Nash Stuart: Securities Disclosure and Financial Advisers  Amendment Bill — First Reading 
Nash Stuart: Securities Disclosure and Financial Advisers  Amendment Bill — First Reading 
[Volume:652;Page:1560] 
STUART NASH (Labour) 
: 
 I rise to speak in support of the Securities Disclosure and Financial Advisers Amendment Bill for a number of reasons. First and foremost in these difficult economic times the ability of any company to raise capital in a timely manner is imperative in order to stimulate economic development and advance measures that will facilitate employment export revenue business growth and quite possibly business survival. 
Current securities legislation is in place to ensure that all who invest in New Zealand’s capital markets can invest their hard-earned money with confidence in the knowledge that any risk around negligence incompetence and—worse still—unlawful or misleading information is mitigated. Registered prospectuses are a very important part of the capital fundraising process. Not only do they allow the company to ensure that its business planning and financial analysis is sound robust and correct but they provide a legal document that allows any potential investor to fully investigate and undertake an analysis of any offering in a prudent and thoughtful way. 
As the Minister said the provision of relevant information in a timely manner is imperative. I would not in any way support any motion to do away with this investment tool. However in certain circumstances I fully support the recommendation of the Capital Market Development Taskforce—set up by the previous Labour Government with a mandate to identify key constraints and key opportunities for the development of the New Zealand financial system—to identify and debate options to improve the performance of New Zealand’s financial system and to develop a blueprint for the development of New Zealand’s financial system. That is very very important. 
I support any measure that provides security of process to the investing public and that protects New Zealand’s reputation as a safe place to invest whilst also ensuring that companies that seek to raise capital are still subject to the legal rigour and regulatory requirements needed to ensure a robust financial system and robust capital markets. New Zealand needs to be very sure that its regulations governing public and private capital market activity meet not only the international standards expected of New Zealand’s investors but also the criteria of global investors. 
Our stock exchange once had a reputation of being run by cowboys from the Wild West and that was alluded to by Mr Charles Chauvel. I say that having spoken to senior investment strategists and finance people who often travelled offshore to raise capital for New Zealand companies listed on the New Zealand stock exchange. Their anecdotes paint a picture of New Zealand as a place the vast majority of international investors would not touch with a bargepole. I am very pleased to report that now under the direction of the current chief executive and as a result of the regulations and legal environment created by the previous Labour Government our stock exchange has achieved an international reputation for transparency and good governance. We must ensure that that transparency good governance and robustness remain in place if we are to have any chance of developing our capital market—which at this point I think is acknowledged by all as being underdeveloped. 
I also support this bill because I understand that the ability to raise capital through traditional financial institutions like banks has suddenly become extremely difficult in the current economic climate. This situation is not likely to change in the short to medium term as the so-called credit crunch continues to limit the amount of capital available for institutional financing. I also understand that this bill may ensure the survival of certain companies when under current legislation that might not have been the case. Companies therefore do need another avenue or at least a simplified process to raise capital in a timely manner. The simplifying of the prospectus process is therefore welcome at a time when regulation must work to ease the regulatory burden—whilst maintaining the very important transparency we have all talked about—upon the business sector. 
Cost-effective access to capital is essential and important. There are investors who are feeling a little bit burnt under the current environment and we have talked about 43 finance companies that have gone under so I am encouraged that this bill arises out of extensive collaboration with those from both sides of the fence—investors even bankers company representatives and companies that are required to raise capital. I hope further recommendations in the report tabled by the Capital Market Development Taskforce set up by the last Labour Government will appear before this House in an effort to continue to stimulate the investment environment and ease the capital fundraising process thereby removing any real barrier to economic and business growth. 
In conclusion I pass on my congratulations to a previous speaker and former Minister of Commerce my colleague the Hon Lianne Dalziel for without her foresight effort and energy we would not be here debating this excellent legislation. Just to close I would also like to show my support for my colleague Charles Chauvel’s comments on loan sharks. They are truly social parasites in my humble opinion. Mr Chauvel’s member’s bill will be a welcome addition to the continual tidying up and timely revision of the mess that is this insidious industry. Thank you.