Glossary 

Notice to readers: This is a high-level summary of some terms used in various provisions of EU law. It is no substitute for considering the actual text of the relevant directives and other legislation or taking legal advice, where appropriate.

 

A | B | C | D | E | F | G | H | I | J | K | L | M | N | O | P | Q | R | S | T | U | V | W | X | Y | Z

A

Administrator for Funds

An entity which provides administration services to collective investment schemes and which requires specific authorisation under the Investment Intermediaries Act 1995 to carry on that particular investment business service.

Authorised Advisor

A specific type of investment business firm that can provide investment advice on retail investment instruments, i.e. those investment instruments set out in Section 25 and 26 (1)(a) of the Investment Intermediaries Act 1995, without the necessity to hold a letter of appointment. It can also act as a deposit agent or deposit broker.  In addition, it can receive and transmit orders to a product producer from which it holds a letter of appointment. An Authorised Advisor is obliged to recommend the most suitable investment product available in the market, regardless of whether or not it holds an appointment from the relevant product producer.

Authorised Designated Investment Company

A variable capital investment company which raises capital by providing facilities for the direct or indirect participation by the public and which is authorised under section 256(5) of the Companies Act 1990, Part XIII.

Authorised Non Designated Investment Company

A variable capital investment company which shall raise capital by promoting the sale of its shares to the public and which is authorised under the provisions of the Companies Act 1990, Part XIII.

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B

Branch (General)

There is no definition of the term “branch”. It is a concept of Community law whose meaning is ultimately to be determined by the European Court of Justice. There is some European case law which would support the view that a branch is a place of business, which has the appearance of permanency, such as an extension of the parent body, has a management and is materially equipped to negotiate business with third parties, without resource to the parent body, the head office of which is abroad.  However, there are certain provisions of Community law that have “branch” specifically defined for the purposes of that particular piece of legislation (see below definitions).

Branch (Insurance/Reinsurance Intermediary - IMD)

‘Branch’ means a place of business other than the head office which is a part of an insurance/reinsurance intermediary, which has no legal personality and which provides insurance/reinsurance mediation services; all the places of business set up in the same Member State by an insurance/reinsurance intermediary with headquarters in another Member State shall be regarded as a single branch.

Branch (Credit Institutions)

In relation to credit institutions, ‘branch’ means a place of business which forms a legally dependent part of a credit institution and which carries out directly all or some of the transactions inherent in the business of the credit institutions.

In relation to other financial service providers ‘branch’ usually means a place of business set up (as a branch of a company) in a jurisdiction separate from the jurisdiction in which the financial service provider is regulated, and which is permitted to offer financial services under freedom of establishment rules under EU legislation.

Branch (MIFID)

‘Branch’ means a place of business other than the head office which is a part of an investment firm, which has no legal personality and which provides investment services and/or activities and which may also perform ancillary services for which the investment firm has been authorised; all the places of business set up in the same member state by an investment firm with headquarters in another member state shall be regarded as a single branch.

Building Society

Building Society means a building society incorporated or deemed by section 124(2) to be incorporated under the Building Societies Act 1989.

Bureaux de Change

A Bureau de Change is a business that provides members of the public with a service that involves buying or selling foreign currency. 

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C

CCA

Consumer Credit Act 1995

CCBM

Correspondent Central Banking Model: a mechanism established by the European System of Central Banks with the aim of enabling counterparties to use underlying assets in a cross-border context.  In the CCBM, national central banks act as custodians for one another.   This means that each national central bank has a securities account in its securities administration for each of the other national central banks (and for the ECB).

Collateral

Securities offered to the Bank by the counterparty partaking in the monetary policy or intra day credit operation.

Collective Investment Scheme

A legally constituted vehicle (e.g. unit trust, investment company, investment limited partnership) which pools together funds subscribed by investors and these funds are invested, through professional managers, in a range of assets in accordance with the investment objectives and policy as set out in a prospectus. There are two broad categories of Collective Investment Schemes (CIS) - UCITS and Non-UCITS.

