THE Department of Enterprise and Employment inquiry into Taylor Asset Managers is thought to be the first such examination under the Investment Intermediaries Act. The act, which took effect on August 1st, 1995, aims to provide satisfactory safeguards for consumers and covers all those who give investment advice on a professional basis.

Under the law, regulation of the industry is a matter for the Minister for Enterprise and Employment, and the Central Bank.

The penalties for breaching the act's regulations can be severe. Fines of up to £1 million and 10 years imprisonment can be imposed.

Anyone who acts or holds themselves out as an investment business firm must receive authorisation from either the Central Bank or the Minister. Once authorised, firms are subject to scrutiny from the regulators on an on going basis.

The regulators also have extensive search and seizure powers through its authorised officers. The powers of the authorised officers include the right to:

. enter any premises where any investment business service has been carried out, or where documents relating to that business are located.

. secure any premises for later inspection.

. inspect and take copies or extracts of and documents or books, or subject to a warrant take such documents away for further examination

. require any person who carries on an investment business, or any person employed by such a business to give any information the officer may reasonably require.

A Department spokesman said yesterday that an authorised officer had been appointed under sections 64 and 65 of the act. These sections allow the Minister or the Governor of the Central Bank to appoint an authorised person to ensure that the requirements of the act are adhered to. The authorised officer has wide powers to seek information from anyone connected with the company.