, 1998.

2. (1) In this Order--

"authorised credit institution" means--

(a) a person who is the holder of a licence under section 9 of the Central Bank Act, 1971 (No. 24 of 1971),

(b) a person referred to in section 7 (4) (a) (ii) (inserted by section 30 of the Central Bank Act, 1989 (No. 16 of 1989)) of the Central Bank Act, 1971 ,

(c) a building society within the meaning of the Building Societies Act, 1989 (No. 17 of 1989), or

(d) a person who is the holder of an authorisation under the European Communities (Licensing and Supervision of Credit Institutions) Regulations, 1992 ( S.I. No. 395 of 1992 );

"authorised insurance undertaking" means the holder of an authorisation under the Insurance Acts and Regulations;

"the Bank" means the Central Bank of Ireland;

"the Life Assurance Regulations" means the European Communities (Life Assurance) Framework Regulations, 1994 ( S.I. No. 360 of 1994 );

"recognised credit-rating agency" means a credit-rating agency recognised by the Bank for the purposes of Council Directive 93/6/EEC of 15 March 1993¹;

"recognised exchange" means an exchange recognised by the Bank for the purposes of Council Directive 93/6/EEC of 15 March 1993;

"relevant collective investment scheme" means--

(a) a unit trust scheme authorised by the Bank under the Unit Trusts Act, 1990 (No. 37 of 1990),

(b) a designated investment company authorised by the Bank under Part XIII of the Companies Act, 1990 (No. 33 of 1990),

(c) a collective investment scheme authorised by the Bank under the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations, 1989 ( S.I. No. 78 of 1989 ),

(d) a collective investment scheme established in another Member State of the European Communities that has been authorised in accordance with Council Directive 85/611/EEC of 20 December 1985², or

¹O.J. No. L 141/1 of 11.6.93

²O.J. No. L 375/3 of 31.12.85

(e) any other collective investment scheme established in another state and approved by the Bank for the purpose of its being marketed in the State,

but excluding a collective investment scheme that is marketed solely to professional or qualifying investors of such class or classes as may be determined by the Bank;

"relevant State body" means a public company (within the meaning of the Companies Act, 1963 (No. 33 of 1963)) the majority of whose shares are held by a Minister of the Government or a body established by or under an Act of the Oireachtas (other than the Companies Acts, 1963 to 1990).

(2) In this Order a reference to any Act of the Oireachtas or any instrument made under such an Act shall be construed as a reference to that Act or instrument as amended by or under any subsequent such Act or instrument.

3. The investments specified in section 1 (inserted by section 1 of the Trustee (Authorised Investments) Act, 1958 (No. 8 of 1958)) of the Trustee Act, 1893, are hereby varied by--

(a) the deletion of the investments specified in that section, and

(b) the insertion in that section of the investments specified in the First Schedule to this Order.

4. (1) Subject to section 2 (4) (inserted by section 80 of the Central Bank Act, 1997 (No. 8 of 1997)) and section 5 (inserted by the said section 80) of the Trustee (Authorised Investments) Act, 1958 , a trustee shall comply with the conditions specified in the Second Schedule to this Order in respect of the investment of trust funds.

(2) Nothing in that Schedule shall affect the powers of investment of a trustee of a scheme to which the Pensions Act, 1990 (No. 25 of 1990), applies.

FIRST SCHEDULE

Article 3

1. (1) securities issued by the State,

(2) securities guaranteed as to capital and interest by the Minister for Finance or any other Minister of the Government,

(3) securities (other than shares) of a relevant State body that either--

(a) had net assets of not less than £100 million at the end of each of the three financial years immediately preceding the date of the investment, or

(b) is referred to in section 7 (4) (a) (ii) (inserted by section 30 of the Central Bank Act, 1989 ) of the Central Bank Act, 1971 ,

(4) securities (other than shares) of an authorised credit institution--

(a) having maturity dates that are one year or less after the dates of their issue, or

(b) that are listed on a recognised exchange if such securities have maturity dates that are more than one year after the dates of their issue,

(5) securities of an issuer that have a rating--

(a) in the case of long-term securities, that is not lower than AA or its equivalent, or

(b) in the case of short-term securities, that is not lower than A1 or its equivalent,

(6) an interest bearing deposit account with an authorised credit institution, or, subject to section 137 (2) of the Central Bank Act, 1989 , with the Bank,

(7) units or shares in a relevant collective investment scheme,

(8) annuity contracts specified at Class I of Annex I to the Life Assurance Regulations issued by an authorised insurance undertaking,

(9) life assurance contracts specified at Class I of Annex I to the Life Assurance Regulations issued by an authorised insurance undertaking and under which the capital sum repayable at maturity is not less than the capital sum invested,

(10) life assurance contracts specified at Class III of Annex I to the Life Assurance Regulations issued by an authorised insurance undertaking and linked to investment funds where an amount of those funds equal to not less than 90 per cent. of the net asset value thereof is held in cash deposits or in instruments that are listed on a recognised exchange,

(11) the equity of companies listed on the Irish Stock Exchange, being companies whose market capitalisation was not less than £100 million at the end of each of the three financial years immediately preceding the date of the investment,

(12) the equity of companies listed on a recognised exchange, being companies whose market capitalisation was not less than £500 million or its equivalent in the currency of another state at the end of each of the three financial years immediately preceding the date of the investment.

2. In paragraph 1 (5) of this Schedule "rating" means a rating given by not less than two recognised credit-rating agencies or a rating given by one recognised credit-rating agency in a case in which a rating lower than that rating is not given by any other such agency.

SECOND SCHEDULE

Article 4

1. A trustee shall not invest in instruments denominated in a currency other than the currency of the State if, immediately after the investment, the proportion of the trust funds invested in currencies other than the currency of the State would exceed 40 per cent. of those funds.

2. A trustee shall not invest in a relevant collective investment scheme or in a life assurance contract of the class specified in paragraph 1 (10) of the First Schedule to this Order if, immediately after the investment, the proportion of the trust funds invested in that particular scheme or, as may be appropriate, that particular contract would exceed one third of those funds.

3. (1) A trustee shall not invest in the equity of a company if, immediately after the investment, the proportion of the trust funds invested in that equity would exceed 10 per cent. of those funds.

(2) Nothing in this paragraph shall prevent a trustee from taking up a bonus issue of shares, or a rights issue of shares, accruing to an investment of the trust funds in the equity of a company.

4. Where any part of the trust fund is invested in equities, the trustee shall review those investments at intervals of not more than six months.

GIVEN under my Official Seal, this 9th day of February, 1998.

CHARLIE McCREEVY,

Minister for Finance.

EXPLANATORY NOTE.

This Order replaces the previous list of investments in which trust funds may be invested, as set out in section 1 of the Trustee (Authorised Investments) Act, 1958 , with a new list. The Order also specifies conditions which, subject to the Trustee (Authorised Investments) Act, 1958 , as amended by section 80 of the Central Bank Act, 1997 , are to apply to the investment of trust funds. The Order comes into operation on 9 March, 1998.