Common Contractual Fund

A collective investment undertaking, being an unincorporated body established by a management company, under which the participants by contractual arrangement participate and share in the property of the collective investment undertaking as co-owners, provided:

a)     it is expressly stated in its deed of constitution to be established pursuant to the Investment Funds, Companies & Miscellaneous Provisions Act 2005;

b)    it holds an authorisation issued in accordance with the Investment Funds, Companies & Miscellaneous Provisions Act 2005; and

c)     it is not established pursuant to Council Directive No. 85/611/EEC of 20 December 1985.

Correspondent Central Bank

The Central Bank holding a security on behalf of the lending Central Bank.

Counterparty

An institution engaged in Monetary Policy or Intra day credit operations with the Bank - all counterparties offer the Bank collateral in the form of eligible securities to enable them to borrow from the Bank in ECB operations.

Coupon

Coupon payments due to the counterparty on foot of their holding of a security with the Bank are paid on the due date following receipt of same from the Issuer.

Credit Institution

Credit Institution means:

a)     an undertaking whose business is to receive deposits or other repayable funds from the public and to grant credits for its own account; or

b)    an electronic money institution.

Credit Union

A Credit Union is a financial co-operative formed for the promotion of thrift among its members by the accumulation of their savings; the creation of sources of credit for the mutual benefit of its members at a fair and reasonable rate of interest; and the use and control of members' savings for their mutual benefit.

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D

Denomination

Currency of security.

Deposit Agent

Deposit Agent means any person who holds an appointment in writing from a single credit institution enabling him to receive deposits on behalf of that institution and prohibiting him from acting in a similar capacity on behalf of another credit institution. The deposit agent may accept cash in repect of the deposit agency business. Only investment business firms authorised under the Investment Intermediaries Act 1995 (i.e. Multi-Agency Intermediaries or Authorised Advisors or Full Section 10 investment firms) may act as deposit agents.

Deposit Broker

Deposit Broker means any person who brings together with credit institutions persons seeking to make deposits in return for a fee, commission or other reward. A deposit broker may act for one or a number of credit institutions. The deposit broker may not accept cash.  All cheques must be made payable to the relevant credit institution.

Designated Credit Institution

A designated credit institution means an institution designated by the Central Bank of Ireland under the Asset Covered Securities Act 2001 to issue asset covered securities.

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E

ECB

European Central Bank.

EEA Branch (in relation to Credit Institutions)

European Economic Area (EEA) refers to the Member States of the EU and Norway, Liechtenstein and Iceland. An EEA Branch is an entity authorised in another member state of the EEA and operating in the State on a branch basis.

EEA Branch (in relation to Insurance entities)

The covering of a risk by an insurance undertaking in a Member State through a Branch situated in that State.

EEA Branch-EEA Cross Border

An entity which provides services both on a branch basis within the State and also on a cross border basis .

EEA Cross Border (in relation to Credit Institutions)

European Economic Area (EEA) refers to the Member States of the EU and Norway, Liechtenstein and Iceland. An EEA Cross Border entity is authorised to provide services on a cross border basis (no physical presence).

EEA Cross Border (in relation to Insurance entities)

The covering of a risk by an insurance undertaking in a Member State through a head-office or branch situated in another Member State.

Electronic Money Institution

An institution which issues electronic money. Electronic money means monetary value as represented by a claim on the issuer which is:

a)     stored on an electronic device;

b)    issued on receipt of funds of an amount not less in value than the monetary value issued; or

c)     accepted as means of payment by undertakings other than the issuer.

Eligible Assets Database

The database maintained by the ECB containing details of all eligible assets in the euro area that may be used by counterparties in monetary policy or intra trade day credit operations - this database is available online at www.ecb.int and gives such details as nominal amount outstanding, coupon dates, maturity date, coupon rate, type of asset, etc.

ESCB

The European System of Central Banks (ESCB) refers to the European Central Bank (ECB) and the national central banks of the EU Member States.  It should be noted that national central banks of Member States which have not adopted the single currency in accordance with the Treaty retain their powers in the field of monetary policy according to national law and are thus not involved in the conduct of the monetary policy of the Eurosystem.

