Power Simon: Securities (Disclosure) Amendment Bill Financial Advisers Amendment Bill — Third Readings 
Power Simon: Securities (Disclosure) Amendment Bill Financial Advisers Amendment Bill — Third Readings 
[Volume:655;Page:5114] 
Hon SIMON POWER (Minister of Commerce) 
: 
 I move  
That the Securities (Disclosure) Amendment Bill and the Financial Advisers Amendment Bill be now read a third time 
. Both bills are part of the Government’s response to the interim report of the Capital Markets Development Taskforce and are designed to facilitate capital raising without prejudicing investor protection. 
The Securities (Disclosure) Amendment Bill provides for a simplified disclosure prospectus that may be used by listed issuers who are subject to continuous disclosure requirements. The offer may be for securities as long as the security being offered ranks equally or preferentially to the issuer’s existing listed securities. The detail and content of the simplified disclosure prospectus will be set out in regulations to be made under the existing regulation-making powers in the Securities Act 1978. Officials have been working on those in anticipation of these bills passing. 
Under the regulations a simplified disclosure prospectus will be able to be used only for securities that rank as I said equally or preferentially to the issuer’s listing securities. The Securities Commission will monitor and enforce compliance with the simplified disclosure prospectus regime once it is implemented. The commission will have the ability to prohibit an issuer from using this regime. The commission will also have the ability to extend the date of allotment under the simplified disclosure prospectus through a delayed allotment order. These orders could for example be made to give potential investors more time to consider new information prior to accepting the offer. 
The bill also makes changes relating to categories of persons who are exempt from the disclosure requirements for offers of securities under the Securities Act. These will assist both listed and unlisted companies and will particularly benefit private companies that tend to approach investors for capital directly often in cases where the investor is well known to the issuer. 
The proposed changes will firstly allow the offer of securities to be made at the same time to different categories of persons exempt from disclosure requirements without requiring the issuer to prepare a prospectus. Secondly they will allow incremental investments to be made by those who have invested half a million dollars in the issuer in the past 18 months without requiring the issuer to provide full disclosure requirements. 
Thirdly the changes will clarify that assets held on trust are counted for the purpose of applying the eligible person criteria meaning that they are eligible for disclosure exemptions. Fourthly they will allow certification that a person is wealthy and therefore is eligible for disclosure exemptions every 12 rather than 6 months. Lastly they will require a person who is experienced in investing money to acknowledge that as an experienced investor he or she will not receive disclosures typically required in relation to a public offering. 
These amendments do not introduce new classes of exempt investor; they simply make the existing classes more workable. I do not expect that any investors will be disadvantaged by the amendments and these changes will make it considerably simpler for businesses to raise capital by removing ambiguities or anomalies in the current law. There will of course always be debate over whether we have the exemptions in the Securities Act exactly right. There was a lot of discussion at the select committee and during the Committee stage and at the instigation of the Hon Lianne Dalziel and Charles Chauvel about the wealthy investor exemption in particular. The debate is about the validity of the assumption that if an investor is wealthy he or she will be able to make an informed investment decision without the aid of a disclosure regime because he or she will be able to afford financial advice. 
The wealthy investor exemption is relatively new. It was enacted in 2004 as part of the Business Law Reform Bill. The scope of all exemptions from the need to disclose will be a key issue in the current review of the Securities Act a matter that I know has been raised by the other side of the House. I am looking forward to working through these issues as part of that process. 
The Financial Advisers Amendment Bill makes minor amendments to the Financial Advisers Act to remedy errors that have come to light since the Act was passed last year to ensure the legislation works as intended. 
Charles Chauvel 
: Careless chairing of the select committee! 
Hon SIMON POWER 
: It has been a long day. 
To sum up the Securities (Disclosure) Amendment Bill’s primary aim is to enable firms to continue to have cost-effective access to capital whilst ensuring investors receive full accurate and timely disclosure of information. Both these aims are particularly important in these times and will continue to be a focus of this Government as we consider further regulatory challenges. 
I put on record my appreciation of the input from the Capital Market Development Taskforce and its ongoing input to the draft regulations that will be promulgated following the passage of this legislation. In addition I would like to thank officials for the work that has gone into drafting this important legislation. I also thank members of the Commerce Committee and the committee’s chair for their valued contribution to the development of this legislation. I commend these bills to the House.