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2005 Annual Report

ACHIEVEMENTS

INTERNATIONAL

The Commission's goal in this key result area is that New Zealand's markets and regulatory environment are respected internationally, creating a climate for increased investment and good relationships with overseas regulators.

Responsibilities

promote New Zealand as a well-regulated securities market
keep abreast of developments in global standard setting
contribute the Commission's view in international forums
fulfil our obligations under the IOSCO Multilateral Memorandum of Understanding and bilateral MOUs
contribute to the work and development of IOSCO and other relevant international bodies
enhance the Commission's relationship with the Australian Securities and Investments Commission

Achievements this year

promoted New Zealand as a well-regulated market at IOSCO and other international forums
led the adoption of a new strategic direction for IOSCO
took part in IOSCO's Executive Committee, Technical and Emerging Markets Committees, and the Asia Pacific Regional Committee
fulfilled our obligations under the IOSCO Multilateral Memorandum of Understanding
furthered our relationship with the Australian Securities and Investments Commission
presented a paper at a conference hosted by the Financial Stability Institute and the Hong Kong Securities and Futures Commission

15% of expenditure

IOSCO

IOSCO is a global forum for securities regulators and is recognised as the international standard setter for securities regulation. Some 172 regulatory and self-regulatory agencies are members of IOSCO. Together they regulate more than 90 percent of the world's securities markets.

IOSCO works in five areas:

multinational disclosure of information including harmonisation of international accounting and audit standards;
regulation of secondary securities markets including examining the use of the internet and other electronic communications;
regulation of market intermediaries and their products;
enforcement and exchange of information across national borders; and
investment management.

Executive Committee of IOSCO
The Executive Committee is the governing body of IOSCO responsible for achieving the objectives of the organisation. The Commission's Chairman, Jane Diplock, has chaired the Executive Committee for the past year. This role enables New Zealand to raise its international profile as a market regulated in accordance with the IOSCO Principles of Securities Regulation. It also enables New Zealand input at the highest level of global securities regulation and developments.

IOSCO Strategic Direction
The ability and willingness of securities regulators to work together to combat international securities crime is vital in the global marketplace. In April 2005 IOSCO's Presidents Committee, which encompasses all members, endorsed a strategic direction proposed by the Executive Committee. Significant elements of the plan are:

to encourage and assist member jurisdictions to adopt IOSCO's Objectives and Principles of Securities Regulation (IOSCO Principles); and
to increase the number of countries that are signatories to IOSCO's Multilateral Memorandum of Understanding (IOSCO MMOU).

The 30 IOSCO Principles are based on three objectives - the protection of investors, ensuring that the markets are fair, efficient and transparent, and reducing systemic risk. The Principles are used by the International Monetary Fund and World Bank in the Financial Stability Assessment Programmes in assessing a country's securities regulation. Wider adoption of the Principles will bring consistent regulatory standards and practices in member countries. The MMOU enables signatories to exchange information across borders which is important for controlling financial crime. Under IOSCO's strategic plan various forms of assistance will be available to countries seeking to adopt the Principles and to help member countries prepare for the rigorous scrutiny they must undergo before being accepted as signatories to the IOSCO MMOU. The Presidents Committee set a deadline of 2010 for all IOSCO members to commit to joining the MMOU.

The adoption of the Strategic Plan is a highly significant decision. It will contribute to well-regulated international securities markets in which investors can have confidence. It also reflects the strength of IOSCO and its ability to achieve consensus from such a large and diverse membership. Much of the groundwork for this strategic plan originated in our Commission.


Monique Egli Costi	Lauren Chronican	Jocelyn McKenzie	Nicola Ingham

Trans-Tasman Relationships

The Commission continued to work towards trans-Tasman alignment that will promote investment in both New Zealand and Australia, reduce compliance costs for issuers, and increase the choice for investors. We held two meetings with the Australian Securities and Investments Commission (ASIC) to develop closer working relationships and to maximise opportunities for cooperation on areas of mutual interest. The Chairman presented a paper on IOSCO to ASIC's Summer School, and the Director of Enforcement took part in an international meeting hosted by ASIC on cold calling share scams. The Chairman spoke to the Australian Compliance Institute and the Australian Institute of Public Administration. The Chairman took part in the Australia New Zealand Leadership Forum and has been invited to chair the joint working group on securities regulation.

Other International Involvement

The Commission hosted visits from the Secretary General of IOSCO, and representatives from the China Securities Regulatory Commission and the Financial Services Agency of Japan. The Chairman spoke at a conference hosted by the Financial Stability Institute and the Hong Kong Securities and Futures Commission, and also met with staff of the IMF and World Bank. Staff took part in seminars organised by the APEC Financial Regulators' Training Initiative, the ASIC Summer School, and the International Financial Regulators' Enforcement Conference hosted by the Financial Services Authority in London.

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