Euro Area

The area encompassing the 17 Member States in which the Euro has been adopted as the single currency in accordance with the Treaty and in which a single monetary policy is conducted under the responsibility of the relevant decision-making bodies of the ECB.

The euro area comprises Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia and Spain.

European Union

The EU comprises 27 members states: the 17 members of the Euro Area as well as Bulgaria, the Czech Republic, Denmark, Latvia, Lithuania, Hungary, Poland, Romania, Sweden and the United Kingdom.

Eurosystem

Comprises the ECB and the national central banks of the Member States which have adopted the Euro in Stage Three of EMU.  There are currently 17 national central banks in the Eurosystem.

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F

Futures and Options Exchange

A Futures and Options Exchange, the rules of which have been approved under Section 101 of the Central Bank Act 1989.

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G

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H

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I

IIA

Investment Intermediaries Act 1995

Insurance Intermediary

A person who, for remuneration, undertakes or purports to undertake insurance mediation.

Insurance Mediation 

Means any activity involved in proposing or undertaking preparatory work for entering into insurance contracts, or of assisting in the administration and performance of insurance contracts that have been entered into (including dealing with claims under insurance contracts), but does not include such an activity that:

 a)     is undertaken by an insurance undertaking or an employee of such an undertaking in the employee’s capacity as such; or

b)    involves the provision of information on an incidental basis in conjunction with some other professional activity, so long as the purpose of the activity is not to assist a person to enter into or perform an insurance contract; or

c)     involves the management of claims of an insurance undertaking on a professional basis; or

d)    involves loss adjusting or expert appraisal of claims for insurance undertakings.

Insurance Mediation Register

A Register of insurance and/or reinsurance intermediaries which have been registered with the Central Bank of Ireland, maintained pursuant to Section 25 (1) of the European Communities (Insurance Mediation) Regulations 2005.

Insurance Undertaking

An insurance undertaking means an undertaking which has received official authorisation in accordance with Article 6 of Directive 73/239/EEC, Article 6 of Directive 79/267/EEC or Article 3 of Directive 2005/68/EC.

Investment Firm (MiFID)

Means, subject to paragraph 2 European Communities (Markets in Financial Instruments) Regulations 2007 any person, other than a tied agent which person’s regular occupation or business is the provision of one or more investments services to third parties on a professional basis, or the activity of dealing on own account on a professional basis, but does not include a natural person unless:

a)     his or her legal status ensures a level of protection for third parties’ interests equivalent to that afforded by legal persons;

b)    he or she is subject to equivalent prudential supervision appropriate to his or her legal status; and 

c)     if paragraph 3 of the European Communities (Markets in Financial Instruments) Regulations 2007 is applicable, he or she ensures that the conditions set out in that paragraph are fulfilled.

Investment Business Firm (Investment Intermediaries Act 1995)

Means any person, other than an Investment Firm (MiFID), who provides one or more investment business services or investment advice to third parties on a professional basis and for this purpose where an individual provides an investment business service and where that service is carried on solely for the account of and under the full and unconditional responsibility of an investment business firm or an insurance undertaking or a credit institution that activity shall be regarded as the activity of the investment business firm, insurance undertaking or credit institution itself.

Investment Limited Partnership

A partnership which holds a certificate of authorisation issued in accordance with the Investment Limited Partnerships Act 1994.

Investment Product Intermediary

Means an investment business firm or a solicitor holding a practising certificate (within the meaning of the Solicitors Acts 1954 to 1994) who does all or any of the following:

a)     acts as a deposit agent or as a deposit broker;

b)      provides a service for the reception and transmission of orders to a product producer

i.     in units or shares in undertakings for collective investments in transferable securities within the    meaning of the Regulations of 1989:

ii.      units in a unit trust;

iii.     other collective investment scheme instruments;

iv.    shares in a company which are listed on a stock exchange;

v.    bonds listed on a stock exchange or prize bonds;

vi.     tracker bonds (except when offered by an insurance undertaking);

vii.    Personal Retirement Savings Accounts within the meaning of Part X of the  Pensions Act 1990, except when offered by an insurance undertaking).

