Gilmore Aaron: Securities Disclosure and Financial Advisers Amendment Bill — In Committee 
Gilmore Aaron: Securities Disclosure and Financial Advisers Amendment Bill — In Committee 
[Volume:655;Page:4979] 
AARON GILMORE (National) 
: 
 I am pleased to rise to talk in support of this bill. It is an interesting bill for me in that in my professional capacity I used to raise a lot of money for venture capital companies. In fact I was an investor this bill would apply to in many ways in terms of investments of half a million dollars. I will talk a bit about some of this stuff. As someone who has gone through a prospectus and the situation of spending $10000 to $50000 on legal costs probably in Mr Chauvel’s old firm— 
Charles Chauvel 
: You can’t leave the lawyers poor. 
AARON GILMORE 
: —no let us see how we go—I know that to go through the process of raising an investment statement costs anywhere between $10000 and $50000. That is a dead-weight cost for somebody who is going to invest anyway. The previous speaker talked about the worry for those people who may be investing in this category. I think it is interesting that the previous speaker was the Minister of Commerce for a number of years; she had opportunities to do many of these things but never took them up. 
One of the interesting things that exist in clause 7 of this Part 1 is the really good amendment in subclause (7) allowing people who have the opportunity to take up this choice to disclose. They will have the ability to sign away and know that they have had that opportunity to turn down a prospectus or the investment statement that is normally given to investors. I saw a number of examples in my prior job and the man who chaired and ran the Capital Market Development Taskforce was my former employer my former boss. He is an interesting gentleman and he came up with some interesting changes to the scheme outlined in this bill. I think they are positive changes and they will allow venture capitalists to raise capital faster. The costs going to lawyers and accountants will be reduced and I think that is a good thing as some of those costs are completely wasted. My friends in the accounting and law professions will not be happy with that but it is a step in the right direction to reduce some of the costs that exist for raising capital across New Zealand. If we look at the capital raisings that have occurred in New Zealand that this legislation will apply to we can see that millions of dollars in time and effort could be freed up and used for more productive purposes. Those investors could apply those millions of dollars to productive parts of the economy and that would be a wonderful thing. If it allows one or two new businesses that are fast growing to raise capital they otherwise would not have raised because it would have been wasted on accountants and lawyers then that will be neat. 
The amount of capital that was used to set up TradeMe for example was in the order of a couple of hundred thousand dollars initially. Maybe another five or six “TradeMe” companies could be created as a result of fees being freed up from lawyers and accountants because of this bill because people will enrol in this and sign away their rights and will not have to spend so much money. They will knowingly have the ability to say that they do not need an investment statement; they will have the professional capacity and knowledge to make a decision on that. I think it is a really positive move. 
Hon Lianne Dalziel 
: What are you going on about? TradeMe didn’t do that. 
AARON GILMORE 
: Unlike the member on the other side I have raised millions of dollars in this sort of thing before. I have seen it in practice I have seen it working and I have seen the amount of time and effort that is— 
Hon Lianne Dalziel 
: You’ve done everything! There is nothing you haven’t done! 
AARON GILMORE 
: That member might think so and maybe that is right. Maybe there is a bit of envy on that side of the House; I think it is really interesting. But if we look at what this bill will do we see that it will free up the ability for investors to do positive things. Maybe the members on the other side are a little bit jealous because they do not have the ability to take up this opportunity—maybe; I do not know. This bill will allow some investors to improve their ability to invest in companies they want to invest in. It will reduce their costs and speed up the time and the effort for them to do so. I think that is a good step. If those members on the other side of the House are against that then that is their prerogative. If they are all for giving lawyers and accountants more fees and not having that money invested in productive parts of the economy then that is an interesting thing given we are in the middle of a recession and we want to reduce our red tape. But I think these are positive steps. 
There are many aspects of this bill that we could touch on in this initial part and the other exemptions that exist in other parts of the bill are all positive steps. There are some questions over the move from 12 months to 18 months that the committee has made some decisions on but they are positive moves. I can understand that and I think it is a positive step in the right direction. There were a number of questions and issues raised by the previous speaker but they are not in the scope of this bill. As I said this bill is designed to free up the ability of people who are what we call in the Securities Act “habitual investors” to invest and to reduce the cost of their investing so those companies that are trying to raise capital in the capital markets can do so cheaper and faster. 
Hon Lianne Dalziel 
: The wealthy—it’s another section that deals with experienced investors. 
AARON GILMORE 
: You know that member went through the select committee on this bill. Thank you.