Govt sets up task force to look at adviser regulation

Rob Hosking

Thursday 26th August 2004

A six-member task force to study ways of regulating financial intermediaries is being set up by the government.

Commerce Minister Margaret Wilson says the membership of the task force will be confirmed in the next few weeks, but that it will include representatives from the financial services industries, consumer groups, and a neutral chair. It will also have its own policy �secretariat� from the Ministry of Economic Development.

The task force will cover share brokers, mortgage brokers, insurance brokers and financial advisers.

In a speech prepared for her but delivered by a ministry official on her behalf to Christchurch Financial Planners and Insurance Advisers Association, Wilson said the government expects to be able to take decisions on the task force�s recommendations by the middle of next year.

And the Securities Trading Law Reform Bill, which will extend the disclosure regime for investment advisers, will be introduced to the House by the end of this year, she said.

�What I am becoming increasingly aware of is the need for government to take a lead on this issue�As I have said, the Task Force is to include strong industry representation � we cannot consider this problem without a partnership with industry. But government must lead.�

Any changes would take account of the government�s overall policy of moving towards a single trans-Tasman marketplace but Wilson reiterated earlier reassurances that she does not intend to simply adopt the Australian rules.

�This government is committed to deepening New Zealand�s relationship with Australia� Now, that does not mean I want a New Zealand version of Australia�s Financial Services Reform Act � FSRA. Many of you have already told me you do not want that.

�But what it does mean is that a review of how we regulate financial advisers must take into account seriously the fact of the new Australian regime; it must look closely at what works about FSRA and what does not; it needs to consider whether it makes sense to adopt parts of the Australian regime here; and, in particular, if we want to take a different path to Australia, we have to examine what it is about the New Zealand market that makes us different.�

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