2026-04-21

Over recent months, I have been vocal in this House and elsewhere in supporting the Government's proposals for personal investment accounts and calling for further tax reforms to ensure that existing investors will not be not left behind. I have pushed the need to abolish the deemed disposal rule. As long deemed disposal exists in Ireland, it will discourage international funds, including many domiciled in Ireland, from being offered to Irish retail investors. This is because funds would have to create a complicated additional layer of accounting to make their offerings available to Irish investors. I want to talk about the industry we have in Ireland and the one that we could have. It is nearly 40 years since the International Financial Services Centre, IFSC, which has been a phenomenal success, was established. It was not just about the small geographical area off the docklands that we call the IFSC; the whole country benefited from the spirit of the centre. The Irish funds and asset management sector currently employs 20,000 people in every region of Ireland. Forty years on, we should not be complacent and take Ireland's historic attractiveness to international finance and investment for granted. One of the main things that made Ireland attractive was its dynamic, legislative and regulatory framework that promoted innovation and fostered competitiveness and growth. As the EU is pushing for greater market integration, Ireland must work even harder to stay ahead of the curve in order to remain attractive and have offering which is compelling. It is only by doing this that we can protect and grow Irish jobs. There is a need for urgency in this regard. The updated Ireland for Finance offers a timely opportunity to deliver on the urgency needed on two fronts in particular. First, greater proportionality in how the State integrates regulation and supervision, with a focus on competitiveness and innovation. Ireland's financial rule book must be at the cutting edge of supporting the development and issuing of innovative new products. The principle of proportionality is embedded within EU financial services legislation. We must ensure that Ireland, therefore, does not fall behind other EU states that are subject to the same rules but that manage to move faster, avoid gold plating and overlapping regulation and, quite simply, offer a more compelling ecosystem within which to operate and innovate. Second, there is a need to update legislation and regulation to keep pace with the digital transformation which is occurring in international funds management. Digitalisation is a key Government priority, yet I fear that Ireland could fall behind other countries when it comes to the establishment of digital fund structures, also referred to as tokenisation. There is an urgent need for clarity and certainty on the legal basis under which tokenised funds and other digital fund structures can be established and operate in Ireland. If changes are needed, they should be expedited. Why is this important? It is important because it will ensure that Ireland's funds offering and ability to deliver solutions digitally, which is the direction of travel across the economy more generally, keeps us in the game.

I thank the Deputy for raising this issue at a time when Ireland's contribution to the global financial ecosystem has never been more vital or more visible. I welcome the opportunity to discuss the importance of the funds industry in Ireland and the need for competitiveness. I apologise; copies of my script are on the way. We thought they had already been sent down. The latest estimate from IDA Ireland and Enterprise Ireland indicates that just over 20,000 people are directly employed in the funds sector. Furthermore, in terms of those working in the financial services industry - domestically and internationally focused - in Ireland, there are over 120,000 people employed, and these jobs are regionally spread throughout the country, employing highly skilled workers in almost every county. We know how important this sector is to our economy. Work is under way on a successor strategy to Ireland for Finance, the whole-of-government strategy for the development of the international financial services sector in Ireland. Anticipated for launch later this year, the new strategy will be informed by a wide range of national and international stakeholder engagement, public consultation and research. The funds sector will be a key aspect of this new strategy. The Department of Finance undertook a review of the funds industry in 2023 and the resulting funds review 2030 was published in October 2024. The review issued 42 recommendations to continue to grow this important sector of our economy. An implementation plan was published in October 2025. This includes a full breakdown of the recommendations and those responsible for their implementation. Of the 42 recommendations, the most substantive were categorised into four cohorts. The first was to grow exchange-traded funds, ETFs; the second was to grow private assets; the third was to grow retail investment; and the fourth was to address the risks and enhance transparency in structured finance. The recommendations to grow ETFs have been delivered by the Central Bank. The recommendations to grow private assets involve legislative, regulatory and tax changes. These are on track for completion this year. There is ongoing engagement in train with the industry and the Department of Enterprise, Tourism and Employment on changes sought to the Limited Partnerships Act. On retail investment, the Tánaiste has announced the Government's intention to introduce the legislative framework for an investment account this year. We want to make investing simpler, clearer and more accessible for ordinary people and to help their hard-earned money work harder for them over time. The aim is to legislate this year to allow accounts to be offered next year. In budget 2026 we provided for a reduction in the rate of taxation on returns from Irish and equivalent investment funds and Irish and certain foreign life assurance policies from 41% to 38%. This took effect from 1 January this year. In addition, in the same budget we committed to publish a roadmap in 2026, setting out the intended approach to simplify and adapt the tax framework to encourage retail investment. The roadmap, which will be published in the coming months, will take into consideration developments at EU level in respect of the savings and investments union. This is a major project for the Presidency this year. As home to the second largest funds industry in the EU and the third largest in the world, lreland does not just facilitate capital flows, we help to shape the architecture of the EU's savings and investment future. This is all-the-more crucial given the current challenges faced by the EU. These funding demands will continue to grow as we look to address our common goals, including security, competitiveness, digitalisation and a just and equitable green transition. It will be our responsibility to ensure we have the tools required to meet these challenges and continue to thrive.

