Power Simon: Financial Service Providers (Registration and  Dispute Resolution) Bill — Second Reading In Committee 
Text is incorporated into the Bound Volume 
Power Simon: Financial Service Providers (Registration and  Dispute Resolution) Bill — Second Reading In Committee 
[Sitting date: 23 September 2008. Volume:650;Page:19020. Text is incorporated into the Bound Volume.] 
SIMON POWER (National—Rangitikei) 
: 
 I was minding my own business in my office when I got the call that the Financial Service Providers (Registration and Dispute Resolution) Bill would be proceeding a couple of days ahead of time. That means my evening has now been altered beyond recognition. Nevertheless that is a small price to pay for the continuation of this suite of legislation which is designed to deal effectively with what has happened. It was not the intention to do this when the review of financial products and providers was first undertaken but since that time a range of finance companies have collapsed tens of thousands—if not more—of New Zealanders have been affected by the collapse of those finance companies and mortgage trusts and literally billions of dollars have been put at risk as a result. 
I have to concede to the House and to the Minister of Commerce that my attention over the last 12 months has been very much on the Reserve Bank of New Zealand Amendment Bill (No 3) and the Financial Advisers Bill. It is really Craig Foss who is the expert on the Financial Service Providers (Registration and Dispute Resolution) Bill. I myself was involved with another committee for much of the time that this bill was before the Finance and Expenditure Committee. I was effectively drafted on to the committee to deal with other bills but I have to concede that this was not one of them. Having said that I can say that this bill falls within my area of responsibility and it is one of those bills that seeks to regulate the financial service providers in the same way that the Financial Advisers Bill does. I am sure that the Minister Lianne Dalziel is right when she says the two bills are joined at the hip as it were and that one cannot proceed effectively without the other. Therefore being the flexible party that we are here we stand ready to debate this legislation through all its stages—for the rest of the evening I imagine. 
This bill seeks to reinforce that suite of legislation that Doug Woolerton spoke about so eloquently during the day. It seeks to establish a registration system for those service providers. It requires—and that is an important word—them to join an approved industry-led dispute resolution scheme or what the legislation and the Minister describe as the reserve scheme. As the Minister alluded to we have already dealt with the Financial Advisers Bill and the Reserve Bank of New Zealand Amendment Bill (No 3) which dealt with the regulatory framework on— 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: You have 2 minutes. 
SIMON POWER 
: How can that be possible? I have just started. Madam Assistant Speaker are you sure that you did not start me at the end of the Minister’s time? 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: That is exactly what has happened. I duly apologise. 
SIMON POWER 
: The Minister Lianne Dalziel and I have got on well in recent months but this is getting ridiculous; I am not sharing a call with her! 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: I apologise to you profusely. 
SIMON POWER 
: There is an election coming up—we have to differentiate on some issues! There are some things that the Minister and I do not agree on and sharing calls in this House is probably one of them unless the Minister wants me to answer the questions—but there are no question times left so I cannot do that! 
Clauses 5 and 6 determine the application of the legislation that defines those activities considered to be financial services. I presume that that is consistent with the suite of definitions that were offered in the financial advisers legislation considered earlier today. Importantly clause 13 sets out the matters that disqualify a person from registering as a financial service provider and is amended to specify the types of offences that would count as fraudulent or dishonest. That is an important qualification because it sets the legislation up in a way that makes it clear that there are legislative parameters rather than codes of conduct or industry understandings that relate to the registration process. I think that that degree of statutory rigour is required in this industry given the recent events we have seen. 
We know that the bill covers things like the deregistration of financial service providers and indeed the reregistration of financial providers. The bill establishes the register itself and outlines access rights to that register. The dispute resolution regime and scheme is also outlined. Interestingly in the same way that the Commerce Amendment Bill did for decisions of the Commerce Commission on price setting any decision of the registrar that is subject to an appeal remains in force. That brings some clarity to the process and it provides some consistency with other legislation in this area that we have debated in recent days. The bill also sets out the number of schemes that are available for registration the public access to information and the rules of those schemes. It imposes duties to cooperate and to communicate in certain circumstances and of course it requires the appointment of a reserve scheme from an established recognised dispute resolution service. I imagine there are good reasons for that requirement. 
I believe that the House is unanimously supportive of the passage of this legislation—certainly I have not had any indication up to this point that any party present intends to vote against it. Any legislation that is put in place to add rigour to the financial advice industry should be welcomed but with the following rider—and it is the same qualification that I put forward in my third reading speech on the Financial Advisers Bill. 
People who choose to invest their money in New Zealand should not form the view from the passing of this legislation that no risk accrues to those investment decisions. Ultimately the Government has a role in providing a safer environment for investment by way of a sturdy transparent and accountable regulatory framework around those investment protocols. In the end Governments cannot be vicariously liable in many situations but they have a responsibility to provide mechanisms to people who wish to invest their moneys in order to ensure that those people are as safe as they possibly can be. 
I probably have 4 minutes left on my call— 
The ASSISTANT SPEAKER (Hon Marian Hobbs) 
: You have 2 minutes left. 
SIMON POWER 
: OK. I do not intend to labour this matter any further other than to say that Craig Foss will also be taking a call on this bill. He is as I said the expert from the Opposition side of the House on the technical aspects of this legislation. He will have some comprehensive views to share with the House on the matter of the registration and the reserve schemes as they relate to the provisions of the legislation dealing with the registration dispute resolution and appeal processes. I will certainly be hanging around to listen to that discussion. 
As we head into the Committee stage I suspect we will hear from a range of other members of Parliament on this side of the House. As I said during the debate on the Financial Advisers Bill we are in no way attempting to delay or slow up the passage of this legislation. In fact as I said endlessly during the debate on that bill the Opposition has worked cooperatively with the Government on this suite of legislation and will continue to do so—although in a slightly surprised way—throughout the remaining stages of this legislation which has come up a little earlier than we thought it would. 
On that basis I will resume my seat and say to the House that no doubt Doug Woolerton will have plenty to offer on this subject matter. As a permanent member of the Finance and Expenditure Committee—which I am not—he has taken some interest in this issue. I am sure that Lindsay Tisch although he is not on the select committee will make a contribution that is worth listening to. But it is really Craig Foss whom we are looking to on the more complex and technical matters contained in this bill. 
Hon Shane Jones 
: They want to hear from him in Flaxmere! 
SIMON POWER 
: That is the former chairperson of the Finance and Expenditure Committee yelling out from over there. Perhaps he would like to take a call and express a view on these matters. I am waiting with some interest for Mr Foss to cover the technical aspects of clause 10 particularly in respect of the provisions relating to the licensed service offence. National will support the Financial Service Providers (Registration and Dispute Resolution) Bill through its second reading.