Huo Raymond: Securities (Disclosure) Amendment Bill Financial Advisers Amendment Bill — Third Readings 
Huo Raymond: Securities (Disclosure) Amendment Bill Financial Advisers Amendment Bill — Third Readings 
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RAYMOND HUO (Labour) 
: 
 I rise to take a call in the third reading debate of the Securities (Disclosure) Amendment Bill and the Financial Advisers Amendment Bill. I do have mixed feelings especially after listening to what the Banking Ombudsman said at the Commerce Committee hearing this morning. The whole issue is about how to strike a balance between investors’ confidence and assisting businesses to access capital. 
On the bills’ third reading debate it is appropriate for me to take this opportunity to thank our officials and parliamentary counsel for the great work they have done in putting together valuable views that originated from submissions on this legislation and for assisting the Commerce Committee in reporting those valuable recommendations to this House. My learned colleague the Hon Lianne Dalziel has no doubt done a great job in her capacity as the chair of the Commerce Committee. I will certainly miss the days when we deliberated on those submissions on the legislation. 
The bills are intended to make raising capital more efficient through reducing costs to issuers while ensuring that the level of information provided to potential investors is not reduced. In other words the bills are designed to remove impediments to raising capital without undermining investor protection. During the current economic downturn it is even more important to make sure that investors’ protection is stringent. Labour supports those proposals that 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. When launching the task force in July 2008 the Hon Lianne Dalziel said that improving the investment environment was a key part of the Labour-led Government’s economic transformation strategy. She said “to deliver wealth and jobs New Zealand firms need ready access to affordable capital. The task force will identify ways to make this happen”. 
I take this opportunity to thank the Capital Market Development Taskforce. Originally the task force had a year to produce its specific outputs but in response to the global financial situation it produced an interim report in November 2008. It outlined a package of proposals designed to boost access to capital for New Zealand businesses and reduce the cost of raising capital. The chair of the task force Rob Cameron noted in the interim report that in response to the current financial crisis access would be a key issue in the survival of many businesses. 
In summary the Securities (Disclosure) Amendment Bill addresses firstly the Securities Act 1978 in order to provide for a simplified disclosure prospectus that may be used by listed issuers who are subject to continuous disclosure requirements and secondly it addresses the Act in relation to the categories of people who are exempt from the disclosure requirements for offers of securities under the Act. 
The Financial Advisers Amendment Bill on the other hand amends the Financial Advisers Act 2008 which was passed by the House of Representatives on 23 November 2008 through the correction of a minor error in the assent version of the Act and a number of other minor tidying-up amendments. The Commerce Committee of which I am a proud member received 18 submissions from a variety of sectors. Generally those submissions on the bill welcomed the introduction of the simplified disclosure regime and supported the bill’s proposed amendments to the Securities Act that related to categories of people who are exempt from the disclosure requirements for offers of securities under the Act. 
Regarding the simplified disclosure prospectus there is currently duplication of the information released by listed issuers under the continuous disclosure obligations and the documents required at the time that make a securities offer. All public offerings regardless of whether the issuer is listed on a registered securities exchange such as the New Zealand Exchange must comply with the disclosure and other requirements of the Securities Act 1978. In the case of any offering by an issuer who is already listed on a registered exchange two disclosure regimes apply. Those two are the continuous disclosure requirements for listed companies and the disclosure requirements for a public offering. The proposal in this bill is for listed issuers to produce one disclosure document for a securities offering instead of producing both a full prospectus and an investment statement. 
The intention of the simplified disclosure prospectus as I mentioned in my previous speeches is not to reduce the amount of information provided to investors but simply to reduce duplication between forms of disclosure. In that respect as many submitters rightly stated the regime should and would promote effective disclosure to investors in a streamlined form. However Labour members of the Commerce Committee have concerns about the wealthy investor category as the Hon Lianne Dalziel 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 have mixed feelings about the third reading of this legislation especially after listening to what the Banking Ombudsman said at the Commerce Committee hearing this morning. It is very important for us to strike a balance between investors’ confidence and how New Zealand businesses can access capital. It is great to be able to support the legislation and I congratulate the Minister again on adopting this great initiative. Thank you Mr Deputy Speaker.