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07 June 2000

News Release

Securities Commission Seeks Comment
On A Possible Binding Rulings Scheme

The Securities Commission is seeking public comment on a possible scheme under which it could make binding rulings on securities law.

At present, under the Securities Act 1978, the Commission may express authoritative opinions on some enforcement matters. For example, it can suspend registered prospectuses and investment statements and can grant exemptions from securities law. On these matters the Commission's opinions on the law are binding on the parties.

Under the scheme the Commission would be permitted to make rulings on securities law more generally.

The main justification for the scheme would be to give greater certainty on the law relating to investment contracts offered to the public. A scheme, if carefully formulated, could benefit market participants and the investing public.

Possible difficulties of such a scheme relate to:

• the relative roles of the Courts and the Commission in interpreting and applying securities law; and
• the extent to which the exercise of such a power could distract the Commission from its surveillance and enforcement work.

We have prepared a discussion paper which identifies a number of questions. We are anxious to know the views of market participants, the community and the Government on these questions. We will consider all comments we receive very carefully before we decide whether to make a recommendation of any sort to the Government for action.

Binding Rulings on Securities Law - A Discussion Paper is available from our web site www.seccom.govt.nz. Hard copies are available from our offices.

We invite public comment on the questions raised in the paper by Friday 4 August 2000.

Contact:

Catherine Chapman
Communications Manager

Phone (04) 471 7659

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