Nash Stuart: Securities Trustees and Statutory Supervisors Bill — In Committee 
Nash Stuart: Securities Trustees and Statutory Supervisors Bill — In Committee 
[Volume:671;Page:17713] 
STUART NASH (Labour) 
: 
 I thank the Minister of Commerce for getting up and clarifying those issues. It is good to see the Hon Simon Power take a call on this bill because as we heard from Simon Bridges a while ago 40 percent of the legislation that has been put through by the National Government has been in the name of Mr Power. It will be sad to see a hard-working Minister leave and we all wonder why the Hon Simon Power has decided to leave. I suspect that he is sick and tired of carrying the rest of his colleagues. 
As the Minister mentioned it may be a little bit confusing for those people who have followed this bill. In the first reading debate we talked about the Securities Trustees and Statutory Supervisors Bill then we brought it together with the Financial Markets (Regulators and KiwiSaver) Bill so now in one speech we are talking about two quite large bills. As the Hon Simon Power said it is quite unusual to wrap two bills together. However we did that because the bills were quite similar in their intent. 
At the moment in the Committee stage we are talking about just the Securities Trustees and Statutory Supervisors Bill. I come back to Part 1 and I agree with something Mr Power said. As we know many many New Zealanders were rorted of their life-savings due to what I believe was negligence perhaps incompetence and I will not go any further than that—[ 
Interruption 
]—yes let us say negligence—on the part of a lot of the trustees or statutory supervisors managing the financial companies etc. What was needed to return confidence back to the market and to give New Zealanders confidence that they could come back to the market was legislation that would ensure that trustees and statutory supervisors could effectively perform the functions of trustees and statutory supervisors. 
Clause 3 sets out the purpose and states: “The purpose of this Act is to protect the interests of security holders and of residents of retirement villages”. That is most important and I say that because there is a very wide perception out there—and I am one who holds this perception—about the interests of security holders. I do not know much about residents of retirement villages but certainly the people who have come into my office and the people I liaise with who lost their life-savings had the perception that they were not well looked after by their statutory providers. I continue reading clause 3 which goes on to state: “and to enhance investor confidence in financial markets and retirement villages”. It then sets out three means for doing so: “by—(a) requiring persons who wish to be appointed as trustees or statutory supervisors to be capable of effectively performing the functions of trustees or statutory supervisors;”. 
It may seem that that is common sense. Of course we want the people who have been appointed as trustees or statutory supervisors to act in a competent manner but what happened was that they did not perform in a competent manner. They did not undertake their duties. I must say here that I do not want to stereotype every single trustee or statutory supervisor because no doubt there were some who did their work with diligence— 
Hon Simon Power 
: Very good ones. 
STUART NASH 
: Yes there were some very good ones so I do not mean to bring every single statutory supervisor or trustee into this. When I am maligning certain companies I think a lot of people know who or what I am talking about. A number of them have appeared before the courts a few of them have been sentenced and some have yet to come before the courts and hopefully be judged by a jury of their peers. What we need to do for every single New Zealander who has lost faith in our capital markets is ensure that confidence exists. 
There is risk every time people invest in any sort of investment and a prudent investor understands that risk and will manage that risk. That is why they get a rate of return over and above the risk-free rate of return. If we wanted no risk whatsoever we would invest in US Treasury bonds or something like that or put the money in Kiwibank—something with absolutely no risk. But there are organisations that pay an interest rate above the risk-free rate of return and the question then is about pricing risk. It is up to investors to understand that and manage it. One of the risks I believe they should not have to take into account is the risk of negligence or incompetence on the part of the statutory supervisors or the trustees. That is a risk that is never taken into account because it is incredibly difficult to quantify.