Street Maryan: Financial Markets Conduct Bill — In CommitteeText is incorporated into the Bound VolumeStreet Maryan: Financial Markets Conduct Bill — In Committee[Sitting date: 27 August 2013. Volume:693;Page:12992. Text is incorporated into the Bound Volume.]Hon MARYAN STREET (Labour): I do not often rise to talk about bills such as this but I think this is a particularly significant bill the Financial Markets Conduct Bill and it is because of the human experience of some people I know that I am moved to speak on it.It certainly has been a long time in the making. It started clearly with LianneDalziel’s efforts as Minister of Commerce when she set up the Capital Market Development Taskforce in 2008. I think that was a significant move at that time because the purpose of it was to design a blueprint an action plan for the development of New Zealand’s financial system and we on this side of the House are pleased that the National Government has started to act on those recommendations. As one of my colleagues said earlier acting on the recommendations of the task force’s report is something of which we approve. One of those recommendations was a single market regulator and I might come back to that a little later. It seems to me that even with that work being done in 2008 and the task force being set up there was a great deal of consultation to do and a lot of people to talk to if this really were to be what it nowclaims to be and that is using the oft-used term a once-in-a-generation opportunity to get our financial markets right.In 2011 on 12 October of that year the Minister of Commerce at that time Simon Power introduced a large bill of some 560 pages which progressed the work that Lianne Dalziel had done and the task force had undertaken during those 3 years. Obviously Simon Power’s aims were the same as ours and those were to regulate and modernise our financial markets. But obviously there was more to do because there was a large three-part report that recommended that it be passed by Parliament’s Commerce Committee. What we have in front of us tonight is an additional Supplementary Order Paper 220 which Labour supports and which has now taken the bill out to nearly 700 pages.I want to focus on some of those things that are going to be of most importance to the people whom I know and I will draw on my experience in Nelson in particular for this. This is a substantial bill and before I begin to go into some of its effects I have acknowledged Lianne Dalziel I have acknowledged the Hon Simon Power and I would like to also acknowledge the Hon Craig Foss and the work he has done to bring this forward. As I say it has been a long time coming. I also want to pay tribute to officials who have engaged in what—although I have not been part of it—I understand has been a very substantial consultation process. All of that is required if we are going to regulate our financial markets in a way that makes them fair efficient and transparent. That is one of the purposes of this bill—to set up and regulate fair efficient and transparent financial markets. The bill has taken the financial markets from the ground up and rebuilt a framework that can regulate monitor and scrutinise the operation of our financial markets. It has been a back-to-basics reform and I think that it is overdue but none the less I welcome it for all that.We are all familiar with stories of people particularly retired people whose savings went up in smoke when various financial houses collapsed over the last few years. Those stories without exception have been tragic. One of the things that I consider to be a really important benefit of this bill is the effect it is going to have on what we commonly call ma and pa retail investors. They are ordinary regular New Zealanders who think that in their retirement in particular savings they have put away over a long period of time—over decades of a working life and perhaps after the sale of one large property and moving into a smaller property—will have released funding to them that they are now able to invest. Unscrupulous or incompetent finance houses have taken advantage of people who have seen much of their savings go up in smoke.One of the key changes that will make a difference to these people in the future is offer documents which are currently known as prospectuses and investment statements. What we will have is a product disclosure statement. The requirements are to simplify the product disclosure statement to a couple of pages that set out and explain the basics of what is on offer and what the risks are of investment and then to set out a whole lot of questions and those questions can be established in regulations. Those questions can be answered in clear concise and effective language. If people who have no particular skills in the operation of financial markets are to have any confidence that the remainder of their savings is not to go up in smoke this will be one of the devices that gives them confidence and starts to build that confidence that is required if New Zealand is going to deepen its wafer-thin domestic capital that is available particularly for new businesses that need investment.We have a prospect of new businesses developing particularly in clean technology. If our exciting inventors and their businesses can be accompanied by a clear regulated product disclosure statement then people who may wish to invest a small amount or a large amount of money will be able to do so with clarity and with certainty about whatthey are doing and the risks that are attached to their investment. They can proceed with some trust and confidence. This is the trouble now: there is very little confidence and trust in financial markets. We have seen some extraordinary cases come before the courts in recent times of people whom none of us would ever have dreamt would appear in the courts on charges relating to misconduct in financial markets. What we desperately need to do because of those events and because of the collapse of financial houses is to invest ironically some confidence back in the operation and most important the regulation of financial markets.So the fairness the efficiency and the transparency of financial markets comprise one of the two driving purposes of this bill. On our side of the House we are pleased that we started it and we are pleased that this Government is finishing it. I commend it to the Committee. Thanks.