Ardern Jacinda: Securities Trustees and Statutory Supervisors Bill — In Committee 
Ardern Jacinda: Securities Trustees and Statutory Supervisors Bill — In Committee 
[Volume:671;Page:17717] 
JACINDA ARDERN (Labour) 
: 
 I congratulate you Mr Chair as it is the first time I have spoken since you have taken on this new role. I welcome you back to it. I am happy to repeat my congratulations at a time when the Minister in the chair the Minister of Commerce is not distracting you Mr Chair from the effusive praise that I am heaping upon you. I could say anything right now and it would not occur to either the Minister or you. I could be breaking every Standing Order in the book. At least now we know that there is a small fault in his ability to multitask. 
I will address Part 2 of the Securities Trustees and Statutory Supervisors Bill. I think it was important to spend a bit of time talking about Part 1 because it really sets out the general direction of the bill. I agree with the Commerce Committee’s inclusion of retirement villages under the general scope of this bill particularly given that in the purpose the importance of investor confidence has not changed. 
It seems particularly timely that we are talking about investor confidence in the current environment. I do not think we can underestimate the importance of trying to improve in New Zealand investor confidence generally. We have seen in our economy the wider impact that a limited view of mum and dad investors on where their money is considered safe or otherwise has led to quite a skewed investor market. People are more interested in investing in bricks and mortar as a consequence of several shocks that they have experienced over the past decade. It is important that confidence remains a primary purpose in legislation like this even though it is dealing with a very specific part of investor confidence. 
I will carry that matter through in my brief contribution today on Part 2 of the bill. Given that I am the first to address this part I will give just a very brief overview. Under this part the bill sets out the requirement to be licensed and to comply with a licence. It removes the automatic statutory approval for the six trustee corporations. It sets out that a trustee or statutory supervisor must hold a licence that covers a debt security or participatory security to which the appointment relates. A licence holder must comply with every condition imposed on that licence. It seems all relatively straightforward and a bit of a given but of course legislation must always be clear in this regard. It is an offence for a person to act as a trustee or statutory supervisor without an appropriate licence and for a person to represent that a person holds a licence that covers the security without their holding such a licence. 
It gets a little bit interesting in clauses 9 to 18 of Subpart 1 which are about decisions on applications for licences. This is where the bill empowers the Securities Commission to license persons to be trustees when it comes to debt securities statutory supervisors etc. This is also where the commission has the ability to license persons to be statutory supervisors of retirement villages. The bill sets out that the Financial Markets Authority will take over that role when it is up and running. 
Colleagues have already pointed out that we have a concern with the overlap that exists between this bill and other pieces of work in this area. Although we support this legislation it is our view that we should have considered it as a wider package of the ongoing reform of financial products. In Part 2 we see an example of where that is an issue: there will be a transition period to the Financial Markets Authority which is not yet established. I would have liked to see this regulation contextually debated rather than us talking about setting it out in provisions in Part 2 and then having to look at a transition period particularly when the Securities Act review is also not yet complete. It is disappointing that we cannot do it coherently as one wider debate. 
I think the issue with these provisions which the Commerce Committee has drawn out is that licences are issued for 5 years. The Commerce Committee recommended that this period be extended to 8 years to avoid uncertainty for issuers. Obviously uncertainty when we are dealing in markets like this is an issue. So if the Commerce Committee thought it was good to extend the period of licences why do we not hear that rationale in relation to the transitory period where the Financial Markets Authority will later take over responsibility?