Huo Raymond: Securities Disclosure and Financial Advisers Amendment Bill — In Committee 
Huo Raymond: Securities Disclosure and Financial Advisers Amendment Bill — In Committee 
[Volume:655;Page:4986] 
RAYMOND HUO (Labour) 
: 
 Labour supports the Securities Disclosure and Financial Advisers Amendment Bill— 
Hon Members 
: Hurrah! 
RAYMOND HUO 
: Thank you for that. The bill is intended to make capital raising more efficient through reducing costs to issuers while ensuring that the level of information provided to potential investors is not reduced. 
The bill is in two parts. Part 1 amends the Securities Act 1978 and Part 2 the Financial Advisers Act 2008. After this Committee of the whole House stage the legislation will be divided into two separate bills: the Securities (Disclosure) Amendment Bill and the Financial Advisers Amendment Bill. The intended benefit of the reform is usefully summarised by Bell Gully: “The obvious advantage for listed issuers is to reduce the time and the cost of complying with the full (prospectus and investment statement) disclosure regime. The simplified disclosure prospectus would not seek to reduce the amount of information available to investors instead simply to reduce duplication. As a result relevant announcements and information made through the continuous disclosure regime will need to be referenced (incorporated by reference) in a simplified disclosure prospectus and made available to investors.” 
At the bill’s second reading I cited as an example of the simplified disclosure prospectus that an offer of fixed-rate bonds for Auckland International Airport Ltd—which was prepared for illustrative purposes—could be succinct enough to be limited to 25 pages compared with the 300-pages of the original investment statements and prospectus. That demonstrates the simplification that is possible through avoiding the duplication of material including material released under continuous disclosure. I thank officials for the great efforts they have put in. 
Part 2 amends the Financial Advisers Act 2008— 
The CHAIRPERSON (Lindsay Tisch) 
: No we are on Part 1. 
RAYMOND HUO 
: Part 1 yes. The Commerce Committee of which I am a proud member spent a considerable amount of time deliberating clauses in relation to exemptions. The Securities Act 1978 provides exemptions from standard disclosure requirements for certain investors who because of their experience knowledge wealth and existing relationship with the issuer are assumed not to require the standard level of protection the Act offers. The appropriateness of those exemptions will be reviewed in the current full review of the Securities Act which forms part of the Review of Financial Products and Providers. 
However Labour members of the Commerce Committee have concerns about the wealthy investor category. As the Hon Lianne Dalziel and my friend and colleague Charles Chauvel said earlier although we do not oppose the specific amendment we are concerned that changes are being made to the wealthy investor exemption when that exemption may be repealed as part of the review of the Securities Act. I note that in the relevant Review of Financial Products and Providers the discussion document described it as the “least principled of all the exemptions.” 
To conclude I say that this bill is designed to remove impediments to raising capital without undermining investor protection. Labour supports those proposals which are the outcome of recommendations made by the Capital Market Development Taskforce in November 2008. The Labour-led Government launched the task force to identify ways to improve access to capital. It is great to be able to support legislation that we began. I congratulate the Hon Simon Power on adopting this great initiative. Thank you.