Power's securities law overhaul attracts secret submissions

Wednesday 12th October 2011 1 Comment

A haul of 72 submissions, from a who’s who of the nation’s most powerful businesses, has been filed on fundamental reforms to decades-old securities legislation – four of them private.

The Financial Markets Conduct Bill was tabled in Parliament today as a final act by outgoing Commerce Minister Simon Power. The draft legislation received 72 submissions from various lobby groups, fund managers, investors, corporates and broking groups, though four notable names kept their thoughts private.

Submissions from lender Bank of New Zealand, oil company Shell Petroleum Mining, local oil and industry barons the Todd Family Office, and supermarket chain Foodstuffs Auckland weren’t published on the Ministry of Economic Development’s website, which released the views of other submitters earlier this week.

The legislative overhaul will cap off Power’s contribution to his commerce portfolio, which included the introduction of a super-regulator in the Financial Markets Authority, completing the licensing regime for financial advisers and introducing new checks for other industry players who were previously self-regulating such as auditors and trustees.

The main goal for the legislative overhaul was to improve financial market conduct and restore investor confidence, Power said.

The major legs of the 560-page bill will simplify disclosure requirements tailored for retail investors, introduce bigger fines for misleading investors, give the FMA stronger powers in banning directors, establish new licensing regimes and impose tougher rules on managed investment schemes.

“This bill seizes on a once-in-a generation opportunity to re-write our securities law – which has been subject to decades of ad hoc reform – in an integrated and coherent manner,” Power said in a statement.

“It will play a crucial role in restoring investor confidence by providing better information and protections for mum and dad investors, as well as setting clearer rules for companies looking to raise capital.

Power thanked the industry for its “constructive engagement” in the bill’s design.

Yesterday he announced he will head up Westpac Private Bank from January next year, having previously flagged his retirement in March. In his new role, Power will look after high net wealth households with an annual income in excess of $250,000 and assets at least worth $1 million.

BusinessDesk.co.nz

Comments from our readers

On 12 October 2011 at 5:17 pm Siena said:

Kiaora. I have been reading some of the submissions and for the life of me why those 4 who did not want their submissions published...Their CONDUCT is quite UNBECOMING. Transparency and accountability will also add to "restoring investor confidence" Why bother to submit, have these 4 got something to hide from us...Joe Public? Too many "mum and dad" investors and the like have been burnt needlessly by avarice shysters in suits and the more protection and stringent rules that are implemented the harder it will be for them to steal peoples' money! and keep their young floozy lovers' financially happy as well. Cabinet agreed in March 2011 to a new liability framework for securities law and it is well overdue... • Changes to the scope of securities law (i.e. the definition of security and the exemptions from the regime); • Changes to the disclosure regime for issuers of securities; • Changes to the regulation of managed investment schemes; and • Changes to a range of other matters, including the liability regime for securities law. We need an appropriate regulatory regime for securities exchanges,the liability regime for breaches of securities law,and the costing of variouslicensing regimes previously agreed in principle by Cabinet. Simon Power will be taking care of the the "high net wealth households" I am guessing its the wealthiest "151 individuals and families who now have a combined wealth of a whopping $45.2 billion" (NBR 2011 Rich List). There is also a need for a regulatory and operational environment that's conducive to wealth creation." however, 'Eliminating excessive regulation', 'easing constrictions' and 'freeing up the entrepreneurial spirit', though these are also regarded as essential to enabling wealth creation." they need to be monitored as many think its a portal to be used to engage in activities that are NOT in Good "spirits." as many investors have learnt the hard way.