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28 November 2002

News Release

Principles of Corporate Governance and Financial Reporting

The Securities Commission has published principles that it believes should underlie the practices of all participants in the securities market.

Corporate governance, financial reporting and audit quality issues are being debated vigorously around the world.

"These matters are of core importance for New Zealand's capital markets," Commission Chairman Jane Diplock said. "We are making our views known on certain aspects of governance and reporting in order to contribute to that debate."

The principles include:

Financial reporting, corporate governance and market regulation should align with international best practice;
Boards and management should have high ethical standards and be mindful of their responsibilities to their investors;
Investors should be able to have confidence in the quality of audits;
An independent oversight body should monitor issues of audit quality and auditor independence;
Regulators should take a rigorous approach to monitoring the securities market and enforcing the law.
Regulators should identify regulatory gaps and recommend reform of the law.

The Commission encourages all participants in New Zealand's capital markets to examine their practices and to make changes to improve their corporate governance and financial reporting.

The Commission will continue to make best use of existing law and will identify regulatory gaps and recommend appropriate reforms of the law.

It will work co-operatively with other regulators to achieve effective monitoring and enforcement of securities law.

"The onus is on all participants to adopt standards and practices that will strengthen investor confidence in New Zealand's capital markets," Jane Diplock said.

The Commission's statement of principles, Strengthening Confidence in New Zealand's Capital Market - A Statement on Certain Aspects of Corporate Governance and Financial Reporting, is available from the Commission's offices phone (04) 472 9830.

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Contact: Catherine Chapman (04) 471 7659

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