In our last edition of Legal News, we outlined the proposed changes to company law contained in the Companies (Miscellaneous Provisions) Bill 2009. This Bill is now at the Select Committee stage and contains the following amendments:
Redomiciling of non-Irish Fund Companies
The Bill introduces measures which will enable non-Irish fund companies to redomicile into Ireland on the basis that the migrating fund company will continue its existence as a company registered under Irish law.
These measures are likely to be of particular interest to promoters of alternative investment funds such as hedge funds, real estate funds and private equity funds who wish to redomicile their offshore funds to a regulated, well-serviced OECD and EU jurisdiction.
The migrating fund company will, in common with all Irish fund companies, be required to be authorised and regulated by the Irish Financial Services Regulatory Authority (the “Financial Regulator”) either as an investment company under Part XIII of the Companies Act, 1990 or as a UCITS investment company under the UCITS Regulations in the same way as if it had been registered as an Irish investment fund company initially. A fund promoter wishing to re-domicile a non-Irish fund company to Ireland will need to enter into a separate application process with the Financial Regulator relating to the authorisation of the fund company in Ireland.
Market Purchase and Overseas Market Purchases
At the moment, an Irish public limited company can purchase its own shares and avail of the “market purchase” regime under the Irish Companies Act 1990 only where its shares are admitted to trading on a “recognised stock exchange”. Currently, the Irish Stock Exchange (being the Main Market and IEX) is the recognised stock exchange. Share buy-backs other than pursuant to the market purchase regime are difficult to implement.
A provision was introduced to the Bill to broaden the definition of “recognised stock exchange” in the Companies Act 1990 to include exchanges or markets outside of the State.
In addition, the proposed amendment creates a new type of purchase called an “overseas market purchase”. This type of purchase will require the same authorisation as a market purchase, and must also be notified to the Irish Companies Registration Office. However, as the stock exchanges will not be in Ireland, the company must also publish details of the purchase on its website. The details must be displayed for not less than 28 days after the date the purchase occurred.
The rationale behind the amendments is to allow international companies redomiciling to Ireland and whose shares are listed on overseas stock exchanges, to avail of the market purchase regime when undertaking share buy-back programmes.
IAASA Committees of Enquiry
A further amendment aimed at ensuring the continuity of membership of directors of committees of inquiry established by the Irish Auditing and Accounting Supervisory Authority has also been included in the Bill. This aims to ensure that the membership of such committees does not change during an enquiry, thereby endangering fair procedures and due process.