Thursday 17th March 2011 |
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Commerce Minister Simon Power has announced Cabinet's decisions on the comprehensive review of securities law.
"This is a once-in-a-generation opportunity to modernise our securities law and I'm determined to get it right," Power said.
He said ongoing input from both investors and the industry would be vital to ensure the changes made would last for the next 30 years.
"The new legislation will be better for mum and dad investors as well as for companies looking to raise capital. It will provide clearer, more consistent information for investors, and clarify for issuers the obligations they have to meet."
Together with the establishment of the Financial Markets Authority (FMA), the new securities law regime will largely complete the major regulatory reform programme in the financial sector.
The reform includes the financial adviser regime, auditor regulation, the licensing of trustees and statutory supervisors, the prudential regulation of the non-bank deposit regime, finance company moratorium requirements and the requirement for financial service providers to belong to a disputes resolution scheme.
Key policy decisions by Cabinet include moving to a more principles-based regulation of financial products, replacing the requirement for issuers to prepare a prospectus and investment statement with a requirement to prepare a single product disclosure statement tailored to retail investors, and creating a single collective investment regime in which schemes will have to comply with a common set of substantive requirements.
Other policy decisions outlined included making the most serious breaches of directors’ duties a criminal liability, giving the FMA power to issue 'no action' letters and a role promoting financial literacy.
Officials are to engage with the industry during the drafting process and the exposure draft of the new legislation is expected to be released later this year.
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