10th Anniversary Issue: the next ten years
January 2006 marks the 10th anniversary of Finance Dublin, and it also marks the coming of age of Ireland's International financial services Industry, with the ending of the IFSC 10 per cent tax regime, and its replacement for all the founding companies of the IFSC with the new 12.5 per cent countrywide tax and regulatiory regime covering the entire Republic of Ireland.
The IFSC 1996-2006
The January 2006 edition is a special edition looking back over the past ten years, and forward to the next ten
Articles from this issue:
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| Busy pipeline of new firms The number of new company authorisations currently being considered by the Financial Institutions & Funds Authorisations (FIFA) unit of the Financial Regulator is exceptionally strong, with 18 new firms, operating in banking, insurance, investment and funds, currently seeking an authorisation. |
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| Creating a sense of identity Ireland’s international financial services sector’s sense of identity has been one of the unique factors behind its spectacular success, writes the Taoiseach Bertie Ahern, as he looks back on the role Finance Dublin has played in developing the industry. Writing in the tenth anniversary edition he says: ‘As an independent publication, Finance Dublin, offers a transparent mechanism that supplements the other consultative channels that the Government makes available to the industry.’ |
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| Banking sector calls for Financial Law Review Group The international banking sector has called for the formation of a Financial Law Review Group, resourced to provide the expertise necessary to bring about a world-class legislative regime for financial services. |
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| The next ten years Ten years ago, in the first edition of Finance Dublin we made two promises, ‘to provide a noticeboard for the (financial) centre - providing a source of ideas and business opportunities’, and to ‘provide a public forum for the centre, and on new concepts in the sectors that are clustered in the centre’. We have attempted to stick by this in the intervening years helped with the advent of the first Finance Dublin conference in March 2000 and almost 6,000 articles later, the formula remains the same. |
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| MiFID postponed The implementation of the Markets in Financial Instruments Directive (MiFID) has been postponed from April 30th, 2007, until November 1st, 2007. |
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| Skills shortage set to continue The shortage of suitable candidates in the international financial services industry looks set to continue into 2006, maintaining the inflationary effect on salaries. According to Mia Barry, a manager with Robert Walters, ‘packages offered in 2006 need to be competitive, with candidates now expecting a 10-20 per cent pay rise when moving jobs’. |
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| Remittance tax dismay Ireland’s major accountancy firms, along with IFS companies and representative bodies are making strong representation to Government, through various bodies and channels, to mitigate the Budget proposal to withdraw the remittance basis of tax - originally prompted by concerns arising following the 'Gama' case, but inadvertently affecting the whole status of FDI in Ireland. |
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| Activities ruling must be relaxed Ireland’s ‘minimum activities’ ruling, which means that all aspects of a fund servicing company’s business must be located in the State, should be relaxed, a leading industry player has said in this issue. |
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| Unilever chooses Luxembourg Unilever, the global consumer products company, has chosen Luxembourg as the domicile for its new pension asset pooling vehicle. The fund will be seeded with more than €2 billion (approximately US$2.3 billion) at launch, and Northern Trust will also act as the management company. |
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| AIB/BNY expands to Cork AIB/BNY Securities Services (Ireland) Limited (AIB/BNY) is to create 200 new jobs and invest over €13.5 million through the expansion of its operations in Ireland. As part of its expansion plan, the joint venture between Allied Irish Banks, plc and The Bank of New York will open a new operation in Cork. |
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| New regulatory chief appointed Patrick Neary, current prudential director of the Financial Regulator, has been appointed as the new chief executive of the Financial Regulator, replacing the incumbent Liam O’Reilly, who is retiring early next year. Neary was appointed to the position of prudential director in 2003, where his responsibilities included the protection of consumers’ deposits, funds and policies. He was previously head of securities and exchanges supervision and deputy head of banking supervision in the Central Bank, where he began his career in 1971. |
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| Looking forward from the past ten years - what the next ten years holds for the IFSC Contributors to this special edition of Finance Dublin were asked to give their views on what the next ten years holds for Ireland’s international financial services sector. According to the industry, key to the continued good health of the sector, will be the continued good credit rating of the Irish economy; the competitiveness of the economy; the quality of regulation; the maintenance of a supportive/competitive taxation environment, and the continued stability of democracy in the jurisdiction. |
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| The pace of regulation is not set to slow down The thorny issue of over-regulation looks set to continue to be an issue for the Irish international financial services industry going forward, with regulations on both a domestic and European level adding to the burden. Reinsurance will be regulated as of next year, with some industry players saying that the hedge fund sector will follow soon after, and they recommend that there are clear lines of communication between the industry and the Financial Regulator, if the industry is to prosper in an increasingly regulated environment. |