I thank the Minister of State for his comprehensive response, including the reference to growing exchange-traded funds, which is something I want to see. I welcome the reduction in the exit tax, but the issue that remains is the deemed disposal rule and taxing unrealised gains, which interrupts compounding and undermines long-term savings behaviour. That is something the Tánaiste is looking at. The Minister of State spoke about it earlier. I also note that new polling by Amárach highlights the resounding public support for Ireland's investment industry, with 90% saying it is important that Ireland remain competitive within the EU investment industry. The people of Ireland understand the value of attracting high-quality, regionally dispersed international jobs and investment. The funds sector has been one of Ireland's real success stories in terms of exports. I ask the Government to commit to action to support and protect this important sector. Further to recent parliamentary questions I tabled, will the Minister of State provide an update on the transposition of the EU alternative investment fund managers directive in Ireland? This is particularly important in enabling the funds sector to continue to evolve and to develop new retail investment products for Irish savers. If he does not have an update on that now, perhaps he could seek one. In practical terms, Ireland's regulatory system has meant we have the products and solutions investors need and the environment for companies providing these to operate to high standards with commercial success and agility. This has helped transform Ireland into a leading funds management centre in Europe, supporting the export of Irish domiciled funds around the world. This was hard won and is the envy of many other countries.

On the alternative investment fund managers directive, the UCITS directive, the transposition was due to be done today but I am very sorry to say that this was not done by the Minister today. There will be a slight administrative delay. Work is continuing to finalise the draft statutory instruments. We hope the delay will be short and they will be ready for signature in the coming weeks. Everybody has to take responsibility for late transposition because it is a legal obligation on the State to transpose directives. One of my functions as Minister of State with responsibility for European affairs is to encourage Ministers to transpose directives on time. It is disappointing that this has not happened. The industry is rightly frustrated with this delay. I am grateful that Deputy Currie raised it. I agree it is essential that this directive is transposed as soon as possible. I will personally take that up with the Minister for Finance in the morning. A lot of people are starting to realise and be concerned about the issue of the deemed disposal rule on ETFs, which was also raised by the Deputy. That is something the Government could do. I have no doubt the Minister of State, Deputy Troy, and the Tánaiste will work towards that. I strongly encourage people to examine ETFs on the basis that perhaps Governments will look at this in the coming years and certainly within the relevant period from now. It is something the Government wants to do, as the Minister of State, Deputy Troy, and the Tánaiste have said. Our position in Ireland at the centre of the European funds ecosystem is a privilege and responsibility. By working together to support innovation and embrace opportunity while ensuring that our frameworks are robust, we can be confident that Ireland will remain a driving force in Europe's capital markets going forward.