Sharechat Logo

Calls to speed up regulation

-Rob Hosking

Thursday 9th August 2007

Text too small?
The government should speed up its plans to regulate finance companies and financial advisers in the wake of the Bridgecorp collapse, says NZX chief executive Mark Weldon.

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.

Sign up to the Weekly Wrap, a summary of the week's top news stories for financial advisers. Visit www.goodreturns.co.nz
  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Gold Report 16th July 2019
NZ dollar rises after CPI meets expectations; US dollar weakens
Yili's Westland takeover gets OIO approval
Govt eyes 2025 for farm-level emissions pricing
Govt won't "die in a ditch" for 100% renewable target
NZ 2Q CPI +0.6% on quarter, +1.7% on year
16th July 2019 Morning Report
Suspect company faces liquidation after director dies
NZ dollar holds gains; focus on domestic inflation data
MARKET CLOSE: NZ shares slip as fears over slowing Chinese growth weigh; AMP slumps

IRG See IRG research reports