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J

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K

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L

Licensed Bank

A bank licensed pursuant to Section 9 of the Central Bank Act 1971.

Life Undertaking

The holder of an authorisation under the European Communities (Life Assurance) Framework Regulations 1994 (SI 360/1994), which underwrites life assurance contracts.

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M

Moneybroker

A person carrying on a moneybroking business.

Moneybroking business

Any business which consists of the business of arranging all or any of the following, that is to say:

a)    loans or borrowings of money;

b)    purchases or sales of foreign exchange;

c)     transactions of a type which for the time being stand prescribed by order under Section 109 of the Central Bank Act 1989; and

d)    other transactions which are similar in effect to any of those to which paragraph (a), (b) or (c) relate,

between any two or more persons being a holder of a licence under Section 9 of the Central Bank Act 1971, a building society, or a financial institution.  ‘Moneybroking’ shall be construed accordingly.

Moneylender

A person who carries on the business of moneylending, or who advertises or announces himself or holds himself out in any way as carrying on that business; but does not include:

a)     any pawnbroker in respect of business carried on by him in accordance with the provisions of the Pawnbrokers Act 1964;

b)    a society which is registered as a credit union under the Industrial and Provident Societies Acts 1893 to 1978, by virtue of the Credit Union Act 1966;

c)     a registered society within the meaning of the Friendly Societies Acts 1896 to 1977;

d)    a credit institution;

e)     a person who supplies money for the purchase, sale or hire of goods at an APR which is less than 23 per cent (or such other rate as may be prescribed);

f)     a mortgage lender.

Moneylending

Credit supplied by a moneylender to a consumer on foot of a moneylending agreement.

Moneylending Agreement

A credit agreement into which a moneylender enters, or offers to enter, with a consumer in which one or more of the following apply:

a)     the agreement was concluded away from the business premises of the moneylender or the business premises of the supplier of goods or services under the agreement;

b)    any negotiations for, or in relation to the credit were conducted at a place other than the business premises of the moneylender or the business premises of the supplier of goods or services under the agreement;

c)     repayments under the agreement will, or may, be paid by the consumer to the moneylender or his representative at any place other than the business premises of the moneylender or the business premises of the supplier of goods or services under the agreement; or

d)    where the total cost of credit to the consumer under the agreement is in excess of an APR of 23 per cent, or such other rate as may be prescribed.

Mortgage Intermediary

A person (other than a mortgage lender or credit institution) who, in return for commission or some other form of consideration:

a)     arranges, or offers to arrange, for a mortgage lender to provide a consumer with a housing loan; or

b)    introduces a consumer to an intermediary who arranges, or offers to arrange, for a mortgage lender to provide the consumer with such a loan.

Multi-Agency Intermediary

A specific type of investment business firm that may receive and transmit orders in retail investment instruments, i.e. those investment instruments set out in Section 25 and 26 (1)(a) of the Investment Intermediaries Act 1995, and provide advice on retail investment instruments only on behalf of product producers from whom it holds an appointment in writing. It can act as a deposit agent or deposit broker. 

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N

NCB

National Central Bank - Central Bank of an EU member state which has adopted the single currency in accordance with the Treaty.

Non-Life Undertaking

The holder of an authorisation under the European Communities (Non-Life Insurance) Framework Regulations 1994, which underwrites non-life insurance contracts.

Non-UCITS

Collective investment schemes authorised under the Unit Trusts Act 1990, Part XIII of the Companies Act 1990, the Investment Limited Partnerships Act 1994 and the Investment Funds, Companies and Miscellaneous Provisions Act 2005.

Non-UCITS Management Company

This is a management company approved under the provisions of the Unit Trusts Act 1990, Part XIII of the Companies Act 1990, the Investment Limited Partnerships Act 1994 and the Investment Funds, Companies and Miscellaneous Provisions Act 2005, to provide management services to Non-UCITS collective investment schemes.

