Wong Pansy: Securities Legislation Bill — In Committee 
Wong Pansy: Securities Legislation Bill — In Committee 
[Volume:634;Page:5465] 
PANSY WONG (National) 
: 
 National supports the Securities Legislation Bill and in the spirit of cooperation I hope the Minister in the chair the Hon Lianne Dalziel will consider accepting two of my amendments one to Part 1 and the other one to Part 2. My Part 1 amendment proposes to increase the authority for the Securities Commission to carry out functions so that the relationship and the role of both the Securities Commission and the stock exchange can be improved. 
During the financial review the Commerce Committee had an in-depth exchange with the Securities Commission. In September 2004 the Securities Commission completed an inquiry into the performance of the New Zealand Stock Exchange. The stock exchange declared in that year that Access Brokerage had defaulted under its participant rule and the exchange suspended it from trading. But it revealed a lot of confusion about the understanding of the front-line role of the stock exchange and whether it has a reporting function to the Securities Commission. 
Why did the joint monthly meeting not send an early detection warning that the compliance rules of the stock exchange or programme could have been improved? At the time we conducted our financial review we noted that the Securities Commission although it claimed that there is a working relationship between the two agencies seemed to be helpless in terms of getting the review programme completed. 
So my proposed amendment inserts new clause 3AA which would allow the Securities Commission “to keep under review the operation of the securities markets and to comment on those operations to the appropriate body or the Minister;”. That means that the Minister in the chair the Hon Lianne Dalziel could have an early warning sign from the Securities Commission if indeed that agency finds itself lacking in power or not able to take early action. 
I hope the Minister will look into that recommendation properly because the objective of the bill is supposedly to improve the confidence of investors in our capital markets so I think my proposal is going in the right direction. At the moment the Securities Commission and the securities stock exchange market are operating under a joint regulatory role. Although we agree that they can work in partnership one cannot help thinking that the Securities Commission is ultimately the agency that needs to know whether any breach is happening. Given the example of the way Australian authorities operate we believe we do not need to wait for another bill to be introduced into the Parliament. There is goodwill on both sides; we do want to increase investors’ confidence in the capital markets and I hope we could cooperate and support this amendment. 
I am pleased to see that the Minister seems to be discussing the issue with the officials. I am happy to accept further amendments but the spirit of this provision is to ensure that the Securities Commission does have that authority to review the operation of the securities market at all times and then comment on those operations and bring them to the attention of the Minister. We all know that a thriving capital market and securities market is indeed very important in order to ensure that investors have confidence. That would assist business to prosper. I am sure the stock exchange and the Securities Commission would welcome a proposal in that direction. So I am hoping the Minister will look kindly on this one.