Shanks Katrina: Securities Disclosure and Financial Advisers  Amendment Bill — First Reading 
Shanks Katrina: Securities Disclosure and Financial Advisers  Amendment Bill — First Reading 
[Volume:652;Page:1562] 
KATRINA SHANKS (National) 
: 
 It is my pleasure to stand here today and talk on the Securities Disclosure and Financial Advisers Amendment Bill. This bill has been needed for quite some time and particularly in the current environment when credit is very hard to get globally and in New Zealand. It is important that this bill comes into place now as it implements changes to simplify the process and reduce the cost of complying with existing securities legislation. 
This bill is based on the recommendations made by the Capital Market Development Taskforce. This task force produced a report at the end of last year and I will quote a couple of pieces of the report: “In large part the impact of the financial crisis on firms and households will depend on how we respond. … Ensuring that capital markets remain well functioning is an important part of that package. … The recommendations set out in Section II of this report concentrate on easing barriers to firms raising capital without undermining investor protection.” 
The last part I will read states: “In this case much of the material in a prospectus is costly duplication and a simpler offer document would contain the relevant information potential investors need without undermining their protections. Some of these proposals draw on practice in Australia so are not out of line with settings in other countries. 
The second principle is that in a number of cases the existing exemptions under which firms are able to issue securities without offer documents can be simplified and clarified. … Given the importance of ensuring that firms can access capital as efficiently as possible in the current economic environment we encourage the Government to consider implementing these recommendations by March 2009 where possible.” 
I found it very interesting when Charles Chauvel stated earlier that under a Labour-led Government this legislation would eventually have come into play near the end of this year anyway. We have to move quickly in the environment we are in if we are serious about getting our economy moving forward and about allowing capital and credit to be freed up in New Zealand. To have legislation like this coming in at the end of this year would not be timely enough. The quick introduction of this legislation shows how focused John Key is on delivering an environment for New Zealand where this country can prosper move forward and not be disadvantaged by red tape and bureaucracy. 
Lianne Dalziel gave 10 out of 10 to the Minister sitting in front of me Simon Power in terms of how good this legislation is. I stand here proudly as a National member of Parliament in support of this legislation at its first reading before it goes to the Commerce Committee. 
We have heard many speakers today talk about many things. We have heard them talk about finance companies loan sharks financial advisers and the securities sector. It was all interesting but the focus of the legislation is not on loan sharks; it is on how we can cut red tape and bureaucracy. What does the bill do? It reduces compliance costs to help New Zealand businesses focus on business rather than on reporting. It is absolutely important that we allow businesses to get on with business instead of having to file reports or prospectuses that are duplicating what has already been done. 
This bill is not about taking away information from investors or hiding things from them; it is about making sure that investors get what they need from a prospectus that they can clearly understand—in simple English. Where a securities company has more than one prospectus it does not have to repeat information over and over again. Exemptions are in place in this legislation as well. 
The provisions in the bill cover both stock market - listed and unlisted businesses which benefits all sectors that are lending money or raising security out there. The bill will free up capital for businesses. This means that there is going to be more capital available out there for businesses to help them get through the crisis we are in and it will also help growth and productivity moving forward. 
We have to remember that credit is not just for right now; there are many people who need credit for their working capital for their businesses. This is where many companies are struggling right now because they cannot get credit for their working capital. The bill not only frees up working capital but also frees up capital for those who are in a growth stage. Believe it or not some sectors out there are absolutely thriving and doing really well at the moment. Although many sectors are struggling some businesses are doing very very well. We have to ensure that they can grow in the economic environment we are in and allow them to be able to get capital more freely. This legislation is also focused on all those types of businesses. 
The bill is about issuing shares and the information that must be provided when shares and security are offered. Currently there are double-ups in the system when shares are provided for offer. The bill’s provisions aim to reduce inefficiencies in reporting processes by reducing that duplication leading to less time and money being taken up without losing information. In effect that sounds really really simple but this is legislation that we have not had in place to be able to allow companies to do that. 
It is really forward thinking in terms of the duplication and bureaucracy in this environment. It will help small medium and large sized enterprises to access capital and investors at all levels are going to be able to understand information more easily. Many investors come along pick up an investment prospectus and see that it is 100 pages long. Not many people can honestly say they read the full 100 pages. The bill will make it easier for those people to understand information but at the same time it will keep transparency there. People will be getting all the important information they need to make decisions when they invest money. 
Part of the Government’s response to the current economic climate will help to ease the credit crunch currently being experienced by all New Zealand businesses across all sectors. That is the good thing about this legislation: it is open to all businesses and all sectors. When we look at this legislation and at the regulatory impact statement we see that it clearly reflects what is in the task force report and what we are trying to achieve as a Government. 
I will read just a little bit. It states: “The world is currently in the midst of the worst financial crisis for many decades. The most immediate and pressing financial sector issue has been the breakdown in credit markets. The preferred option is to provide for a simplified disclosure prospectus that may be used by listed issuers who are subject to continuous disclosure requirements and to amend the existing definitions for exemptions from standard disclosure requirements. These changes should remove unnecessary impediments to capital raising while still securing the timely disclosure of relevant information to prospective investors.”  
That is what the bill is all about. It is about simplifying things for people who are trying to invest money and simplifying the process for those who are issuing money security or shares.  
It is with pleasure that I stand here today and recommend this bill to go to the select committee and we look forward to hearing all the submitters who come in and give their opinions on this bill and the way it stands. I look forward to it coming into the House for a second reading and to discussing it further. I thank the Minister Simon Power for getting this bill ready so quickly because having a bill put forward this quickly is quite incredible. It takes a lot of hard work and commitment to get a bill to this stage. I look forward to seeing it at the select committee.