Securities Markets Bill to boost investor confidence

Commerce Minister Lianne Dalziel said investors can have greater confidence in New Zealand's securities markets following the introduction of more effective laws under the Securities Markets and Institutions Bill which completed its passage through Parliament yesterday.

"I am delighted the Bill has now been passed, with an implementation date of December 1, 2002. This ties in with the recent announcement by the New Zealand Stock Exchange of their Restructuring Day of December 31, 2002," Lianne Dalziel said.

"The Order in Council gazetted today completes the picture by approving the Control Limit, the Rules Approval Order and a Restructuring Day Date Order which are required for the NZSE to demutualise.

"The Securities Markets and Institutions Bill will build confidence by increasing the effectiveness and efficiency of the law governing New Zealand's securities markets and regulatory institutions. It also brings New Zealand more in line with Australian practice."

Lianne Dalziel said the Bill was an important part of the government's wider securities law reform programme and would ensure that the regulatory environment governing New Zealand markets was efficient and effective.

"It provides an effective balancing of the rights of companies and investors, and reassures both international and domestic investors that the New Zealand market is a market of integrity that conforms with international best practice."

The legislation was passed with the support of United Future NZ, the Green Party, and NZ First.

The main points of the Bill are:

Establishment of an effective co-regulatory framework for securities markets, with exchanges as frontline regulators administering the market, and the Commission broadly overseeing the market;
Implementation of a continuous disclosure regime providing statutory backing for exchange listing rules;
Directors and officers of publicly listed companies are obliged to disclose securities dealings at the time they occur;
Establishment of ownership caps, rule approval and oversight of securities exchanges;
Exchanges are obliged to assist and inform the Securities Commission of known or suspected significant contraventions of the law and other matters;
The Securities Commission is given power of direction over exchanges;
The Securities Commission is established as a civil enforcement body for insider trading and continuous disclosure;
Amendment of provisions governing the operation of the Commission and Takeover Panel, including enlarging the Panel from eight to 11 members;
Implementation of a mechanism for mutual or unilateral recognition of overseas offering documents;
Increases in penalties under the Securities Act 1978 to bring them into line with other domestic and international business law penalties.

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