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2006 Annual Report

ACHIEVEMENTS 2006 - 2007 cntd.

PUBLIC UNDERSTANDING AND MARKET PRESENCE

The Commission’s goals in this key result area are that public understanding of the law and practice of securities and the Commission’s presence in the markets is increased.

Responsibility

promote public understanding of the law and practice of securities

Achievements this year

supported investment education in New Zealand schools
raised awareness among small business people of telephone fraudsters from overseas
was ranked 4th of 25 Crown entity websites and 8th in the top 10 government websites
spoke to groups in New Zealand and overseas on 24 occasions
continued our policy of positive relations with the news media and issued 23 media releases
responded to 1454 inquiries from the public

13% of expenditure

Investment education
The Commission’s education programme is delivered via well-defined projects which target clearly identified audiences with specific messages. The overall aim is to help New Zealanders make better investment decisions. We continued to sponsor Enterprise New Zealand Trust’s financial literacy programmes for schools. This included funding to introduce a new paper in financial studies (FSP) for senior secondary school students which was developed under Commission sponsorship last year. The paper was tested during 2005 and introduced more widely in 2006. A further sponsorship was approved in May for Enterprise New Zealand Trust to develop teacher resource materials and undertake teacher training for the FSP. The New Zealand Qualifications Authority is developing unit standards for financial studies. When these are registered Enterprise New Zealand Trust’s financial studies courses will attract more students because they will earn credits on the National Qualifications Framework, which will show on their record of learning and count towards University Entrance.

Telephone share scams
The Commission undertook a media and internet education campaign, Don’t be sucked in by share scams, from June to September 2005. The campaign targeted small businesses throughout the country because of their vulnerability to share scams promoted by telephone callers from overseas. The campaign included advertising and editorial in relevant newspapers and magazines, and messages in relevant internet newsletters. The advertisements directed people to a dedicated website, www.sharescams.org.nz. Responses to the campaign in the form of inquiries to the Commission and visitors to the website confirmed that these fraudsters were very active. We ran the campaign a second time from November to January and were pleased to find that people who contacted us were generally aware of this scam and they did not intend to send good money after bad. During the campaigns the Commission continued its enforcement efforts by endeavouring to contact the callers and the regulator in the jurisdiction they purported to be operating from. Inevitably the callers were found to be fraudulent and we named these people on our website. Reports of overseas telephone callers died down towards the end of the financial year. The scam has evolved over many years and has taken many millions of dollars out of this country. As it has been so lucrative for the fraudsters it is likely that it will reappear again in the future.

Review of website
We further developed our website www.seccom.govt.nz after it was reviewed by e-Gov Watch, an agency contracted by the State Services Commission to evaluate government websites. e-Gov Watch rated our website 4th of 25 Crown entity sites and 8th of 57 government sites. The website brings together all the Commission’s efforts to increase public understanding of securities law and practice including publications, news releases and investor information. More than 2250 people are registered to receive email alerts to new items on the site. More that 30,000 visits are made to the website each month.

Communications
The Commission also communicates with its various stakeholders through the quarterly newsletter The Bulletin, news releases, speeches and presentations, and by responding to public inquiries. The Commission issued 23 media releases, initiated media interviews, and responded to inquiries from the news media. The Chairman, Members and staff spoke to groups in New Zealand and overseas on 24 occasions about the Commission and its work. Staff handled 1454 inquiries from the public.

SERVICES TO THE TAKEOVERS PANEL

Responsibility

provide support services to the Takeovers Panel

Achievements

staff provided executive, administrative and support services to the Panel

Takeovers activity was high during the year. The Panel’s work has involved several complex and controversial exemption applications and some important enforcement matters. A considerable amount of management time has been required on legislative developments, particularly the Crown Entities Act 2004 and the Securities Legislation Bill. The Panel was recently given increased funding for more resources to handle additional work that will arise from forthcoming legislative changes. As a consequence the number of full-time staff working for the Panel increased to five near the end of the year. An additional lawyer is being sought. This appointment will increase the full-time staff working to Senior Executive Officer, Kerry Morrell, to one counsel, one senior lawyer and three lawyers. Administrative and communications staff provide support to the Panel on a part-time basis. The Commission and the Panel have a good working relationship.

17% of expenditure

OTHER GOVERNMENT AGENCIES

The Commission values its relationships with other government agencies including the Ministry of Economic Development, Registrar of Companies, Reserve Bank of New Zealand, Serious Fraud Office, Commerce Commission, Retirement Commission and State Services Commission.

STAFF AND CAPABILITY

The Commission was rated second out of 69 small workplaces in the Unlimited/JRA Best Places to Work in New Zealand Survey 2005. The Commission undertakes a range of good employer initiatives and fosters a supportive, collegial and enthusiastic work environment. We believe we are able to deliver high quality outcomes for New Zealand capital markets because of the calibre and dedication of our staff.

The Commission thanks its staff for their outstanding contributions during the 2005-2006 year. It remains committed to preserving its staff capabilities through professional training programmes. It is committed to being a good employer. Staff numbers increased to 42 (38 full-time, three part-time and one on maternity leave) during the year to meet the demands of higher workloads, particularly in enforcement and monitoring and market oversight work.

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