Shanks Katrina: Securities (Disclosure) Amendment Bill Financial Advisers Amendment Bill — Third Readings 
Shanks Katrina: Securities (Disclosure) Amendment Bill Financial Advisers Amendment Bill — Third Readings 
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KATRINA SHANKS (National) 
: 
 It is my pleasure to speak today in support of the third readings of the Securities (Disclosure) Amendment Bill and the Financial Advisers Amendment Bill. I also acknowledge the officials who came before us and supported us throughout the legislation. They were always forthcoming with their advice and were very timely in providing additional information. 
There was robust debate around a couple of the issues in this legislation and one of them was the wealthy investor category which we kept on coming back to. It was something we thought about a lot before we made the decision that we would have that clause in the legislation. This legislation came about in response to the current international financial crisis. It is about how we can raise capital and how we can get businesses to raise capital more easily when times are tough which they are and it is hard to raise capital. It is all about how we can make it easier for these businesses how we can encourage investors to invest in New Zealand businesses and how we can get that match together so our companies can grow. 
When one goes around the sector and talks to people about obtaining capital one will hear them talk about the walls in their sector. When they talk about the walls they are talking about the regulation within their sector and how high the walls are in New Zealand when one goes to raise capital to do something. The walls are so great for companies especially for those companies that are in growth mode and may not have a lot of skills in raising securities or have not done so before as a way of getting capital into their organisation. The walls are very high for them to get over and they struggle to deal with the regulation. They get a bit frightened because there is a lot of regulation around them. So it is about looking at the walls around businesses and how we can reduce compliance and reduce regulation but still ensure there is enough regulation there to protect both investors and companies at the same time. That is what this legislation is about. 
It is about ensuring that we have growth in our companies in New Zealand. In November last year the Capital Market Development Taskforce released an interim report in response to the financial crisis. I acknowledge the work of the previous Minister the Hon Lianne Dalziel in relation to this task force and setting it up. The report made a number of recommendations on how securities law could be improved to increase the availability of capital and reduce the compliance costs of raising the capital. This legislation addresses a number of the items addressed by the task force and the recommendations it brought forward requiring legislative change—which is why we have got this legislation—and which are considered to be most likely to make immediate differences for firms seeking to raise capital. That is really important. 
It is important that we move very very quickly in these times to ensure that we keep that flow of money going around and around. So we have picked up the things that we think will bring the most change the quickest—in effect the biggest bang for our buck. The legislation principally provides for simplified disclosure prospectuses. That was the biggest thing we looked at in this legislation. When a company goes to do an issue it does a prospectus and if it does an additional issue it has only to do a simplified disclosure prospectus. Continuous disclosure is still in there so the protection is still there for companies which is really important. That was the biggest item we looked at in this legislation. 
The issue of wealthy investors was one we looked at in terms of how much information those investors need and how well they need to be informed to make these decisions. There was great debate on the point that just because someone has half a million dollars it does not necessarily mean one has the skills to make good investment choices. We looked at that point and took it into consideration and we thought that at this stage the wealthy investors or in effect sophisticated investors do have the skills to make that decision. It is my pleasure to support this legislation today.