Young Jonathan: Securities (Disclosure) Amendment Bill Financial Advisers Amendment Bill — Third Readings 
Young Jonathan: Securities (Disclosure) Amendment Bill Financial Advisers Amendment Bill — Third Readings 
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JONATHAN YOUNG (National—New Plymouth) 
: 
 We acknowledge the work the previous Government did in this particular area. One of the areas this Government is focused on is a serious and strong priority to get our economy moving again particularly sectors of our economy that generate growth and jobs. With a decade of deficits ahead of us it will take a lot more than shifting around what we already have to get things going. It will take an increase which is growth and the development of business and industry in New Zealand for it to become more competitive and successful on the international stage. 
Because of this situation we need a regulatory regime that will enhance our opportunities. One particular area that New Zealand businesses are finding difficult is the raising of capital to fund such growth and development especially as we are in a credit crisis. As the previous speaker Charles Chauvel commented and as Lianne Dalziel also mentioned confidence is a very important ingredient for growth and for the opening up of our financial markets here in New Zealand. Many people have been hurt and have lost many thousands of dollars. Confidence is not built upon just the wide smile and smart suit of an issuer of a security or stock; it is built upon the substance of the issuer’s offering which is reflected accurately currently and in plain English for prospective investors. 
The Securities (Disclosure) Amendment Bill and Financial Advisers Amendment Bill are proposed within the context of the present global financial crisis and seek to reduce its impact on New Zealand businesses. I fully endorse and support the recommendations made within the legislation and the changes to the Securities Act that have been recommended through it. Many thousands of New Zealanders have lost a lot of money in the last year or so and are shying away from investment. A regulatory regime that not only makes it easier for companies to raise money but also at the same time continues to make information accurately and currently available to prospective investors is very important in order for their confidence to continue and for many people to again be seen to invest in or release their capital into New Zealand. 
This amendment legislation seeks to create a better environment for those investors and businesses to raise finance which is essential for businesses to operate. It also ensures that timely disclosure of relevant financial information is provided by the issuer of a security to a prospective investor. There is always tension between businesses needing to be able to easily raise capital and the timely and appropriate process involved in raising that capital that protects the interests of the prospective investor. It would be fair to say that New Zealanders who have suffered losses through finance companies and through loss of property value are often lost in the technical terms and the minefield of the financial sector. With this legislation we want to achieve a balancing act giving investors the opportunity to have the information they need without additional cost arising from considerable amounts of information being duplicated. 
As the Minister of Commerce the Hon Simon Power stated during the second reading of this legislation “This bill addresses a number of the recommendations made by the Capital Market Development Taskforce in its interim report of November last year. The bill amends the Securities Act 1978 to provide for a simplified disclosure prospectus that may be used by listed issuers who are already subject to continuous disclosure requirements and would otherwise be required to produce a separate disclosure document for each offering. Listed issuers would therefore be required to produce only 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 is not to reduce the amount of information provided to investors but to reduce duplication between forms of disclosure.” 
The changes to the legislation have been described by the Commerce Committee as being minor and of a technical nature. These amendments essentially sort out and tidy up some of the issues that need attention in the general oversight of financial institutions in New Zealand. All of this work goes towards increasing confidence in investors which in turn will release capital increasingly to businesses that need it in order to go to the next level of growth that they need to go to and that we need them to go to in order to bring our country through the recession. 
The legislation looks at the simplified disclosure prospectus that is to be used by listed issuers who are already subject to what we call the continuous disclosure requirements. The committee had the benefit of assessing one such simplified disclosure prospectus that came to 22 pages in length compared with prospectuses in excess of 100 pages that are regularly produced for large companies raising capital. We see that there is obviously efficiency and a greater ease in producing information necessary for the raising of capital by these companies. The reduction of unnecessary duplication is one way in which we are reducing the red tape and cost of raising capital. 
Overall submissions on this legislation were in favour of the simplified disclosure regime. Some submitters stated that they did not think the Government has gone far enough with regard to the legislation. The legislation was swiftly prepared in response to address the current credit crisis. The amendments are part of the Government’s response to this crisis and will help ease the credit crunch currently being experienced by New Zealand businesses. The amendments cover both stock market listed and unlisted businesses meaning that the benefits reach everyone. The reduction in compliance costs will help New Zealand businesses to focus on business rather than on excessive reporting. Investors at all levels will be given easy-to-understand information allowing them to make better-informed and timely decisions about their investments. 
This legislation is more evidence of the Government’s commitment to helping New Zealand through the recession. The amendments made by the Commerce Committee will help the legislation to achieve its objective of facilitating access to capital for New Zealand businesses. It is my pleasure to support the third readings of the bills in the House. Thank you Mr Deputy Speaker.