Mallard Trevor: Financial Markets Conduct Bill — In CommitteeText is incorporated into the Bound VolumeMallard Trevor: Financial Markets Conduct Bill — In Committee[Sitting date: 27 August 2013. Volume:693;Page:12997. Text is incorporated into the Bound Volume.]Hon TREVOR MALLARD (Labour—Hutt South): I want to make just a few brief comments on the Financial Markets Conduct Bill—really I have got just a couple of points to make. The first is—and again it is probably a generational sign—that I regret that we are in an age now where it is less easy to take people’s word than it used to be when I was younger when especially in the financial markets people’s words were bonds. I think that most members know I had some pretty extensive experience with a familysharebroking firm. For the vast majority of that time people’s deals which were worth probably hundreds of thousands of pounds or hundreds of thousands of dollars were done on someone’s word and there was not even a handshake—you know it was done down the phone. I think it was a different age. Unfortunately what we have seen over a period of time has been some changes where it is less easy to rely on people’s word and therefore there is a need for this sort of regulatory measure.The other point I would like to make is really in support of comments made earlier by my colleague David Parker and that is that I think we do need to keep looking towards opportunities for relatively easy capital raising within New Zealand. It is my view that there is quite a lot of interest in this. I am going to again go back just a decade or so and use the example of the old Industrial Research Ltd which is now part of Callaghan Innovation. In one of its earlier lives it made a scientific discovery to do with immunity. Because it was not given the money to develop the discovery or maybe it got too big for it it ended up selling the discovery off to an American farmer and a company calledBioCryst.A lot of the locals in the Hutt and particularly inWainuiōmata—because as many people knowWainuiōmata has one of the highest proportions of scientists and PhDs in the country—knew that this thing had a chance of being a seriously good investment because of the way that the sharemarket worked and the ability to invest relatively small amounts in the US market even a decade or so ago. A number of people—dozens of people sometimes forming clubs and sometimes just as individuals—were investingthrough a local company in this company which I think is calledBioCryst which was listed in the United States.What it showed to me was that there were people around who were actually prepared to save up their TAB money or save up their Lotto money accumulate a few hundred dollars and invest it in something that they thought had a real opportunity of making a difference. The point that I have made to my colleagues in the past and certainly to people involved in the development of this legislation—people like Simon Allen who was involved at the earlier stages—is that I think there is a place for much easier backing of Kiwi ideas than most of us give credit for. I think that there is a role through this sort of legislation for what is now described ascrowdfunding. Of course 5 or 6 years ago we had not heard that term but I think it is a good way of putting money together.The other point that I would make is that we also have to look to our institutions in New Zealand to keep on providing information to the market. I refer in particular to the Superannuation Fund and the ACC which do quite a lot of research into relatively small organisations. I think one of the faults that we have in our system is that a lot of people who could be investors—either as individuals or as syndicates or other groups or through other investment vehicles—do not get the information that is available within the system because somehow the Superannuation Fund or the ACC get scared that they might be considered investment advisers by publishing the information that they have collated. I think it is a question that we need to look at because my view is that markets could be better informed. We have got to make sure that that can happen.If that happens people like those inWainuiōmata who invested inBioCryst can in fact pick up the other good ideas that are developed in New Zealand. A lot of these ideas would of course have to go offshore because the funding involved just has to be massive. But my view is that the longer you can hold them and the bigger the proportion of New Zealand investment then the better off as a country we will be. We have seen it in Australia with their superannuation funds and the way that that works. They are a lot wealthier as a result of being able to do investment in their own country and now of course in our country and as a people they are much wealthier as a result. I think we are poorer as a result of not having a financial system that works in an adequate manner.The question was put that the amendments set out on Supplementary Order Paper 337 in the name of the Hon Craig Foss to the proposed amendments set out on Supplementary Order Paper 220 in his name be agreed to.Amendments agreed to.The question was put that the amendments as amended set out on Supplementary Order Paper 220 in the name of the Hon Craig Foss be agreed to.Amendments as amended agreed to.Parts 1 to 9 as amended schedules 1 to 5 as amended and clauses 1 and 2 as amended agreed to.The Committee divided the bill into the Financial Markets Conduct Bill and the Financial Markets (Repeals and Amendments) Bill pursuant to Supplementary Order Paper 338.Bill reported with amendment.Report adopted.