Lee Melissa: Securities (Disclosure) Amendment Bill Financial Advisers Amendment Bill — Third Readings 
Lee Melissa: Securities (Disclosure) Amendment Bill Financial Advisers Amendment Bill — Third Readings 
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MELISSA LEE (National) 
: 
 I rise to speak in support of the third reading of the Securities (Disclosure) Amendment Bill and the Financial Advisers Amendment Bill. As members have already heard from previous speakers these bills will remove unnecessary impediments imposed on raising capital in New Zealand. Raising capital for business in these tough economic times has become more difficult and this legislation goes some way to assisting that situation. It does not mean we are just making things easier for businesses by removing regulatory compliance and putting investors in harm’s way as some people might like to think. We accept that there are inherent risks in investment and for some sophisticated investors the removal of some compliance issues does not pose greater risk but certainly assists a company in its endeavour to raise capital. 
On the point of investors the current economic climate has no doubt made crystal clear to companies the importance of looking after the interests of investors if they are to succeed as ongoing concerns and successful businesses. The Securities (Disclosure) Amendment Bill amends the Securities Act 1978 to provide an opportunity for an issuer of security to produce a simplified disclosure prospectus as members have heard from my colleague Jonathan Young. The number of pages will be less than a full disclosure. The issuers are already subject to the continuous disclosure requirements which I think are very helpful. The reason for the simplified disclosure prospectus is not to reduce the amount of information available to investors but to reduce duplication or multiplication between forms of disclosure. As a person who does not really have finance and security sector experience unlike some of my colleagues I like the fact that any relevant or new information is made through continuous disclosure and is freely available to me as an investor if I choose to look it up. As Mr Young said some of the disclosures can be up to 300 pages long. I doubt that most people would look at them but the information is there if people need it. 
As the chair of the Commerce Committee the Hon Lianne Dalziel mentioned one of the main issues the committee discussed was that of wealthy investors. I like to call them sophisticated investors because they are not just wealthy but may have experience in investing in numerous securities before. Those investors who have previously made investments of more than $500000 or more are presumed to be able to afford to take the risk and if they are in fact investing in the same entity then they do not necessarily require the full disclosure statement in the form of a full prospectus. Rather they may need only a simplified disclosure. That is easier for the company as it does not have that regulatory wall to get over. 
This legislation is in response to the report by the Capital Market Development Taskforce which was released in November of last year. The report focused primarily on increasing the availability of capital for New Zealand companies and reducing the cost of raising capital. I was present today at the select committee when the Banking Ombudsman Liz Brown spoke to us about the ING New Zealand - ANZ investment debacle which Lianne Dalziel started to discuss. No one disputed the sentiment of the chair of the select committee when she talked about people who invested a lot of money and lost a lot of money. We all feel for them. Certain things obviously went wrong and some rules and regulations are required to make sure that that does not happen in the future. Having said that New Zealand companies must be given the market conditions to raise capital and grow in this tough economic climate. As we have heard in previous debates this is the worst economic situation New Zealand has faced since the 1930s. We must support our businesses to be able to raise capital so they can get on with the job and provide jobs and opportunities for more people. 
It was a Labour member the Hon David Parker who said in the second reading debate I believe that this bill tries to grease the wheels of commerce. He also said that it tries to put in place improved rules so that it is possible for institutions and companies that need to raise capital to be able to do so while at the same time giving investors greater confidence to place their money in those investments. Although I do not often agree with the Labour members I have to agree with him. There are risks involved in investing; that is a given. Apart from the simplified disclosures there are also some aspects of the legislation that are brilliant. 
In regards to the Financial Advisers Amendment Bill the Commerce Committee made a recommendation that we need to ensure that we remedy the oversight in the Financial Service Providers (Registration and Dispute Resolution) Act as well. We had some really interesting discussions. We are trying to close some loopholes and provide better security and better confidence for the people in New Zealand who want to invest. In the section that amends the Financial Service Providers (Registration and Dispute Resolution) Act some financial advisers are now exempt from registration. We have heard many members speak in the House about this bill. It is about providing confidence to the market to raise capital. The increased risk in this time of recession means that this is a good bill and is supported by all parties. I do not have any more to say; I commend this legislation to the House.