Minister Kelleher Announces the enactment of the Companies (Miscellaneous Provisions) Act 2009

US GAAP

Firstly it provides that parent companies incorporated in Ireland, many of whom already have a substantial presence in the State, can continue for a limited period to prepare their accounts in accordance with US Generally Accepted Accounting Principles, known as “US GAAP”, if they comply with specified criteria.

The companies in question have moved, or are in the process of moving their parent companies to Ireland and have a continuing obligation, because of their US listings to produce US GAAP accounts. There are logistical difficulties and financial implications involved with changing in a short time span either to Irish or International Financial Reporting Standards, which are those normally followed in the State. The Act provides for a transitional period to allow for this to take place in an orderly manner.

The period in respect of which an availing company can use these standards is set at a maximum of four years, and the date of termination of the proposal as the end of 2015.

The Act also gives the Minister for Enterprise, Trade and Employment the power to prescribe other internationally recognised accounting standards for similar companies for a similar limited period of time.

Migrating Funds

The Act also introduces a mechanism whereby certain collective investment fund entities can migrate their registered offices into and out of Ireland without firstly having to wind up in their current jurisdiction. This measure was introduced at the request of the Irish funds industry who reported that there is a window of opportunity to attract for Ireland to attract investment funds business from third countries if our laws were to allow such a mechanism. The funds entities in question are seeking to relocate to well regulated jurisdictions. This would respond to investor concerns arising from the recent financial turmoil.

This mechanism will be available to funds migrating from and to jurisdictions that will be prescribed by the Minister. Inward migrating funds will be authorised and supervised by the Irish Financial Regulator in the same way as existing collective investment funds already based here.

Recognition of Foreign Stock Exchanges for Overseas Market Purchase of Own Shares.

The Act also provides for the recognition, by order of the Minister, of Stock Exchanges outside the State on which overseas market purchase of own shares can be made by companies.

Currently the Irish Stock Exchange is the only stock exchange recognised for market purchase of own shares. The Act creates a new type of purchase called an “overseas market purchase”. An overseas market purchase is similar to a market purchase but with a new obligation on the company to publicise its purchase of own shares on the company website for the purposes of informing the market.

The power to recognise other exchanges is being provided to facilitate international groups that are relocating their parent undertaking to Ireland, that are not listed on the Irish Stock Exchange and that wish to make market purchases of their own shares.

Other measures

Finally the Act will limit potential costs to the Exchequer of certain types of investigations into the affairs of a company. It will also provide for continuity of membership by directors of committees of enquiry established by the Irish Auditing and Accounting Supervisory Authority (IAASA).

ENDS