54 / 336
consultative organs that exist within the Coniniuni
,()r
tl>at purjx»se.
Scanad Eircann — 20
December
1974
I r u s t ^ (Authorised Investments) Order. 1974: Motion.
Mr. M I r v u : :
,
l u o v e ;
. J. O'Higgins: 1
. ' «at Seanad Eiroann
"i draft:
inn approves the following Order
Trustee (Authorised Investments) Order, 1974. a
PV of which Order in draft has heen laid before the
nouse.
Minister for
Finance (Mr. R. Ryan): The Trustee
me ° .
n s ed
f
n v e s t n , t
' n t s ) Act, 1958, defines the invest-
nts m which trustees may invest trust funds unless
pressly forbidden b v t he instrument, if anv, creating
lI,e
trust.
Minister for Finance may vary the authorised
t r
^
e s t m
?
n t s
*>y order. The primary qualification for
sub
,tCC M l v e s t n , e n ts is l , i a
t they should be secure, and,
' ^ect, to this, that tliev should give a favourable
,nco
»'e to the life tenant. '
h e
purpose of the order ljefore the House for
to
P
P
roval
-
is
to add Bank of Ireland loan stoT 1991-98
*tocK° ''
St
^
r u s t c c
Authorised Investments. The loan
for
W aS
'
s s u e d t o r a
'
s e
additional capital to provide
a
r
, e f u
t u re growth of the bank. It will-be repayable
1996*1
, ) C t W e en 3 1 s t
March, 1991, and 31st March,
j
• jn addition to interest at 10 per cent per annum,
carries subscription rights to cdpital stock of the Bank
'
I r e
' and. The
capital stock of the bank has been a
c
S t ec
Security here and in Britain for more than a
the 1
V a
'
l d t h e 7 p e r c e n t l o a n s t o c k 1 9 8 6
"
9 1 i s s u e d ,)V
vest "
k
'
n 1 9 6 6 W a s a d d e d t o t h e , i st o f
Trustee In-
* 'uents by the Trustee (Authorised Investments)
stock
r
'
1 9 6 7 ( S I
"
N o
-
2 8 5 o f 1 9 6 7 )
-
T h e n e w
l w a n
t
j
la
.
, s
quoted on the stock exchange and I am satisfied
tru
U
-
S 3 s u
'
t a
h l e stock for addition to the authorised
stee investments in this country.
, e
Minister for Finance is obliged under the Act
tern"
115
"'
1
d l e
f
()P
°wing persons in regard to the
list
1,S
f
3 n
^
o r d e r
proposes to make to vary the
^ °f authorised investments — a judge of the High
of th*
l l o t n i n a t e d
by the Chief Justice, the Governor
°f tl
C e n t r a l B a n k
>
t , i e
Public Trustee, the Chairman
of th°
B a n k s
Standing Committee, the President ,
p !\
e 1
"corporated Law Societv of Ireland and the
conl i
Cnt
°
f t h e S t
°
c k E x c h a n
S
e
(
I r i s h
Section). I have
pro
°
d t l l e s e
P
6
"
0
™
a n d
'ficy
, i a v e
welcomed the
I
s a
'
a n d
raised no objections to the proposed order.
"lent"
1 C o n s
'
d e
r i ng some further widening of the invest-
B u i l d
. ^ r s of Trustees. I have indicated to the Irish
ag
e
1118
Societies' Association the financial and man-
PriaT^f
1 r c
9
u
'
r e i n e n t s
that I would regard as appro-
a
" d th
tllC g r a n t i n
S °f Trustee Status to the societies
ati
0n
u
a r e a t
P
r e s e n t
being examined by the Associ-
i
n
.
" °P
e
to reach agreement on suitable conditions
is
d
n
^
a r
future. The other main area where change
funds
16 C o n c e r n s
Banks authorised to accept trust
ha
s
b °
n d e
P°
s i l
- Sincc the 1958 Act was passed there
Bank*
0
"
a
considerable increase in the number of
i
n
f
0
, n
£ Institutions operating here. There is now
Su
Perv
,e
-
a Coni
P
re
l
,c
n.sive system of bank licensing and
sati
s
f
le
L
S10
.
n u n d t
'
r
the aegis of the Central Bank. I am
0
"tat, in principle, the list of Banks should be
51
widened subject to a suitable arrangement lieing worked
. out to take account of the position of the Central
Bank as the banking supervisory authority.
I t is my intention also to have a more wide-ranging
review of the operation of the 1958 Act to see if there
is a need for amending legislation. The Act, in the
main, restricts Trustee Investment to fixed interest
securities, unless the trust deed provides otherwise.
Charity trusts are also governed by separate legislation,
the Charities Acts. Gilt-edged securities are less attrac-
tive now than in the past due to the erosion of capital
values by continuing inflation. As a result the cult of
the equity developed, with its prospects of capital
appreciation. The sharp fall in share prices on the stock
exchange and the difficulties encountered by some well-
known firms shows that such investment is not necess-
arily the solution to a trustee's problem. In fact holders
of Government securities are probably in a somewhat
better position than holders of ordinary shares at
present.
The problem is to find an investment formula that
strikes a balance between the need to ensure the security
of the trust fund and the provision of a reasonable
income to the beneficiary. I am not certain that there
is any really satisfactory solution in present economic
circumstances. It is a complex subject, which will
require close study and there is clearly every reason for
proceeding with great caution.
I am satisfied that the Bank of Ireland loan stock
is a suitable security to be added to the list of author-
ised investments and that it is desirable that Trustees
should have power to invest trust funds in it.
testion put and agreed to.
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