Chauvel Charles: Securities Disclosure and Financial Advisers Amendment Bill — In Committee 
Chauvel Charles: Securities Disclosure and Financial Advisers Amendment Bill — In Committee 
[Volume:655;Page:4981] 
CHARLES CHAUVEL (Labour) 
: 
 It has been interesting to listen to the debate so far in this Committee stage on the Securities Disclosure and Financial Advisers Amendment Bill. Both the previous speaker Chris Tremain and Amy Adams spoke about the importance of broadening and deepening New Zealand’s capital markets and no one on this side of the Chamber would argue with that proposition. But it is fascinating to hear this bill being trumpeted as a contributor to that exercise; I would have thought that if anything this bill will make a relatively small contribution to it. 
If we were really serious about broadening and deepening capital markets in this country then we would encourage better savings as David Parker has just said. We would not have refused Kiwibank permission to get itself into a better equity permission which is what I understand Ministers have told the New Zealand Post board. We would not have decimated the New Zealand Superannuation Fund contributions in the way that the Government did in the Budget and frankly KiwiSaver contributions would not have been cut in half either. Those are the long-term paths to increasing savings in New Zealand and to broadening the sorts of capital markets that speakers have been referring to. The proof of the pudding in that of course is the Australian example. The superannuation investments that have been made there over the last 10 or 15 years since Paul Keating put in place the compulsory superannuation that Australia now has have really made a difference. They have created a huge pool of capital savings upon which businesses can draw for investment. 
It was interesting to hear Aaron Gilmore’s contribution and of course very entertaining. The problem with using TradeMe as an example is that I am not entirely sure that the provisions of this legislation would have applied to TradeMe. As I understand it that was a privately owned business until it was acquired by Fairfax so there would not have been a requirement for a prospectus at all when that business was started. But I may be wrong and if I am I bow to that member’s clearly superior intelligence and experience. 
Dealing with the substance of Part 1 the major amendments recommended by the Commerce Committee are to clauses 5 and 7. In respect of clause 5 the recommended amendment would allow subsequent offers after an initial subscription of $500000 to cover different types of security rather than limiting this to securities carrying identical rights privileges limitations and conditions to the initial securities. The recommendation from the select committee was that the bill should allow offers subsequent to an initial $500000 being made within 18 months of the first allotment rather than 12 months as was originally proposed in the legislation. That amendment appears in the bill as it is reported back and although as speakers on this side of the Chamber have indicated we do not regard this reform as particularly ambitious we are not opposed to that amendment. 
The select committee also came to the view that it was unnecessary to restrict the securities to those identical to the initial securities. If that premise was accepted limiting the securities to the original offer would needlessly restrict a company’s ability to use a range of investment vehicles to raise further capital from its initial investors. Following that logic there are amendments to clause 5 and again those amendments are supported by members on this side of the Chamber. 
Then there are the provisions on experienced investors the changes that are reflected in clause 7 and which are made in the bill. As I have said although Labour does not regard these changes as particularly ambitious we do not oppose them. We can see that they make sense. 
I hope that the Minister in the chair the Hon Simon Power will take a call and that we will hear from him in response to the questions that were posed by my friend and colleague Lianne Dalziel on the question of wealthy investors. It seems to me that there are some important unanswered questions on that topic and it would be good to hear from the Minister on them.