Mahuta Nanaia: Securities Trustees and Statutory Supervisors Bill — In Committee 
Mahuta Nanaia: Securities Trustees and Statutory Supervisors Bill — In Committee 
[Volume:671;Page:17718] 
Hon NANAIA MAHUTA (Labour—Hauraki-Waikato) 
: 
 Tena koe thank you Mr Chair. I also congratulate you on your role as Chair of the Committee and of this particular debate. I intend to take only a brief call to really highlight some of the issues that have led to Labour’s position of supporting the Securities Trustees and Statutory Supervisors Bill. First of all at the heart of the bill the Minister of Commerce opened his comments by saying the bill is intended to protect the interests of investors and we certainly understand that in the current economic climate and as a result of the collapse of financial markets we need to improve and strengthen legislation to ensure that investors are able to be protected in terms of their assets and the investments they make. 
At the core of this bill are some essential responsibilities of trustees that the bill comments on and aims to strengthen. Firstly are trustees capable of performing their role? Can they perform their functions effectively? They should and must be held accountable for any failure to perform their functions as trustees. If we drill into the essence of what this bill is about we find that it aims to provide protections and put measures in place to achieve those outcomes. That is why Labour is particularly pleased to support the bill’s intent. 
In Part 2 in particular I will comment on two aspects of Subpart 2. Clauses 24 to 26 are around the issue of monitoring and enforcement. Licence holders must report at regular intervals between 6 and 12 months from the issue of the licence and once every 6 months after that to the Securities Commission particularly concerning the licence holder’s compliance with the terms of trust deeds and deeds of participation and continued compliance with the requirements of eligibility to hold a licence. Anyone who has been a trustee understands that part of their role and function is to implement the terms of the trust deed. 
That is a very important role. I have often had discussions with people who undertake the role of the trustee and struggle with getting their heads around the terms of a trust deed and what their actual responsibility is. That takes some self education on their part to read the trust deed and secondly to understand their full obligation as trustees in implementing the intent of that trust deed. So ongoing monitoring and enforcement in this area can only be a good thing. 
The other issue I will comment on is the variation and cancellation of licences and the removal of trustees in clauses 30 to 43 of Subpart 2 of Part 2. The bill enables the commission to vary a licence before the expiry of the licence without the consent of a licence holder. I understand that one important reason for this is the way in which “material change of circumstances” is defined. I would appreciate some clarification from the Minister in terms of what leads his thinking around this particular change and clarifying for my own part as I was not a member of the select committee how he envisages that this will improve aspects of the roles of trustees. For my part again I would appreciate that clarification from a Minister who certainly has his head around these types of issues the level of detail and the intent of the change. 
Part of this change identifies that apart from extensive powers to vary licences the bill also gives the commission powers to remove trustees and cancel licences. Again just by way of asking a question of the Minister I ask whether he foreshadows that this could be problematic; if not and I am raising an issue that is completely off on a tangent then I would be happy to be corrected. But it seems to me that there is quite a huge power there to be given to the commission to be able to remove trustees and cancel licences but I can only suspect that that is in direct relevance to the way in which the trustee may not have carried out their duty and obligation with regard to the rest of the Act. I see the Minister nodding. In some part by some great fortune my inclination was correct on that. 
This then certainly demonstrates and confirms to me that the Minister has given deep consideration to the changes required in this sector and they have been well-thought-through. I have appreciated his insight into the way in which the financial markets can be better regulated for the benefit of investors and ultimately to ensure that there are greater regulations around the roles of trustees to be able to conduct their particular function with the utmost regard and responsibility to the role they have as trustee. 
With that said I think that members of our team have identified some questions and we have appreciated the opportunity to continue to raise matters of interest. But can I say from a layperson’s point of view although this is a hugely technical bill and I am not a member on the select committee I do understand that people out there in our communities want a strong level of protection. I am delighted that the select committee gave some consideration to including retirement villages in this because quite simply the Retirement Villages Act 2003 does not address the issues and the role of trustee as this bill does. So although I understand that the submissions that came to the select committee were in part somewhat of two minds after deep consideration by the Commerce Committee its ultimate decision to include retirement villages will I think protect those good old folks those senior citizens who are in retirement villages and have a particular interest in the ongoing management of the place where they reside. Kia ora.