THE detailed scrutiny of brokers, envisaged under the Investment Intermediaries Act, has not been fully implemented. And the Department of Enterprise and Employment has not itself authorised any brokers under the legislation, The Irish Times has learned.

The stringent authorisation and policing of investment brokers, which was seen as one of the key elements of the act, has not yet been implemented in full, over a year after the legislation passed into law.

Under the Act investment brokers can either be authorised by the Department or the Central Bank, or by recognition from so called product producers, such as fund managers, whose products they sell. Membership of the IBA is used by many of these producers as evidence that the broker complies with the act and the organisation is an approved self regulator under the act.

A spokesman for the Department of Enterprise and Employment confirmed yesterday that it had not issued any authorisation certificates since the Act.

The Department has received about 70 inquires relating to authorisation before the cut off date of last November.

According to the spokesman, not all of the 70 firms which have contacted the department would require authorisation from the department, as some companies would come under the remit of the Central Bank. Some companies may not require formal authorisation. Other firms may be members of the IBA, which is an approved self regulatory representative body under the Act, he added.

However The Irish Times has learned that the IBA has not undertaken the procedure envisaged in the act to vet its members' suitability to operate investment intermediaries under the new act.

The IBA was appointed as a approved representative body with such powers last November. However the association's usual member compliance procedures took place one month earlier in October and did not relate to the Act.

An IBA spokesman last night that no authorisation of investment intermediaries under the act "had been possible because of the timing of the implementation of the act".

He also confirmed that, as yet, no agreement has been reached between the various supervisory authorities regarding the annual authorisation or on going checking procedures.

But the IBA spokesman stressed that all its members had met the association's existing compliance procedures which relate in part to the 1989 Insurance Act. These include the dodging of a compensation bond for at least £50,000, and a solvency certificate from a company's auditors.

Commenting on the lack of the situation, the Fianna Fail Enterprise and Employment spokesperson, Mrs Mary O'Rourke, said that while in general governments "are great at implementing legislation, we're not so good at the follow through".