Non-UCITS Manager

An entity which provides management services to collective investment schemes and requires specific approval under the relevant provisions of the Unit Trusts Act 1990, Part XIII of the Companies Act 1990, the Investment Limited Partnerships Act 1994 and the Investment Funds, Companies and Miscellaneous Provisions Act 2005, to carry out such services.

NTMA

National Treasury Management Agency: the state debt management agency, which issues bonds and manages the government debt.

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P

Payment Institution

A legal person that has been granted authorisation in accordance with Article 10 of the Payment Services Directive to provide and execute payment services throughout the European Community

Payment Services

A ‘payment service’ is defined in the Payment Services Directive as:

1.      Services enabling cash to be placed on a payment account as well as all the operations required for operating a payment account.

2.      Services enabling cash withdrawals from a payment account as well as all the operations required for operating a payment account.

3.      Execution of payment transactions, including transfers of funds on a payment account with the user's payment service provider or with another payment service provider:

— execution of direct debits, including one-off direct debits,

— execution of payment transactions through a payment card or a similar device,

— execution of credit transfers, including standing orders.

4.      Execution of payment transactions where the funds are covered by a credit line for a payment service user:

— execution of direct debits, including one-off direct debits,

— execution of payment transactions through a payment card or a similar device,

— execution of credit transfers, including standing orders.

5.      Issuing and/or acquiring of payment instruments.

6.      Money remittance.

7.      Execution of payment transactions where the consent of the payer to execute a payment transaction is given by means of any telecommunication, digital or IT device and the payment is made to the telecommunication, IT system or network operator, acting only as an intermediary between the payment service user and the supplier of the goods and services.

Product Producer (Investment Service)

The following entities and classes of entities are product producers:

a)     investment firms authorised in accordance with Directive 93/22/EEC of 10 May 1993 by a competent authority of another Member State of the European Communitites.

b)     authorised investment business firms (other than restricted activity investment product intermediaries or certified persons).

c)     member firms within the meaning of the Stock Exchange Act 1995.

d)    credit institutions authorised in accordance with Directives 77/780/EEC of 12 December 1977 and 89/646/EEC of 15 December 1989;

e)     in relation to investment business firms and credit institutions authorised to carry on business in a state other than a Member State, such branches of those firms or institutions as the supervisory authority approves from time to time;

f)    collective investment undertakings authorised under the law of a Member State of the European Communities to market units in collective investments to the public, and to the managers of such undertakings;

g)     investment companies with fixed capital as defined in Article 15(4) of Council Directive 77/91/EEC of 13 December 1976 the securities of which are listed or dealt in on a regulated market in a Member State; and

h)     the Prize Bond Company Limited, or any successor to it as operator of the Prize Bond scheme.

Product Producer (Mortgage Business)

A mortgage lender or other mortgage intermediary (e.g. bank, building society or retail credit firm)  which has issued an appointment to a mortgage intermediary to act as an intermediary on their behalf in relation to mortgage business.

Professional Investor Fund

A professional investor scheme is a category of non-UCITS collective investment scheme authorised by the Central Bank of Ireland. A professional investor scheme has a minimum subscription requirement of €125,000.

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Q

Qualifying Investor Fund

A qualifying investor fund is a category of non-UCITS investment fund authorised by the Central Bank of Ireland for which investment and borrowing restrictions are disapplied in full. QIFs have a minimum subscription requirement of €250,000. Investment is restricted to qualifying investors who certify that they are aware of the risks involved and the fact that they may lose the entire sum invested. A qualifying investor is defined as an individual with a minimum net worth (excluding main residence and household goods) in excess of €1.25 million or an institution, which owns or invests on a discretionary basis at least €25 million.

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R

Rating

The rating assigned to the debt instrument, institution, or guarantor by one of the three ratings agencies (Standard and Poor's, Moody's and Fitch Ratings).  The ratings are qualitative indicators of credit risk, i.e. the ability of issuers (or guarantors) to repay their borrowings .  The exact definition differs slightly across rating agencies but a harmonised scale exists for internal Eurosystem use.

