Lotu-Iiga Peseta Sam: Securities Trustees and Statutory Supervisors Bill — First Reading 
Lotu-Iiga Peseta Sam: Securities Trustees and Statutory Supervisors Bill — First Reading 
[Volume:661;Page:9717] 
PESETA SAM LOTU-IIGA (National—Maungakiekie) 
: 
 I rise to support the first reading of the Securities Trustees and Statutory Supervisors Bill 2010. I rise to support the Minister of Commerce for introducing this legislation to the House. It is important legislation as the previous speaker Lianne Dalziel alluded to. It is important legislation because the changes in it are part of the Government’s comprehensive reform agenda in the financial arena. It is part of its comprehensive reform agenda which looks at the work of financial advisers at moratoria regulation and at auditors. It is the Government’s action plan responding directly to the Capital Market Development Taskforce report. 
Sitting suspended from 6 p.m. to 7.30 p.m. 
PESETA SAM LOTU-IIGA 
: As I stated before the break I support the Securities Trustees and Statutory Supervisors Bill. It requires corporate trustees and statutory supervisors that supervise certain financial investments to be licensed. It allows the Securities Commission to oversee how trustees and statutory supervisors act in situations where investors’ interests may be at risk. This is particularly pertinent given the number of financial company collapses we have seen in the last few years. 
What does the bill do? Primarily it does three things. First it will require trustees and statutory supervisors to be capable; secondly it will require them to perform their functions effectively; and thirdly and last but not least it enables the Securities Commission as the regulatory body to hold them accountable for any failure to act according to the expected standards. 
The new regime applies to trustees of debt securities unit trustees and statutory supervisors of certain collective investment schemes and retirement villages. The reason retirement villages are included in this regime is the recognition that they play a similar role to the trustees of other investment products in monitoring the financial position of retirement villages. The new licensing regime will help to ensure that trustees and statutory supervisors are competent and the regime will fundamentally improve trustees’ performance. The Securities Commission of course will administer the new regime and grant licences to applicants and it will also receive mandatory reports from these licensed trustees and statutory supervisors. 
The commission under this new Act will have more powers to require information from trustees and to direct them to act in special or emergency situations. The commission will be able to seek pecuniary penalties and compensation orders where the trustees and statutory supervisors have breached their obligations under this statute. The bill also creates an offence of failing to comply with the commission’s directions so that there is some enforcement power when trustees fail to act. This includes maximum pecuniary penalties of between $100000 and $200000. It is an offence for a person to act as a trustee statutory supervisor or unit trustee without an appropriate licence and for a person to represent that he or she holds a licence that covers a security without holding such a licence. The penalties for such an offence will be a pecuniary amount not exceeding $300000. 
The bill sets out what the Securities Commission has to take into account in deciding whether to issue or vary a licence under the regime. Firstly some of the factors include—and the Minister has already raised some of these—the experience skills and qualifications of the applicant. In particular the commission will be looking at the skills of the directors and senior managers of a trustee organisation. Secondly it will take into account the financial resources available to the applicant as well as other resources which may be non-financial that are available to that applicant. That is particularly important in order to see the type of credibility the type of support and the type of resources that will support the trustee organisation during its operation. 
The commission’s new power to oversee how trustees and statutory supervisors act in certain situations is one of the fundamental changes in this bill. The fact that the bill gives the commission the power to monitor the actions of trustees should provide an added level of protection for investors. This is one of the fundamental changes. It is particularly important because it should allow the commission to direct trustees or directly intervene if trustees are not taking adequate steps or urgent action as is required. Those are the basic tenets of the bill. I support the bill and look forward to the select committee where we will be discussing its particular provisions. Thank you.