Lee Melissa: Third Readings — 
Text is incorporated into the Bound Volume 
Lee Melissa: Third Readings — 
[Sitting date: 17 November 2009. Volume:659;Page:7717. Text is incorporated into the Bound Volume.] 
MELISSA LEE (National) 
: 
 For a moment I thought I was in the wrong place. I thought I was here for the Settlement Systems Futures and Emissions Units Bill which in its new incarnation has been turned into the Reserve Bank of New Zealand Amendment Bill the Securities Markets Amendment Bill the Personal Property Securities Amendment Bill and the Securities Amendment Bill. The previous speaker David Parker was waxing lyrical about something completely different so I was a little bit lost for a minute. 
It is a great pleasure to take a very short call on this legislation because there is great support in this House. It is a complex set of bills but when one nuts it down one sees that it provides a way for trades in securities and other products to be cleared and settled through designated systems that meet the expectation of international and domestic participants in our financial sector. In this current economic climate where New Zealand relies very heavily on our trading relationships with our overseas partners it is crucial that New Zealand is aligned with international best practice. 
Previous speakers have spoken about everything else so I will move to some issues that were raised by the Commerce Committee and a couple of amendments that were proposed by the committee which are reflected in the legislation. One issue is the penalties relating to designated settlement systems. Two main issues were raised regarding penalties. The first issue relates to the many offences that exist under the new Part 5C of the Reserve Bank of New Zealand Act 1989. The second issue relates to the level and nature of penalties available to remedy these offences. There were 12 submissions to the select committee. We also had advice from the Ministry of Economic Development the Reserve Bank and the Securities Commission. Submissions suggested that fines and imprisonment were unnecessary and that the remedy should be limited to revocation of designation. But the power of revocation is extreme and a less severe option needs to be available to provide regulators with ways of ensuring compliance. The level and nature of penalties were also debated and it was recommended that although all penalties in the legislation should be retained the maximum penalty for bodies corporate should be reduced from $1 million to $750000 to align it or make it comparable with other jurisdictions. 
Another issue is in regard to insolvency and the finality of settlement. Although it is rare and unlikely to avoid potential problems in the event that a participant becomes insolvent during a settlement transaction the Commerce Committee recommends that finality protection should extend for 24 hours after the commencement of an insolvency regardless of when the contact person had notice. This would remove uncertainty over receipt of notice while maintaining a 24-hour window after the commencement of an insolvency event to complete any settlements that were already in progress. 
Finally I commend the work of the select committee which is led by the Hon Lianne Dalziel very very ably supported by Sam Lotu-Iiga and the rest of the members. I also welcome the new member who went AWOL for a little while Charles Chauvel. I commend this legislation to the House.