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What we do

The Securities Commission is New Zealand's main regulator of investments. We help build confidence in New Zealand's securities markets.

To achieve our purpose our work involves:

Enforcement, monitoring and market oversight
- oversee securities markets activity
- inquire into suspected breaches of securities law
- intervene in the interests of investors
Law reform
- review securities law and practice
- recommend reform of the law
Exemptions
- consider applications for exemption from securities law
- consider applications for exemption from certain provisions of the Financial Reporting Act 1993
- grant exemptions from the law where appropriate
Authorisations
- consider and decide on applications for authorisation as trustees and statutory supervisors and futures exchanges and futures dealers
International co-operation
- promote New Zealand as a well-regulated country
- keep abreast of developments in global standard-setting and contribute the Commission's views to this process
- maintain good relationships with other regulators
Public understanding
- promote public understanding of the law and practice of securities.

Enforcement, monitoring and market oversight

The Commission inquires into, and can take enforcement action on misleading and illegal investment schemes, offer documents and advertisements for securities. The Commission oversees the operations of the stock exchange, and disclosure and practices of listed companies. We also inquire into practices of investment advisers and fund managers, and respond to requests from overseas securities commissions.

Dubious schemes and scams
The Commission investigates dubious offers of securities, and takes action if needed. Sometimes these are referred to other agencies such as the Registrar of Companies, the Serious Fraud Office or overseas securities regulators.

Offer documents and advertisements
Most investments promoted to the public require two offer documents - an investment statement and a registered prospectus. These documents should provide all the information an investor needs to make an informed decision on whether or not to invest. Offer documents and advertisements for securities must not contain information which is likely to mislead, confuse, or deceive investors.

The Commission reviews offer documents and advertisements for securities. If they do not comply with the law, the Commission can suspend or cancel offer documents, remove a prospectus or investment statement from the market, ban advertisements, and publicise these actions.

Securities market practices
Companies listed on the stock exchange must disclose changes in substantial security holdings, share trading by company directors and officers, and any information which might affect share prices. There are also laws against trading in shares by insiders, that is people who have information about a company that is not known to other shareholders. The Commission investigates suspected breaches of the law, and can take court action to seek civil penalties. The Commission also monitors the financial statements and corporate governance reporting of public companies.

Oversight of stock exchanges
The Commission is responsible for advising the Minister of Commerce on an exchange's conduct rules. Currently, NZX is the only registered exchange in New Zealand. The Commission and the NZX are co-regulators of the exchange's markets. Their roles are set out in a memorandum of understanding. In brief, the NZX is the front-line regulator concerned that market participants comply with the conduct rules, and the Commission is the statutory regulator which investigates any suspected breach of the law.

Overseas securities commissions
The Commission has signed the International Organization of Securities Commissions' Multilateral Memorandum of Understanding. This enables co-operation and exchange of enforcement-related information between jurisdictions.

The Commission also has agreements and memorandums of understanding with its counterparts in many other countries. Under these agreements it investigates suspected breaches of securities law in this country on behalf of other regulators. The Commission also calls on regulators in other countries to assist with investigations.

Law reform

The Commission reviews securities laws. Where we see opportunities to improve the law, generally from our experience in monitoring and enforcement work, we make recommendations for reform to the Minister of Commerce. We usually consult with market participants and the public before recommending changes to the law.

Exemptions and authorisations

Exemptions
The Commission can grant exemptions from securities law and certain provisions of the Financial Reporting Act 1993. We use this power to remove rigidities in the law so that new investment products and offers by overseas issuers are available to investors cost effectively and without delay. Exemptions are generally subject to conditions so that the spirit of the law is complied with, in particular that investors are given all the information they need to make investment decisions. Exemptions that are currently in force are listed on our website.

Authorisations
Trustees, for offers of debt securities, and statutory supervisors, for offers of participatory securities, must be authorised by the Securities Commission. Futures exchanges and futures dealers in New Zealand must be authorised by the Securities Commission. There are class authorisations for NZX participants, Sydney Futures Exchange participants, and wholesale electricity futures dealers. There are also a number of individual authorisations.

International co-operation

The Commission is an active member of the International Organisation of Securities Commissions (IOSCO), which is recognised as the international standard setter for securities regulation. The Chairman of the Commission, Jane Diplock AO, was elected Chairman of IOSCO's Executive Committee in May 2004 for a two year term and re-elected for a second two year term in June 2006. The Commission works with other members of IOSCO to develop policies and programmes to enhance the integrity of securities markets, and to facilitate the enforcement of securities laws across national borders. The Commission is a signatory to IOSCO's Multilateral Memorandum of Understanding and has bi-lateral MOUs and agreements with other securities regulators in many other countries.

Public understanding

The Commission helps people understand the law and practice of securities, through its publications, website, news releases and public speaking programme. Our public education programme aims to help people make better investment decisions.