Huo Raymond: Securities Disclosure and Financial Advisers  Amendment Bill — First Reading 
Huo Raymond: Securities Disclosure and Financial Advisers  Amendment Bill — First Reading 
[Volume:652;Page:1563] 
RAYMOND HUO (Labour) 
: 
 I rise to support the Securities Disclosure and Financial Advisers Amendment Bill in its first reading. The bill amends both the Securities Act 1978 and the Financial Advisers Act 2008. The explanatory note states that the bill “responds to the current international financial crisis by removing unnecessary impediments to capital raising while ensuring the timely disclosure of relevant information to prospective investors.” It also makes a number of minor tidying-up changes to the Financial Advisers Act. 
From the explanatory note it is clear that the bill will undoubtedly streamline the raising of capital for New Zealand businesses. Central to the bill’s key provisions is the objective of making it easier for businesses to raise capital by introducing a simplified disclosure prospectus regime into the Securities Act 1978 doing away with a lot of duplicated information for New Zealand stock exchange - listed issuers. At the same time the simplified disclosure prospectus aims to ensure that accurate and timely disclosure of information is made to prospective investors. The bill does not reduce the information required to be disclosed; it merely removes the duplication of information already provided pursuant to continuous disclosure obligations. It therefore removes unnecessary impediments to capital raising without undermining investor protection. 
This bill also tidies up the rules for exempt persons and people deemed by the Act not to be members of the public for the purposes of disclosure making it easier for all companies both listed and unlisted to raise capital. The Labour-led Government passed legislation in September last year to toughen up the rules of professional conduct and competence for financial advisers. This bill follows recommendations made by the Capital Market Development Taskforce in November 2008 for steps to respond to current financial conditions which are particularly relevant for listed issuers and also reflect recommendations made by the New Zealand Exchange. The Capital Market Development Taskforce should be applauded for the speed with which it has come up with a series of recommendations in November 2008 that address a number of impediments to capital raising particularly by listed issuers. The measures recommended are practical conceptually sound and will significantly reduce the barriers to capital raising by listed issuers. 
The Capital Market Development Taskforce was established in July 2008 and included members from the Government and the private sector. The objectives of the taskforce were to identify key constraints and opportunities for the development of New Zealand’s financial system identify and debate options to improve the performance of New Zealand’s financial system and develop a blueprint for the development of New Zealand’s financial system. Originally the task force had a year to produce its specific outputs but in response to the global financial situation it produced an interim report in November 2008. It outlined a package of proposals designed to boost access to capital for New Zealand businesses and reduce the cost of raising capital. As a commercial lawyer I recall that on 21 July 2008 both my fellow lawyers and our clients from the financial sector were excited at the news that the Capital Market Development Taskforce which was launched by the then Minister of Commerce the Hon Lianne Dalziel would see the Government and the private sector working together to develop New Zealand’s capital markets. The Hon Lianne Dalziel rightly stated at that time that improving the investment environment was a key part of the former Labour Government’s economic transformation strategy. The Hon Lianne Dalziel went on to say: “To deliver wealth and jobs New Zealand firms need ready access to affordable capital. The taskforce will identify ways to make this happen.” Now this has happened. 
I am delighted that the Government considered and adopted those recommendations by introducing this bill. It is worth reiterating that the Hon Lianne Dalziel in her speech this afternoon gave the regulatory impact statement 10 out of 10. To introduce legislation such as this bill is important particularly at this time when New Zealand along with the rest of the world is in the midst of a financial crisis. In large part the impact of the financial crisis on firms and households will depend on how we will respond. New Zealand will need to adopt a comprehensive package of measures if we are to minimise the costs of the downturn and speed the recovery. Ensuring that capital markets remain well functioning is an important part of that package. Thank you.