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Annual Report 30 June 1998

Title Page Statement of Purpose Notable Events Members Chairman's Review Chief Executive's Report Work Programme 1998/99 Financial Statements Statement of Objectives Statement of Service Performance Report of Audit Office Staff

Statement of Purpose Notable Events Members

Statement of Purpose

Our purpose is to foster capital investment in New Zealand by:

• Promoting the efficiency of the New Zealand securities markets,
• Enhancing the integrity of these markets,
• Promoting the cost-effective regulation of these markets,
• Strengthening public and institutional confidence in these markets, both in New Zealand and overseas.

To achieve this purpose we direct our work to promoting:

• Good standards of disclosure,
• Reliable and ethical procedures for effecting transactions,
• Flexibility in development of best regulatory practice,
• Sound principles for market regulation,
• Cost-effective rules of law,
• Improved compliance with the law,
• Closer relations with overseas regulators,
• Public understanding of the law and practices of securities.

Notable Events

Parliament:

• Brought into force law to provide for the new Investment Statement and to apply securities law more fully to life insurance, superannuation and unit trusts,
• Brought into force law to apply disclosure obligations to investment advisers,
• Enacted law to provide more flexible administrative procedures for the Commission.

Government:

• Held a national referendum on retirement savings,
• Undertook a review of the role and functions of the Commission,
• Enacted regulations relating, in particular, to the new Investment Statement and to registered prospectuses for life insurance, superannuation and unit trusts.

The Commission:

• Undertook a review of all existing exemption notices,
• Developed new exemptions, among others, for registered banks, superannuation schemes, resident-funded retirement village schemes, group investment index funds and property investment schemes,
• Led a project on competition policy and securities market regulation with the Malaysian Securities Commission and the Hong Kong Securities and Futures Commission as a working group of the Asia Pacific Regional Committee of IOSCO,
• Undertook many inquiries, in particular, on insider trading and financial reporting practice,
• Undertook increased inquiries on behalf of overseas securities commissions,
• At the request of the New Zealand Stock Exchange recommended FASTER system for the electronic transfer of securities, that is, scripless trading,
• Undertook a review of the practices of life insurance companies,
• Established the Commission's quarterly Bulletin.

Members

The Securities Commission consists of not less than 5 nor more than 10 Members appointed by the Governor-General on the recommendation of the Minister of Commerce. Members hold office for a term not exceeding 5 years. There are no statutory qualifications for membership, except that the Chairman must be a barrister or solicitor of not less than 7 years' practice.

Commission Members are chosen having regard to their qualifications, experience and skill in the public market for securities. One Member, Mr J M Robson, retired during the year and one new Member was appointed, Mr S L Franks.

There were 12 regular monthly meetings and 66 quorum meetings. There were an additional 46 resolutions in writing, many of these arising from telephone conferences.

There are at present 9 Commission Members. They are:

Mr Euan H Abernethy LL.B. Chairman of the Commission since April 1995 Professional: Partner of Bell Gully Buddle Weir (and predecessor firms) 1962 to 1995, where his areas of legal practice included securities, company, banking and finance law.	Mr Falcon R S Clouston B.Agr.Sc (Agricultural Economics). Sharebroker, Wellington Directorships: Credit Suisse First Boston, Tower Trust Services Limited. Professional: Member of Government Taskforce on Private Provision for Retirement 1991/1992, Member of New Zealand Stock Exchange.	Mr Ian F. Farrant B.Com Accounting/Marketing), FCA. Company Director, Dunedin. Directorships: The New Zealand Salmon Company Limited (Chairman), Broadway Industries Limited (Chairman), Fulton Hogan Limited (Chairman), Direct Capital Partners Limited (Chairman), Paynter Timber Group Limited (Deputy Chairman), New Zealand Refining Co Limited (Chairman), Westpac Trust Corporation, St Lukes Group Limited, Queenstown Airport Corporation Limited, City Forests Limited. Also a director of a number of private companies. Professional: Member of Ministerial Committee of Inquiry into the Sharemarket The Russell Committee) 1988/1989.
Mr Anthony N. Frankham FCA, FIOD, AAMINZ, AC Inst Arb. Chartered Accountant, Auckland, with own specialist financial investigating practice. Directorships: Allstate Explorations NL (Australia), Auckland International Airport Limited, Direct Capital Partners Limited, Otter Gold Mines Limited, ProCare Health Limited. Professional: Chairman of Disciplinary Tribunal of Institute of Chartered Accountants of New Zealand, Council Member of Arbitrators & Mediators Institute of New Zealand, Past President of New Zealand Society of Accountants.	Mr Stephen L Franks BA, LL.B(Hons), Dip. Acc. Solicitor, Wellington, specialising in corporate and securities law. Directorship: Wrightson Limited. Professional: Partner of Chapman Tripp, Member, Market Surveillance Panel of the New Zealand Stock Exchange since 1989, Council Member of Institute of Directors in New Zealand (Inc.), Past Convenor, New Zealand Law Society, Commercial and Business Law Committee.	Ms Elizabeth M. Hickey M.Com (First Class Honours), FCA. Chartered Accountant, Auckland. Professional: Partner and National Director - Accounting of Ernst & Young, Chairman of Financial Reporting Standards Board of Institute of Chartered Accountants of New Zealand.
Ms Joanna M.G. Perry MA (Cantab), FCA (ICAEW), CA (ICANZ). Chartered Accountant, Auckland. Professional: Partner of KPMG, Member of Financial Reporting Standards Board of Institute of Chartered Accountants of New Zealand.	Mr David J. Stock LL.B. Solicitor, Christchurch, specialising in corporate and securities law. Directorships: Carter Group Limited, Christchurch City Holdings Limited, Marsh & McLennan Limited, Shotover Jet Limited (Chairman), Solid Energy New Zealand Limited (Chairman). Professional:Partner of Chapman Tripp. Awards: OBE (1991).	Mr Michael R. H. Webb LL.B, AAMINZ. Barrister, Wellington, specialising in corporate, banking and securities law. Directorships: Chairman of Learning Media Limited. Professional: Joint Convenor New Zealand Law Society/Institute of Chartered Accountants of New Zealand Joint Insolvency Committee, Past Convenor New Zealand Law Society Commercial and Business Law Committee, Member of Pacific Economic Co-operation Council Financial Markets Development Project Group.