On 28 August, Commerce Minister Craig Foss welcomed the passage of major law reform aimed at improving financial market conduct and restoring investor confidence in New Zealand's financial markets.

The Financial Markets Conduct Bill rewrites many of the rules for how financial products and financial services are offered to the public and how they are governed and operated. It replaces several Acts, including the Securities Act, the Securities Markets Act, the Unit Trusts Act, the Superannuation Schemes Act, and the non-tax parts of the KiwiSaver Act.

Key changes in the Bill, as summarised on the Government website, include:
•    a new requirement for issuers to prepare a single product disclosure statement tailored to retail investors;
•    two new online public registers that will  make offer documents and information much more accessible to investors, their advisers, market analysts, and commentators;
•    a new system of escalating penalties: from infringement notices for minor breaches through to penalties of up to $1 million for individuals, $5 million for companies and criminal penalties of up to 10 years' prison for the worst conduct;
•    new licensing regimes for specific financial services providers including fund managers, independent trustees of workplace superannuation schemes, discretionary investment management services and derivatives issuers;
•    new forms of capital-raising, such as peer-to-peer lending and crowd-funding;
•    new duties on fund managers and supervisors and stronger governance requirements;
•    a new system to regulate securities exchanges such as the stock market, including allowing for new low cost exchanges to make capital-raising easier and cheaper.

For more information, click here.

Having passed its third reading we will be following further progress closely.

Written by Kylie van Heerden at 09:00




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