Regulated Market

A multilateral system operated or managed by a market operator, which:

a)     brings together, or facilitates the bringing together of, multiple third-party buying and selling interests in financial instruments, in the system and in accordance with its non-discretionary rules, in a way that results in a contract in respect of the financial instruments admitted to trading under its rules or systems; and

b)    is authorised and functions regularly and in accordance with Part 6 of the European Communities (Markets in Financial Instruments) Regulations 2007.

Reinsurance Intermediary

A person who, for remuneration, undertakes or purports to undertake reinsurance mediation.

Reinsurance Mediation

Any activity involved in proposing or undertaking preparatory work for entering into reinsurance contracts, or of assisting in the administration and performance of reinsurance contracts that have been entered into (including dealing with claims under reinsurance contracts), but does not include such an activity that:

a)     is undertaken by a reinsurance undertaking or an employee of such an undertaking in the employee’s capacity as such; or

b)    involves the provision of information on an incidental basis in conjunction with some other professional activity, so long as the purpose of the activity is not to assist a person to enter into or perform a reinsurance contract; or

c)     involves the management of claims of a reinsurance undertaking on a professional basis; or

d)    involves loss adjusting or expert appraisal of claims for insurance undertakings.

Reinsurance Undertaking

A person who carries on a business in the course of which reinsurance as per the European Communities (Reinsurance) Regulations 2006 (SI 380/2006).

Retail Investment Instruments

These are instruments that can be offered by a Multi-Agency Intermediary or Authorised Advisor and are as follows:

 i.     units in a unit trust;

ii.     other collective investment scheme instruments;

iii.    shares in a company which are listed on a stock exchange;

iv.    bonds listed on a stock exchange or prize bonds;

v.     tracker bonds (except when offered by an insurance undertaking); and

vi.    Personal Retirement Savings Accounts within the meaning of Part X of the  Pensions Act 1990 (except when offered by an insurance undertaking).

Tracker Bonds and Personal Retirement Savings Accounts within the meaning of Part X of the Pensions Act 1990, when offered by an insurance undertaking, are insurance products/contracts. Only insurance intermediaries can act as intermediaries for insurance contracts.

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S

Special Purpose Reinsurance Vehicle

An undertaking (whether incorporated or not) that:

a)     assumes risks from insurance undertakings or reinsurance undertakings under reinsurance contracts; and

b)    fully funds its exposures to those risks through the proceeds of a debt issue or some other financing arrangement under which the repayment rights of the providers of the debt or financing arrangement are subordinated to the reinsurance obligations of the undertaking but does not include an authorised insurance undertaking or authorised reinsurance undertaking.

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T

Tied Agent

Means a natural or legal person who, under the full and unconditional responsibility of only one investment firm on whose behalf it acts, promotes investment and/or ancillary services to clients or prospective clients, receives and transmits instructions or orders from the client in respect of investment services or financial instruments, places financial instruments and/or provides advice to clients or prospective clients in respect of those financial instruments or services.

Tied Insurance Intermediary

Means any person who carries on the activity of insurance mediation:

(a)      who undertakes insurance mediation for and on behalf of one or more insurance undertakings in the case of insurance products that are not in competition, and

(b)      who acts under the direction of those undertakings;

Trustee to Funds

The trustee function in respect of a unit trust scheme, an investment company, an investment limited partnership and a common contractual fund includes the custodian function.  A trustee firm is an entity which has been approved to provide trustee services to authorised collective investment schemes.

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U

UCITS

Undertakings for Collective Investment in Transferable Securities which are authorised under the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011.

UCITS Manager

An entity which provides management services to collective investment schemes and requires specific authorisation under the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 to carry out such services.

UCITS Self-Managed Investment Company (SMIC)

A Self-Managed Investment Company (SMIC) is a collective investment scheme authorised under the European Communities (Undertakings for Collective Investment in Transferable Securities) Regulations 2011 as an investment company, which has not appointed a management company.

Unit Trust Scheme

A unit trust scheme which is authorised by the Central Bank of Ireland under the provisions of the Unit Trusts Act 1990.

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V

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X

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Y

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Z

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