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23 August 2007
News release
Hon Lianne Dalziel, Minister of Commerce
Govt consults with finance sector regulator
Commerce Minister Lianne Dalziel has announced she will be taking steps pending proposed law changes aimed at reforming the non-bank finance sector.
Lianne Dalziel met today with Securities Commission chair Jane Diplock to discuss the best way forward after the collapse of five finance companies since the start of 2006.
"The government has already decided to strengthen the existing regulatory regime through decisions that have come out of wide consultation with the industry in the Review of Financial Products and Providers," Lianne Dalziel said.
"However, it has become clear that many investors do not understand the level of risk they are taking because they haven't been properly advised and it is also clear that some products are underpriced.
"Today I have set in train a number of actions that can be taken within the existing framework."
Lianne Dalziel has:
- asked the Securities Commission to call the Trustee Companies together to determine whether the existing terms of the trust deeds are adequate;
- undertaken to give priority to the need for independent audit regulation and oversight;
- asked the Securities Commission to move ahead on a public information campaign that will foster greater understanding of the risks and returns; and
- will consider reprioritising parts of the Review of Financial Products and Providers to enable particular concerns to be addressed first.
"Legislation inevitably takes time and care to draft, pass through Parliament, then implement. The industry then requires transition time. All that is on track. But I feel for those who have lost their hard earned investments as a result of the investment decisions they have made and I intend to do everything I can in the meantime," Lianne Dalziel said.
"However, I repeat the advice I have been giving; people who are not experienced investors should ask questions about the level of risk, whether the risk is appropriately priced, and whether the adviser is receiving financial gain from signing them up."
Contact: Elspeth (Ellie) McIntyre, Press Secretary, ph 04 471 9397 cell 021 227 9397
All Lianne Dalziel's media statements and speeches are at www.beehive.govt.nz/dalziel