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GAZETTE
P R A C T I C E
N O T E S
APRIL 1995
Cha r i t i es and I nve s tment
Introduction
The Commissioners of Charitable
Donations and Bequests for Ireland
("The Charity Commissioners") have
recently issued a "Revised Form of
Authorisation of Investments", the
text of which follows this
introduction.
This comprises a global authorisation
for trustees of charities to invest in
specified categories of securities,
without the need for any application to
be made to the Charity Commissioners.
This is a very significant extension of
the investment powers available to
such trustees where their trust
instrument does not already confer on
them wide investment powers.
The power of trustees, whether
charitabla or not, to invest is primarily
governed by the terms of the trust
instrument. If the trust instrument is
silent, then the trustees have to rely on
statute and are restricted to the trust
securities authorised by the Trustee
Act 1893 as amended by the Trustee
(Authorised Investments) Act 1958.
These securities basically consist
of Irish Government stocks, Bank
of Ireland stock, AIB shares and
deposit accounts with various
institutions.
Section 32 of the Charities Act 1961
as amended by Section 9 of the
Charities Act 1973 enables the
Charity Commissioners to confer on
charitable trustees power to invest
their fund in such manner as the
Charity Commissioners may think
proper. It is on foot of these
provisions that the Charity
Commissioners have issued this form
of authorisation.
In summary, in considering whether a
proposed investment is authorised, the
trustees of a charity should first refer
to their trust deed; if this does not
give them the required authority, they
should next refer to the investments
authorised by statute, and then to the
Form of Authorisation issued by the
Charity Commissioners. If the
proposed investment is not authorised
by any of the above, the trustees can
still apply to the Charity
Commissioners for authority to
invest in a specific investment under
Section 32 of the Charities Act 1961
as amended.
Text of Revised Form of
Authorisation of Investment
Section 32 of the Charities Act, 1961
as amended by Section 9 of the
Charities Act, 1973.
This form of authorisation supersedes
all previous authorisations as and
from the date hereof, but does not in
any way affect the validity of
transactions carried out under
previous authorisations.
Trustees of charities may:-
(a) invest in any investment
authorised by the Trust Instrument
constituting their trust;
(b) avail themselves of this
authorisation without any
application to the Commissioners;
(c) continue to hold an investment not
sanctioned by this authorisation if
acquired under any previous
authorisation.
If Exchange Control or other
permissions are required, it is the duty
of the trustees to apply for such
permissions. The Commissioners will
not answer any queries about any such
permissions.
The Commissioners DO HEREBY
ORDER that trustees of Charity Funds
be and are hereby authorised:-
To invest the funds of the Charity in
any or all of the following ways:-
1. The whole or any part of the fund
may be invested in Government
Stocks or other Trustee
Investments as authorised from
time to time by the Minister for
Finance.
2. Up to 60% of the funds may be
invested in the equity of Irish
registered companies with a listing
on the Irish Stock Exchange where
the market capitalisation of the
company exceeds IR£100 million
at the time of the investment,
limited to not more than 10% of
the funds in any one such
qualifying company.
3. Up to 25% of the funds may be
invested in the equity of Irish
registered companies with a
listing on the Irish Stock
Exchange where the market
capitalisation of the company
exceeds IR£50 million at the time
of the investment, limited to
not more than 5% of the funds
in any one such qualifying
company.
4. Up to one third of the funds may
be invested in any Unit Trust
which is authorised under the Unit
Trusts Act, 1972 as amended by
the Unit Trusts Act, 1990.
5. Up to 50% of the funds may be
invested in the equity of companies
which are part of the FTSE 100
index in the United Kingdom,
limited to not more than 10% of
the funds in any one such
qualifying company.
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