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25 February 2002

News Release

Securities Commission Recommends Changes to Investment Adviser Law

The Securities Commission has recommended significant changes to the law relating to investment advisers.

The recommendations to the Minister of Commerce, Hon Paul Swain, follow extensive public discussion on the law relating to the giving of investment advice, Commission Chairman Jane Diplock said.

"This law is important. Investment advisers perform important functions in advising the public on investment and in marketing for the raising of capital."

"We believe our recommendations, if adopted by Government, will strengthen the integrity of the investment process in New Zealand and improve public confidence in the investment advisory industry," Jane Diplock said.

A discussion paper Law Reform: Investment Advisers released by the Commission last August attracted more than 40 submissions.

"We are grateful for the thoughtful and detailed work the people who responded put into their submissions," Jane Diplock said. "The Commission has considered these carefully as it prepared the formal submissions for the Minister."

In general there was strong support for the proposals for reform set out in the discussion paper. The most important of these related to:

disclosure of important information that may indicate conflicts of interest (such as remuneration and commissions) and of the qualifications and experience of the adviser;
making the recommendation of illegal offers of securities an offence;
strengthening the enforcement of investment adviser law.

The Commission looks forward to conferring with the Minister after he has had an opportunity to study the recommendations.

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See Formal recommendattions and Covering Letter to the Minister

Contact: Catherine Chapman phone (04) 471 7659

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