Curran Clare: Financial Markets Conduct Bill — Second Reading 
Text is incorporated into the Bound Volume 
Curran Clare: Financial Markets Conduct Bill — Second Reading 
[Sitting date: 14 February 2013. Volume:687;Page:7887. Text is incorporated into the Bound Volume.] 
CLARE CURRAN (Labour—Dunedin South) 
: 
 I would like to speak to the second reading of this bill the Financial Markets Conduct Bill with pleasure. This bill is an example of a select committee in this House in this Parliament doing its job and ensuring that it is putting in place solid legislation. And believe me this piece of legislation is pretty solid. It would probably be one of the most solid pieces of legislation in physical terms that has passed through this House. I would like to know whether there is another bill that is bigger and if so how long it took to get through the select committee process. 
Before I go on I would like to acknowledge all of my colleagues across the House who sat on the Commerce Committee particularly those from the National Party my colleagues in the Labour Party who did the grunt work at the select committee and certainly the officials who did an extraordinary amount of work on this bill. I would like it noted that I do not say that about every piece of legislation that comes before this House that I have had some input into but I must say that there was an extraordinary amount of work that went into it. 
I think it is also important that we have a look at where this bill came from and what led to it. It may have taken a long time to get to this House—probably too long—but it did come from the work that was done by the previous Labour Government which set up that financial markets reform process. I will say that every time I speak on one of these bills in the House because that was the genesis of the work that has been done that has brought this bill before us today. The fact that it is not being supported by the Green Party I think is a great shame because no bill is perfect—no bill is perfect. Certainly there were things that probably could have been improved but it is a damn sight more of an improvement than what has been the case in this country for far too long. 
As my colleague David Cunliffe said earlier we must remain vigilant—we certainly must. If we do not pass this bill in this House hopefully in the next week or so what would we be doing to address the major issues that have led to those 61 financial companies collapsing in this country and the thousands and thousands of ordinary New Zealanders who have had their lives disrupted in such terrible ways? 
I will go back to that financial markets reform process that happened under the previous Labour Government. My colleague Lianne Dalziel set up the Capital Market Development Taskforce in 2008. That was 5 years ago. It is a long time for this bill to get to this point to develop that blueprint and action plan for the development of our financial system. Out of that even under a National Government in the last term of Parliament the Commerce Committee did an awful lot of work conducting an inquiry into those financial company collapses. We have seen these people these thousands of New Zealanders who have been so badly affected come before that select committee. We have seen the whites of their eyes and the tears in their eyes as they told us the effects that the collapses had had on them. 
One of the effects one of the things that I want to address that is in this bill is the criminal liability regime that has been put in place which is an enormous step forward. It may not have gone far enough. In fact we have argued that it has not gone far enough. My colleagues Lianne Dalziel and Charles Chauvel have recently said that people who are convicted of offences like burglary tend to be treated much more harshly than those who destroy huge amounts of wealth through reckless and dishonest business practices. Through this piece of legislation what we need to see is that the people who are behaving in such terrible ways the white-collar criminals who have been getting away with the practices that have led to these collapses no longer get away with them. We need to see not only those people being fined extensive amounts of money but also some people being taken before the court and sent to prison as a result of it. That will be the deterrent for these sorts of practices. 
Although this bill replaces a number of pieces of legislation including the Securities Act the Securities Markets Act the Unit Trusts Act the Superannuation Schemes Act and the non-tax part of the KiwiSaver Act—there is an enormous amount of detail in this bill—I want to talk about one particular part of it. It is around the liability regime the criminal liability where the key change in the bill is to make the offerers of products and the directors of companies criminally liable for inaccurate statements about products and disclosure documents. There has to be fairness in every piece of legislation. I think everybody would agree with that. Therefore in order to prove that the Crown would have to prove a guilty mind. But the fact is that—and this was an issue very dear to my heart in discussing this bill—one of the things that we heard from those people who came before us in the financial services collapse inquiry was that it was the people fronting these companies the people who went on television and vouched for these companies who were basically providing trust for people who were making these investments. The investors trusted these people because they were so-called respected members of our community they were celebrities. They were people who were promoting the companies and therefore getting the investments. I wanted to be reassured that those people would also be accountable—they would also be accountable. They may be making a large amount of money for getting before a TV camera for a television advertisement and saying: “This is a great company. You should invest your money in it.” and then they are able to get away with it if that company collapses. I wanted to be reassured that that would not be the case because it was that kind of advertisement that was leading people to make these investments. Well that is in this piece of legislation. It may not be immediately apparent to someone who is wading through it but it is in this piece of legislation. It is incumbent on people—celebrities former politicians or whoever gets up and takes money from these financial companies—that they should know that they are also liable should they make false promotional statements about the veracity of the information that they are providing to the public and about the brand that they develop for these companies. That is one of the critical aspects of this bill for me and that is because of the interface between the public—the mum and dad investors the ordinary people of New Zealand who are investing in these companies—the directors of these companies the people who should ultimately be held accountable and often the people who get up and use their name their celebrity status to actually promote them. 
There are many many other parts to this legislation and no doubt as we get through the Committee stage we will be able to get into the detail of it. About 13 main changes were made to this bill through the select committee. It is important that the public of New Zealand know that it exists because the other major issue is financial literacy and the fact that people also have a need to improve their financial literacy in order to understand what they are actually investing in. 
This side of the House certainly does support this bill. We know that it is not perfect but we think it is a very very important improvement on what has not been there before. We want to see the accountability in the courts for some of these practices. I commend this bill to the House.