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2009 Annual Report

International cooperation and recognition

The Commission cooperates with overseas regulators and works to position New Zealand internationally as a well-regulated market.

Trans-Tasman cooperation

Commission members met twice with the Australian Securities and Investments Commission to discuss the trans-Tasman regulatory environment and enforcement issues. Past work was reviewed and priorities set for the next three years.

These include the regulatory framework for mutual recognition of advisers, information-sharing on stock exchange surveillance, and joint initiatives to support investor education and financial literacy.

The trans-Tasman Mutual Recognition of Securities Offerings reduces costs and simplifies compliance for issuers making offers of securities. Forty issuers from New Zealand and Australia have made use of the new regime since its introduction in June 2008.

IOSCO

The Commission contributes significantly to strengthening the international investment environment through its participation in the International Organisation of Securities Commissions (IOSCO), the international standards setter for securities regulation.

IOSCO aims to have the world's securities regulators regulate their markets according to explicit principles and standards. To facilitate the enforcing of securities laws, it encourages cooperation and information exchange.

The Commission is a member of IOSCO's governing body, the Executive Committee, of which Jane Diplock is chair. The Commission is also vice-chair of the Asia Pacific Regional Committee. We participated in meetings of these committees and IOSCO's Presidents Committee.

Under Jane Diplock's leadership, IOSCO has worked to address the global financial crisis, setting up three task forces looking at short selling, unregulated products and unregulated entities. The G-20 has endorsed these efforts because it supports IOSCO's goal of enhancing transparency and accountability, and promoting integrity in financial markets.

Memoranda of Understanding

IOSCO's Multilateral Memorandum of Understanding (MMOU), to which New Zealand is a signatory, has gained six new signatories during the year. The organisation aims to have all members signed up by 2010.

With New Zealand Aid funding, the Commission helped Papua New Guinea apply, and identify requirements, to become an MMOU signatory.

The Commission sits on a screening panel that assesses MMOU member applications.

We made nine new requests for information under the IOSCO MMOU and/or bilateral MOUs and responded to 10 requests under the IOSCO MMOU.

Financial Crisis Advisory Group

As chair of IOSCO's Executive Committee, Jane Diplock was appointed to the Financial Crisis Advisory Group (FCAG) set up in December by the International Accounting Standards Board and the United States Financial Accounting Standards Board.

The group will advise the two boards about standards-setting implications of the crisis and potential changes to the global regulatory environment. It met five times during the year and was due to report its recommendations in July 2009.

New Zealand's international profile

The Commission's and chairman's IOSCO roles raise New Zealand's profile in the international financial community.

We work with the Ministry of Foreign Affairs and Trade and New Zealand Trade and Enterprise to create opportunities for the chairman to promote New Zealand as an attractive investment destination. While undertaking her IOSCO and FCAG commitments, the chairman promoted New Zealand's well-regulated securities market to overseas business audiences on 12 occasions.

In March, the Commission hosted a visit by the China Securities Regulatory Commission. The delegation was particularly interested in New Zealand's regulatory framework, stock exchange oversight and corporate governance.

Public understanding

The Commission has a role in promoting public understanding of securities law and practice because well-informed investors are an essential ingredient of robust capital markets.

Communications

Our websites, publications, media releases and speeches informed people on securities markets and their regulation. Six topical articles by the chairman were published in major daily newspapers.

We added a new section to our website with up-to-date information on the financial adviser regulation and implementing the new regime.

Education

We completed our three-year sponsorship of Young Enterprise Trust's Financial Studies Course for senior secondary school students. The course was developed, piloted and marketed to schools, and included teacher resources, teacher training and student study guides. As the New Zealand Qualifications Authority has yet to register all the relevant unit standards, the project was unable to meet all pre-set measures of success.

Given prevailing market conditions, the Commission addressed investment risk issues by updating our Look Learn Invest website and commencing an online campaign to promote it.