Curran Clare: Securities Trustees and Statutory Supervisors Bill — In Committee 
Curran Clare: Securities Trustees and Statutory Supervisors Bill — In Committee 
[Volume:671;Page:17710] 
CLARE CURRAN (Labour—Dunedin South) 
: 
 I will talk to Part 1 of the Securities Trustees and Statutory Supervisors Bill. I reiterate what my colleagues have said about our supporting the legislation but also the importance of taking a bit of a breath around it and perhaps taking a sensible and logical approach to how it is progressed into law. 
I will expand on some of the comments made by the previous speaker my colleague the Hon David Parker around the inappropriate securities regulation and the risk of it affecting capital coming into the country and the ability of new businesses to attract capital. It is extremely important that we have consistency on practice across our legislation and across our intent in terms of the signals we are sending to business. On the one hand we have this bill. We are saying we should take a deep breath leave it sitting on the Table and wait for the rest of the legislation to come through so that it has some logic around it. But on the other hand we have another piece of legislation before the House the Telecommunications (TSO Broadband and Other Matters) Amendment Bill which is putting in place a 10-year regulatory holiday. This regulatory holiday is essentially open slather and allows one part of the industry to get a benefit in order to progress a Government policy. 
The industry that my colleague David Parker referred to is critical to our country’s future. The new innovation high-tech industry is currently worth nearly $20 billion to the New Zealand economy and of that $20 billion $5 billion is export earnings. It is absolutely critical that we put in place legislation—this is where the Securities Trustees and Statutory Supervisors Bill is relevant—that has coherence in terms of the policy direction and the signals that this Government is sending to the market place. Those export earnings are critical. If we are to progress as a nation we need to look at how our innovation and our innovative creative industries and technological industries can maximise leverage in terms of building on that export base. Therefore the ability to bring in new capital is critical. 
We have referred a few times to the fact that Labour will support this legislation because it forms part of the ongoing reform of financial products and providers which was started by Labour and has been continued by the National Government. I pay tribute and give credit to my colleague Lianne Dalziel for progressing this bill and all the other legislation that it is linked to because it is carrying on that very good work. Lianne Dalziel’s work has set the groundwork for that. I also commend the Minister of Commerce Simon Power for his sensibleness in the way he has progressed the legislation although we ask that he listens to what we are saying around putting this bill on hold. 
The bill as we have heard removes the automatic right for the six previously statutorily approved trustees to supervise issues of debt securities in some investment schemes. It introduces a licensing regime for trustees that are to be run first by the Securities Commission and then by the Financial Markets Authority. That is why we are saying the Government should put the legislation on hold. Under that new regime all trustees statutory supervisors and unit trustees must be bodies corporate and their directors and senior managers must be of good character. 
Retirement village statutory supervisors have been included in the regime in recognition of the similar role that they play to trustees in monitoring the financial position of retirement villages. There was quite a lot of discussion in the Commerce Committee about retirement villages. We heard a number of people express the view that the Retirement Villages Act 2003 already provides sufficient protection for retirement village residents. However the committee decided that retirement villages should be included to ensure that residents receive the same protection as people with financial interests in securities. Most of the submissions related to the costs and the committee recommended that the Government’s costs be reviewed. 
The bill also contains a number of provisions designed to ensure that trustees statutory supervisors and unit trustees comply with their obligations. The Securities Commission may seek pecuniary— 
Sitting suspended from 6 p.m. to 7.30 p.m. 
CLARE CURRAN 
: Thank you— 
Hon Simon Power 
: He’s back. 
CLARE CURRAN 
: He is back. I think I earlier passed on my congratulations to the new Assistant Speaker Ross Robertson but also I welcome back the Minister in the chair the Minister of Commerce. It is great to have him in the Chamber while we talk about this bill. 
I will quickly recap on what I was saying. Although Labour supports this bill we have expressed our reservations about the need for it to be passed right away and the importance as we see it of parking it while other measures we know are coming are put in place in respect of the Financial Markets Authority. We think it is precipitous to pass it as it stands at this point. 
One of the things that my colleague the Hon David Parker talked about earlier tonight on which I particularly agree with him is the possibility and the spectre that this legislation raises of the stifling I suppose of the potential ability of companies particularly those with export capacity in our new technology areas and innovation sector to raise capital in this environment. That possibility needs to be looked at. 
Before the dinner break I was talking about one of the significant issues that appear in this bill: the issue of whether retirement village statutory supervisors should be included within the ambit of the bill. I put on the record again—the Minister might like to comment on this—that this is another reason why this bill should perhaps be parked for a later date after the Committee stage. As I and my colleagues have said we support the bill but this issue is another complex issue that needs more consideration. 
We considered carefully whether it was appropriate to bring retirement village statutory supervisors within the bill’s ambit as we are aware of the view that the Retirement Villages Act 2003 already provides protection for retirement village residents. This part of the bill received quite a lot of attention and quite a lot of consideration by the select committee and a number of submissions were made on it. On balance we supported the inclusion of retirement village statutory supervisors in the licensing regime because excluding them meant that residents of retirement villages would receive less protection in certain aspects than people with a financial interest in a security. We considered that that would be anomalous and undesirable. 
The Retirement Villages Act is inadequate on its own because it lacks the sanctions against poorly performing statutory supervisors. The monitoring and sanction regime proposed by the bill would address the types of deficiencies identified in the 2009 report by the Retirement Commissioner. 
A number of submitters raised concerns about the additional compliance costs that would be associated with this bill. But it is outside of the scope of this bill to address that issue which is one of the reasons why we think that the bill due to its complexities should be parked on the Table.