What’s New?: News Releases 2000 | Securities Commission


	Advanced Search

Print this page.

2 August 2000

News Release

TOUGHER LINE ON ENFORCEMENT IN SECURITIES MARKETS

The Securities Commission significantly increased its enforcement work in the year to 30 June 2000.

In its annual report the Commission says its commitment to surveillance and enforcement work increased by more than 21% over the previous year. This work included:

a review of more than 100 offer documents in particular prospectuses and investment statements for superannuation schemes and unit trusts - as a result 47 offer documents of 19 issuers were amended or withdrawn. In four cases investors were offered refunds. We aim to see improvements in the quality of offer documents, in particular, statements about risk, prospective returns, fees, commissions and charges.
identifying scam offerings to the public - resulting in two companies, IMI Pacific Group Limited and Walakahai Pacific Corporation Limited, being placed in statutory management, 26 referrals for inspection to the Registrar of Companies or the Serious Fraud Office, and seven public warnings.
a report on the quality of forecast rates of return and statements of risk in offer documents for commercial property schemes - the industry is warned to take greater care in settling and promoting these.
the activities of investment advisers - this has led to several inspections and referrals to the Serious Fraud Office and the Registrar of Companies. We are also reviewing the law on investment advisers.
a report of its inquiries into Max Resources Limited - a long, painstaking task which has also contributed to the continuing law enforcement work of the Australian Securities and Investments Commission.
action on the conduct of people trading in securities - the Commission completed eight inquiries into insider trading and substantial security holdings in publicly listed companies. We reported publicly on three occasions.

Chairman Euan Abernethy said extra funding from Government and fees enabled the Commission to increase its work on enforcement.

Exemptions

Significant exemptions from securities law granted during the year were:

the New Zealand Stock Exchange's New Capital Market exemption. This enables small listed companies to distribute offer information on the internet. This reduces compliance costs while still ensuring that people have access to good quality information about the investments;
changes to require credit unions to appoint a trustee. This recognises the increasing importance of credit unions in the community;
an exemption which enables authorised unit trust and open-ended investment companies in England and Scotland to offer investment interests in New Zealand with their overseas offer documents. This increases the range of investment products available to New Zealanders and makes for a more competitive market.

Reform

Work on reform of securities law resulted in several papers issued for public comment:

Review of the Securities Regulations - Stage One (jointly with the Ministry of Economic Development);
Resident funded retirement villages - how the Securities Act 1978 applies to these schemes;
Binding rulings on securities law - a possible scheme under which the Commission might be given power to make binding rulings.

The Commission has been working closely with the Government on the implementation of a Takeovers Code.

International liaison

Additional funding also ensured that the Commission played a full part in international standard setting for good securities market regulation as a member of the International Organisation of Securities Commissions (IOSCO), an organisation of 165 securities regulators.

IOSCO has approved a Statement of Objectives and Principles of Securities Regulation. "We are an active member of the small International Committee on the Implementation of the Objectives and Principles," Euan Abernethy said. "This Committee is working to promote high regulatory standards and effective cross-border cooperation on a global basis."

Future work

Projects in the new financial year will include continuing high levels of enforcement work, reviews of the Securities Regulations and of insider trading law in partnership with the Minister of Economic Development, and monitoring the effect of electronic commerce on the securities markets.

The Commission has also been asked to provide executive and administrative services to the new Takeovers Panel. The Commission is working to ensure that it can manage this new activity in a practical, effective and principled way.

The Annual Report 2000 was tabled in the House on Wednesday 2 August 2000 and is published on the Commission's web site www.seccom.govt.nz. Hard copies are available by phoning (04) 472 9830 or faxing (04) 472 8076.

Contact -

Catherine Chapman,

Communications Manager

ph (04) 471 7659

Return to index