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| ‘If we are to have ‘reputation’ - we must have regulation’ Liam O’Reilly, the outgoing regulator, highlights the regulatory issues for the coming years. He says: 'For those operating in the international financial arena and are located in multiple jurisdictions we will continue to apply the regulatory model appropriate to the nature and scale of this business. We will not introduce additional regulatory burdens to those already applied to your operations in other jurisdictions. Nevertheless, if we are to have ‘reputation’ - we must have regulation.' |
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| A decade of change in fixed income markets – a decade of growth at BNP Paribas Derek Kehoe and John Coffey look back on the last decade in fixed income markets, and examine the key trends, including the introduction of the euro, which led to a revision of BNP Paribas’ European business model, as large streams of income disappeared overnight. In Dublin, the bank has continued to go from strength to strength, and is currently preparing a move to a larger new trading room. |
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| Challenge for sector is to surpass achievements of the past 10 years The outlook is bright for the international life, non-life and reinsurance sectors, with the challenge for the next 10 years, being to match the achievements of the last ten, say leading industry players. Regulation however, will continue to have a big impact on the industry, as the reinsurance sector prepares to be regulated for the first time, and the Solvency II project gathers steam. |
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| ‘Past performance does not necessarily give a guide to future performance’ Given the importance of the international banking sector to the Irish economy, it is vital that the sector’s competitiveness is maintained and a clear growth strategy is pursued for the future, according to Enda Twomey of the Irish Bankers Federation (IBF), who outlines the IBF’s contribution to the Department of an Taoiseach’s forthcoming strategic review of the sector. |
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| Where to next for the global hedge fund industry? The global hedge fund industry has seen spectacular growth over the past 10 years, with the market now valued at over $1 trillion. The Irish funds industry has benefited hugely from this growth, and the latest industry survey reveals that Irish companies now service more than a third of this market. As for what the next 10 years holds, opinions differ as to whether the industry can continue to grow or is headed for a setback. One thing which is for sure, writes, Des Quigley, is that the European market is set for growth as US-based institutions look to Europe, and regulatory changes open up new markets. |
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| A booming decade for Ireland’s international financial services industry The past 10 years has seen tremendous growth in Ireland’s international financial services (IFS) sector, with employment jumping from 2,700 in 1996 to 17,610 in 2005, and the number and scale of companies operating in the sector growing strongly. However, the last decade has also seen the IFS sector face some significant challenges, most notably the introduction of a post-IFSC taxation regime. We take a look back at the key events of the past 10 years, through the pages of Finance Dublin. |
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| Funds sector to play a greater role in securitisation industry going forward Ireland’s funds sector is set to play a greater role in the continuing development of the securitisation sector, with the different regulatory platforms presenting an opportunity for funds to become more involved in the sector. |
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| Staffing and regulation will be key issues for industry going forward The principal challenge facing Ireland’s fund servicing industry going forward will be to remain an attractive location in terms of the legislative and regulatory environment, say leading funds players, with concern expressed about the Financial Regulator’s current priorities as expressed in its recently published Strategic Plan. In addition, maintaining the quality of the labour force in the face of skill shortages and an escalating salary bill, will be another key challenge for the industry. |
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| The regulator’s ‘last resort’ JAMES DEENY gives an overview of the role the Financial Services Consultative Industry Panel will play over the next decade, in working with the regulator on Ireland’s ‘competitiveness agenda’. |
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| Product innovation and technology will be key drivers of future success International financial services companies should grasp the opportunity offered by engaging in research and development activities in Ireland, to play a tangible role in their parent company’s success. |
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| Product innovation is key to growth Tom Healy head of the ISE outlines the crucial issues in the coming ten years for Irish Finacial services and surveys the last ten years. |
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| Offering the whole package will be key to Ireland’s continued success The future success of Ireland’s international financial services sector will depend on more than just tax, with quality of service, and the regulatory and legal infrastructure also being key. On the tax side, Ireland can benefit from a future change in the approach to VAT for financial services if the industry works now to ensure that the EU adopts a position of removing the existing barriers to organisation of services within financial services groups. |
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| Ireland needs to relax ‘minimum activities’ ruling It is imperative that Ireland relaxes its ‘minimum activities’ ruling with immediate effect, writes GERRY BRADY, so that certain aspects of funds servicing can be exported to lower cost destinations such as Poland. Failure to do so will inevitably foster the development of a lower cost funds servicing industry in Eastern Europe and India, he adds. |
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| The future of the Docks area |
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| 2006 looks set to be another record year on ISE The pipeline for new funds and debt listings looks as strong as ever as we enter a another year on the Irish Stock Exchange. |
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| New Fund Listings The latest fund listings |
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