Swag of capital market policy reports due next month: Power

Wednesday 26th May 2010

Progress on the recommendations of the Capital Markets Development Taskforce is occurring, but a swag of reports due last month on a range of big issues for investors are now due next month.

In an update on CMDT recommendations, Commerce Minister Simon Power indicated public discussion documents, due last month, would be published in June and cover:

Simplified investment documents;
Warning labours on complex financial products;
Managed funds governance;
Sophisticated investor exemptions;
Role and ownership, including by NZX, of unregistered or exempt exchanges; and
Derivatives product definitions.

The Cabinet has Takeovers Act threshold changes under active consideration, and work to seek inclusion of New Zealand equities in the mandates of Australian fund managers is reported to be "on track".

Power's report card confirms the limited visible progress occurring on the creation by June 1 of new electricity market derivatives. The onus for implementation rests with the five main electricity generator-retailers, operating through a jointly-owned subsidiary, EnergyHedge.

EnergyHedge is attempting to implement a solution using the NZX platform for clearing and settlement, but an internal target launch date of May 24 has come and gone without a market update from either party.

"EnergyHedge is currently working with NZX to deliver the government's objectives," the taskforce reportback document says. "NZX is continuing to develop its derivatives exchange. As joint regulators, the Securities Commission and the Reserve Bank are working to approve the designation of NZX's clearing settlement system, which is a key piece of infrastructure underpinning the derivatives market."

NZX has in recent days moved the executive in charge of developing its derivatives market strategy, Fiona Mackenzie, to the head of markets position previously held by long-serving NZX staffer Geoff Brown, whose departure was announced last week.

With respect to the work occurring between NZX and the Reserve Bank of New Zealand on joint provision of clearance and settlement services, discussions are reported to be "ongoing."

In many other areas, progress is either occurring or the item has been signed off. In a few cases, such as the creation of a new website for publication of disclosure documents, the government has fast-tracked the initiative.

Businesswire.co.nz

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