Paperless transfer of shares
Irish company law requires Irish companies to maintain registers of shareholders and debenture holders. Transfers must be in a statutory form and stamp duty is payable. Technological development in general and the introduction of CREST in particular have resulted in the Companies Act 1990 (Uncertificated Securities) Regulations 1996 ('the Regulations').
The Regulations allow for the transfer of title to 'securities', defined as including shares, debentures and units in UCITS by a computer system run by an authorized person. No certificates are needed for securities dealt with in this way; indeed the issue of certificates for these securities is prohibited by the Regulations. Irish tax revenue is protected because the Regulations require that stamp duty will still be payable on the transactions even though no instrument of transfer will exist in paper form. The Regulations endeavour to overcome the evidential problems which arise with paperless transactions by giving special status to the computer records generated by the paperless transactions. Although the Regulations will only be relevant to a relatively small number of publicly-quoted Irish companies, they represent an interesting step on the road to a paperless society.
The Consumer Credit Act 1995
The Consumer Credit Act ('the Act') finally came into force on May 13 1996. It has far-reaching consequences for any borrower or lender. The director of Consumer Affairs has been given wide-ranging powers of supervision, investigation and enforcement. Previous restrictions on hire purchase transactions for business purposes are removed. Money-lending legislation is repealed and replaced with a new code.
The Act is limited to lending to or providing credit to 'consumers', defined as natural persons who are not acting in the course of a trade or profession. The definition is therefore less broad than that in the equivalent UK legislation. As well as implementing EU Directive 87/102/EEC (as amended by Directive 90/88/EEC), the Act goes further in its efforts to achieve its central goal of complete transparency on the part of lenders in their dealings with consumer borrowers.
The Act fails to avail of the de minimis provisions allowed for by the Directive and therefore represents a minefield for even the most trivial of credit transactions with a consumer. Failure to comply with the provisions of the Act may result in not just the relevant provision of a credit agreement being invalid but also in the loan being unenforceable. Detailed disclosures in relation to the cost of credit are required. The annualized percentage rate is the only interest rate which may be used in any documentation or advertisements. New licensing procedures now exist for mortgage intermediaries, credit intermediaries and money-lenders (which is given a very wide definition). Any entity which gives credit to a person in Ireland should now review its arrangements to ensure compliance with the new legislation. Its importance in the area of credit in Ireland cannot be over-emphasized.