White HelenHELEN WHITE (Labour): Again this is a very interesting process to enter at a late stage because one of the advantages we do have as new MPs is looking at the whole and actually admiring it. It's a very very good piece of legislation which is going to fill a vacuum that should have really been filled quite some time ago. We have here a separate piece of legislation that's focused on regulation of an area where there is great vulnerability. We've been given an example of something like EFTPOS which is just a nuts and bolts thing we all take for granted and if it actually breaks we are in real trouble. Here we are actually fixing it by a piece of very thoughtful legislation that is quite nuanced and quite directive in terms of where it focuses. So I want to actually have a look at the object section and focus on something other than what is a very important part of it which is this introduction of the focus on stability and public confidence because there are some other parts of those objectives that I think are well worth mentioning. This legislation will promote and facilitate the development of fair efficient transparent financial markets and that's something that we really did need to see before the GFC. That kind of transparency is so important to actually informing our consumers it's just absolutely vital in an area where many of us are struggling to even understand a derivative. So it's extremely important that we have put in place a regime that starts to see those things as what they are and actually the vulnerabilities people have and regulate accordingly. So the Act actually goes on in its object section to say one of the purposes will be achieved by establishing a system for designating systemically important FMIs" and that's the matter that is really about the nuance not focusing on the FMIs that won't be that important but focusing on the ones that would actually impact on our stability and our public confidence if they were in collapse. Those ones get a great deal more treatment than they ever have and they come into a system which used to be one where people would opt in or entities would opt in. Now it's going to become one where there is a proactive identification of those kinds of bodies that might affect us. And so it really is a very powerful thing to start to look and actually not be the ambulance at the bottom of a cliff when things collapse but insist that those organisations join a system which actually regulates them in an appropriate way. What it will do is it will make sure that the rules in place in those organisations are robust and it will actually make sure that the information provided is tested. So one of the things that the Act does is it allows that information to be challenged if it's wrong. It has a penalty system in fact if there is misleading going on. It is a system which has a very interesting feature of a joint ministry overseeing it and so we have both the Minister of Finance and the Minister of Commerce and Consumer Affairs involved. That's a really interesting development to have two entities—which really have such an interesting relationship—talking to each other and jointly being involved in administering this. There is this relationship carried on at the regulatory level where we've got the Reserve Bank of New Zealand and the Financial Markets Authority (FMA) having a relationship and albeit that one might make that decision there is a cooperativeness which I think is really important because if you have a silo on such things you might well get a different result from the kind of communication and the experience of both. So this is a really interesting feature of the legislation. I take the point that this is really about identifying risk and it's about making sure that we're focusing on the things that could really go wrong. There's a very interesting explanation of what is systemically important what FMIs really do need to be watched and managed more carefully at clause 28. It talks about those systemically important FMIs being the ones where the "disruption to activities under the FMI could [actually] cause problems" for others and it could "threaten the stability of or confidence in the whole or a significant part of the financial system." So it's very much focusing on things that could hurt everyday New Zealanders.Finally I wanted to talk a little bit about the contingency plans that appear in clause 48 of this Act because they are very interesting. They're really about again proactivity. They're about FMIs actually coming up with their own contingency plan in the first instance and being expected to assert what to do when things go wrong. So there is this layer of actually building in a maturity in those systems which means that those involved in them are really thinking ahead and thinking about how to manage those crises in the first instance. If all else fails the State isn't walking away from its responsibility because it's also recognising that these things are a big deal for New Zealanders and they're big enough that we might move away from our usual roles in this situation and go to statutory management if we need to. So there's a real safety net in this legislation too which I admire.I think the last thing that I would like to talk about is the sanctions in this Act and that really is an interesting part of the Act because the sanctions are very real. There are quite large amounts of money that will be passed into the State if in fact people are not complying with their obligations under this Act. One of the things that will go on is that there will be a check on misleading information—so those information powers will have teeth—and another is that the regulations do allow even for directors to be responsible where that is appropriate. So directors who should know better and have had the information in front of them will be held accountable which is something that we're starting to see more and more of happen and is a really good check and balance in our system.I commend this bill to the House.Motion agreed to.Bill read a second time."