Lee Melissa: Questions for Oral Answer — Questions to Ministers 
Lee Melissa: Questions for Oral Answer — Questions to Ministers 
[Volume:656;Page:5888] 
9.  
MELISSA LEE (National) 
 to the  
Minister of Commerce 
: What changes is the Government proposing to the oversight of finance companies? 
Hon SIMON POWER (Minister of Commerce) 
: 
 This morning I announced a number of changes to improve the regulatory oversight of finance companies. One of those changes will be to require debt issuers including finance companies that propose to go into moratoria in order to avoid receivership to produce clear and concise investment statements that disclose the details and merits of a moratorium proposal. They will also need to disclose the basis on which the relevant directors and trustees are recommending the proposal and any other relevant information. The aim is to ensure that investors are provided with information in a way that is transparent and easy to understand to enable them to make the appropriate decisions for their individual circumstances. 
Melissa Lee 
: Are there any plans to improve the oversight of corporate trustees and their relationship with finance companies? 
Hon SIMON POWER 
: Yes. The collapse of a large number of finance companies in recent years has raised some fundamental issues around the role of corporate trustees and in particular the competence and accountability of some of those trustees. Today I announced a package of measures designed to improve the quality of trustees’ supervision of issuers including a licensing regime to be overseen by the Securities Commission. Trustees will be required to meet a series of stringent criteria such as appropriate infrastructure monitoring systems processes and financial strength. The commission will also have an ongoing role in monitoring trustees and that role will include the power to prosecute trustees direct trustees to take action to protect investors strengthen trust deeds and require mandatory reporting to the commission when issuers may be nearing default. I can advise the House that I hope to bring legislation on this issue to the House by the end of the year. 
Hon Lianne Dalziel 
: Will the proposed moratorium regulations require investors to be given an honest assessment of both the benefits and the risks of the moratorium proposal as against receivership; if so who will provide this information in light of the experience of certain companies overplaying the former to the personal benefit of directors and underplaying the latter to the detriment of investors? 
Hon SIMON POWER 
: That is the intention. 
Melissa Lee 
: What other initiatives are being undertaken to improve oversight of the financial sector? 
Hon SIMON POWER 
: The Government is also undertaking a review of the Securities Act. The Act is now over 30 years old. The review will focus on ensuring firstly that investors receive relevant and timely information; secondly that the rules around managed funds are clear and consistent; thirdly that the regulatory bodies have the right roles the right functions and the right powers to enforce securities law and monitor issuers; and fourthly that the scope and objectives of securities law are clearly stated. I intend to release a discussion document that canvasses these issues by the end of the year.