Dalziel Lianne: Securities Disclosure and Financial Advisers Amendment Bill — In Committee 
Dalziel Lianne: Securities Disclosure and Financial Advisers Amendment Bill — In Committee 
[Volume:655;Page:4988] 
Hon LIANNE DALZIEL (Labour—Christchurch East) 
: 
 I want to remind people what the Securities Act 1978 is about. It is investor protection legislation. It is not there to make it easy for business to raise capital; it is designed to protect investors. That is its function. I will set out for members opposite—because it is obvious that they have not been listening—why we agree with this particular amendment. But I also point out that anyone who stands in this Chamber and ignores the fact that the Act was designed in 1978 under a National Government to provide investor protection should remember that that is what the legislation is for. 
The premise underlying the Act is that the best protection for investors lies in full timely and accurate disclosure of information material to investment decisions. This allows investors to make informed decisions on the potential risks and rewards of their investment choices and to take responsibility for their own investment decisions. 
Let me make another point. Everyone who has spoken has talked about the recession. Everyone has spoken of it. Why did it happen? Can anyone remember what started the global financial crisis? Members on the other side of the Chamber want to ignore the fact that people were allowed to get away with dishonourable immoral and unethical conduct in the business world whereby they took money off investors knowing full well that their interests had not been disclosed and explained to those investors. They allowed investors to lose a considerable amount of money as a result. At the end of the day New Zealand was protected from the full impact of what happened internationally by banking regulations that were enforced and were not able to be opted out of with a sweetheart deal on insurance as was the case with AIG in America. 
I think people should remember that regulation in this area is absolutely vital to investor protection and to confidence in the markets. When that confidence goes look what happens! We have heard people talking about finance company failures in New Zealand. When one fell over it had an impact. When two fell over it had more of an impact. When three fell over the rest started to tumble. Investor confidence must be drawn back into our capital markets. That is one reason why we established a Capital Market Development Taskforce. 
Labour accepts this bill because it is a relatively small adjustment to the rules. It is a relatively small adjustment and we do not see any great risk associated with these particular amendments. They go nowhere as far as the Capital Market Development Taskforce wanted to go. These changes are very minor compared with what it asked for. But we are prepared to go with the bill because we have assessed it against the level of risk that people will be asked to take. I think this House is in danger of overstating the importance and impact of this particular legislation. 
The one matter I have an issue with and one that the Minister will not respond to relates to why we are adjusting the wealthy investor provision at all when in fact I hope it goes as a result of the fuller inquiry now being undertaken into the Securities Act with the review of securities offerings. We mentioned it in the report back from the Commerce Committee because it is stated to be the least principled of all the exemptions. Just because someone has a lot of money at a particular period of time does not mean he or she is no longer in need of protection in terms of full timely and accurate disclosure of information. 
It is really important that we get on with the major piece of work that is coming in terms of the review which is why I am disappointed that the Minister has not responded to the question about why we should bother amending the wealthy investor provision. I hope he will give us some guidance as to where the Government might be going with that particular review. I hope that matter is before the House in the not too distant future.