Thursday 9th August 2007
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The wider programme being put through by Commerce Minister Lianne Dalziel is "very ambitious and has been conducted very well in terms of consultation" but the full programme won't be implemented until 2012.
The Bridgecorp collapse moves some into the "do it now" category, Weldon says.
Plans to implement compulsory credit ratings for finance companies, and prudential oversight of them by the Reserve Bank, should be implemented over the next year, he says.
"The second thing they should do is accelerate the disclosure requirements for financial advisers: in particular, the invisible incentives like Bridgecorp paying 3% to someone to sell their crap.
"It shouldn't be an Australian-style 30 page document which has so much stuff no-one reads it – it should just say what they are being paid to push that stuff."
The third area which should be looked at is requiring disclosure about the sound financial health of a company, not when it is listed on the NZX but whenever it seeks to raise money from retail investors.
"If that had been a requirement in the Bridgecorp case people would have been able to make up their own minds whether they were happy to put their money in at 9% or whether they would require a higher interest rate."
Commerce Minister Lianne Dalziel says that at this stage there are no plans to accelerate the process. A spokeswoman for the minister says the government does not want to get into knee-jerk reactions to crises.
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