Adams Amy: Securities Disclosure and Financial Advisers  Amendment Bill — First Reading 
Adams Amy: Securities Disclosure and Financial Advisers  Amendment Bill — First Reading 
[Volume:652;Page:1565] 
AMY ADAMS (National—Selwyn) 
: 
 I am pleased to rise this afternoon and add my voice in support of the Securities Disclosure and Financial Advisers Amendment Bill. As we have already heard today this bill aims to respond to the current troubled financial climate by removing the unnecessary barriers to capital-raising that exist currently. At the same time the bill seeks to ensure that relevant information is disclosed in a timely manner to prospective investors. In essence what the bill does is provide for a simplified disclosure prospectus allowing certain debt and equity instruments to be issued without the need to duplicate already disclosed information. 
As we have also heard this afternoon the bill arose from the recommendations of the Capital Market Development Taskforce after it completed in November last year its very considered analysis of the technical rules that surround this complex area of law. The point to remember is that the provisions of this bill will make it easier for applicable businesses to raise capital while protecting the timely and accurate disclosure of information to those considering investing. 
The Securities Disclosure and Financial Advisers Amendment Bill will do away with a lot of unnecessary duplication notably for companies listed on the stock exchange and in doing so it will reduce compliance time and costs. In that regard it is one more example of this Government putting getting business done ahead of the value of bureaucracy for bureaucracy’s sake. This Government understands that New Zealand must support the productive commercial sector if we are to navigate our way through the current international crisis and do so with the minimum amount of impact on ordinary New Zealanders. We all know that unfortunately there is nothing we can do to prevent the hard times ahead but we can take steps to soften the hard edges of that crisis and to put New Zealand in a good position for a strong recovery when the time comes. This bill is part of achieving that aim. 
In addition to addressing issues of duplication as we have already heard from the Minister of Commerce the Hon Simon Power the bill also usefully clarifies the law around the category of persons who are exempt from the securities disclosure regimes by adding a further category of exempt persons and it does so through an amendment to section 3(2)(a)(iia) of the Securities Act. Notably this will remove from these strict disclosure regimes only people who already possess all the necessary information or who are very experienced in the business of investing. What it does in this regard in effect is create further safe harbour provisions for those who have already made an investment of $500000 or more in identical securities within the past 12 months. 
We will not of course accept any changes that would undermine investor confidence in the securities market—and now more so than ever—but where unnecessary red tape compliance and double-ups have been identified it is the duty of any prudent Government to remove those unjustified hurdles in favour of a capital market in which businesses can raise funds more easily. 
Although this bill falls outside the National-led Government’s 100-day plan of action it is none the less part of what we are doing to help New Zealand through the economic downturn. It should also be remembered that the existing safeguards within the Securities Act are maintained that a full and complete disclosure of the risks that come with the investment remains compulsory and that in addition the extensive penalties continue to apply. From my experience within this area of law I know that the Securities Commission in conjunction with the Companies Office acts as a particularly vigorous watchdog in this regard. 
In difficult financial times access to capital is fundamental. The importance of this fact is coming into sharp focus for many New Zealand businesses right now. Many businesses that are otherwise strong and should not by reason of any inherent problems fall victim to the worldwide financial crisis may well still fail simply due to issues relating to their ability to access capital. Keeping capital flowing through business communities is vital now more than ever. This bill is a step towards doing this and it is before this House as part of a number of matters including non-legislative matters that are being looked at. 
The Taxation (Business Tax Measures) Bill which we saw previously in the House focused on small to medium sized businesses. The bill before the House now is more relevant to the listed issuers so it is looking at a different sector of our productive economy. But I would also touch on the fact that it will be very relevant to start-up businesses angel investors and those going through initial public offerings. Let us remember that if we want to bring growth and productivity back into the economy then it is important that we support those businesses and not just those that already have a place on our stock exchange and this bill will be a part of doing that. 
Even in these tough times I find it very interesting that several businesses in my electorate of Selwyn have tremendous expansion opportunities ahead of them and when we consider the economic climate in which they are operating that is quite a feat. Some of them have the potential to double their existing operation. The markets are there the willingness is there but the one thing between them and achieving that growth is capital. 
This bill by removing some of the barriers and some of the duplication and excessive cost will help to create that growth and more important it will help to create and keep jobs in our economy—which is the one thing that I think this House agrees is crucial at this time. But it can do that only with capital and that is worth remembering. Freeing up capital markets is therefore a very important part of keeping the growth in the economy. 
The Capital Market Development Taskforce has identified some ways we can assist in that process. Therefore I am very pleased to support this bill. On that point I will just take a moment to agree with the previous speaker Raymond Huo. As a lawyer who has worked in this area of law I agree that the people who practise in this area support these measures. They have been calling out for them. They were very pleased to see the task force brought about and they will be equally pleased to see the measures given effect to. 
I think we can summarise the effect and the importance of the bill by taking a moment to reflect on the first paragraph of the explanatory note of the bill: “The Securities Disclosure and Financial Advisers Amendment Bill responds to the current international financial crisis by removing unnecessary impediments to capital raising while ensuring the timely disclosure of relevant information to prospective investors.” It seeks and achieves that balance of getting rid of unnecessary duplication freeing up red tape and continuing to help the capital flow through to our business sector. 
Finally I should make reference to the fact that the bill also has another objective which is to make technical admittedly but necessary amendments to the Financial Advisers Act 2008. That legislation obviously had errors in it when it was passed through the House last year and taking the opportunity to address those errors is I think timely and I support doing that. This bill is a necessary step towards addressing the current situation. It is not a silver bullet or a panacea but it is a small step in the right direction and for the companies that are affected it will be of particular benefit. I am very pleased to commend this bill to the House.