Capital markets report a step in right direction

Media Release 16 December 2009
Capital markets report a step in right direction

The New Zealand Private Equity and Venture Capital Association is welcoming recommendations from the Capital Market Development Taskforce which aim at reducing the compliance burden for fund managers raising small funds.

Colin McKinnon, Executive Director of NZVCA, says the report contains a number of recommendations which are a step in the right direction, and is urging the government to implement them.

“The Taskforce recommends that the government continue its capital contributions to venture capital. Building the pipeline of high growth companies is vital to improving the performance of New Zealand’s capital markets. The government investment acts as a catalyst to private venture capital investment.

“Recommendations around clearer and broader exemptions to the Securities Act are also an important step for the private equity and venture capital sector. Investors in these sectors are highly informed and have the capacity to fully understand the risks and opportunities. The recommendations in the report would reduce the compliance costs for fund managers, expediting the task of raising funds.

“The industry is concerned however that the Taskforce has not picked up on some of our recommendations around tax. We support its recommendations concerning the removal of some of the tax biases which favour property and PIEs over more productive investment. We believe, however, that there is scope for targeted relief or exemptions for specific groups which supports productive investment and will add value to the New Zealand economy in the future. We hope the government will give the suggestions in the NZVCA Regulatory and Tax Recommendations further consideration.”

ENDS

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