Adams Amy: Securities Disclosure and Financial Advisers Amendment Bill — In Committee 
Adams Amy: Securities Disclosure and Financial Advisers Amendment Bill — In Committee 
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AMY ADAMS (National—Selwyn) 
: 
 I also am delighted to take a call in the Committee stage of the Securities Disclosure and Financial Advisers Amendment Bill. In looking back to the first reading debate I think that the points raised there were absolutely correct. They focused in large part on the absolutely fundamental importance in a climate like we have in front of us of access to capital. Businesses in this environment more than in any other will be fairly clear on the point that the ability to access capital is one of the key criteria that will determine the success or failure of many a business over difficult times. Issues around liquidity and cash-flow management are absolutely essential to that debate. 
Like many of the issues we have been discussing this is the journey of a thousand miles. We cannot fix it with one simple piece of legislation that will make all the ills of the world—all the capital and liquidity issues—drop from in front of us. We have to take a number of small steps and this bill is certainly one of those steps. 
As the Minister of Commerce has already told us in his opening remarks tonight this bill will simplify capital raising by identifying where information is already in front of markets and in front of the prudent investor and removing the need for those companies in particular companies that are listed on the stock exchange to have to jump through hurdles and reproduce re-present and re-disseminate that same information. That sounds very sensible and very clear-cut but of course the difficulty and the challenge for a Government in doing that is to ensure that the change does not go beyond removing duplication to in any way undermine investor confidence in the markets. That must be ensured. 
Equally however if areas can be identified where there is simply unnecessary duplication and that duplication not only is putting cost on business but is delaying their ability to access funds and is making those funds harder and harder to access then it is absolutely our duty and our responsibility to say that we will not have bureaucracy for the sake of bureaucracy. There is no point in keeping bureaucrats busy with busywork. If those requirements will not add to investors’ protection in the market then there is no need to have them. Under this bill we have the ability to exempt certain businesses from providing information that is already provided where that information can be shown to already be in front of the market. Those who offer certain debt and equity instruments will be able to take advantage of that simplified disclosure regime for their prospectuses. 
Having worked with the Securities Commission on behalf of clients for many years I am well aware what a prudent and effective watchdog of investor rights it is. I think it is worth pointing out and putting on record that that scrutiny and those protections that already exist within the Securities Act are very much maintained and that the changes here although they will make it easier for business are not doing so at the expense of the investing public. I think that point is worth making. 
The other part of the bill that I particularly want to talk about in this part of the Committee stage is the changes to section 3(2) of the principal Act inserted by clause 5. This clause inserts a further category of exempt persons clarifying the law around exempt persons and effectively says that investors who have already invested $500000 in substantially similar securities can be regarded as having more awareness more competency and more involvement with and oversight of the activities of that company. They are not in the same category as a mum and dad who saw an ad in the paper and thought they would sign up for a couple of thousand shares because the guy down the road thought it was a very good idea. Investors in this category have identified themselves by that sort of large investment as investors of a certain level of skill and experience and as regular habitual investors. The bill creates this additional safe harbour category. I think that is important because in many situations business partners who are very experienced and very careful and who are used to doing these sorts of transactions are being forced to jump through a whole series of hoops that they neither want or need. Again it is about getting the balance right so that we allow people who know what they are doing who have proven their experience in that field to get on and do it. 
This is about information that is already available. The information is already out there for investors. We are simply saying once more that here is an area where the Capital Market Development Taskforce has identified some unnecessary red tape and unnecessary bureaucracy and we as a Government in our push to make business easier in troubled times and to get this economy growing will address that.