The Financial Regulator has moved to place new restrictions on the investment activities of credit unions under which their holdings of equities and corporate bonds will be limited.

In a guidance note issued last night, the regulator said credit unions would be subject to inspections to check their compliance with the new limits.

The regulator also said the new limits would apply to all credit unions except those "that can demonstrate to the Registrar of Credit Unions that they possess the skills and systems necessary to manage a more complex investment portfolio".

The regulator said the maturity date on Irish and euro zone state securities should not exceed 10 years and said no more than 30 per cent of a holding should be held in bonds maturing after seven years.

A holding of such bonds should not exceed 70 per cent of the total value of a credit union's investment portfolio, it said.

In relation to bank bond holdings, the regulator said the maturity date should not exceed 10 years and that no more than 30 per cent of bank bonds shall be held in bank bonds maturing after seven years.

"The institution shall have a long-term credit rating of not less than 'A' issued by a recognised rating agency.

"Investments in a single institution shall not exceed 25 per cent of the total value of the credit union's investment portfolio," it said.

The regulator added that holding in bank bonds "shall not exceed 70 per cent of the total value of the credit union's investment portfolio".