Financial reports reviewed
Alastair Boult, Chief Accountant
Financial reports of 40 issuers with balance dates from 30 June 2005 to 31 March 2006 were reviewed in cycle 4 of the Commission’s Financial Reporting Surveillance Programme. Nine issuers were early adopters of New Zealand Equivalents to International Financial Reporting Standards (NZ IFRS).
"The Commission is pleased with the cooperation from issuers and their willingness to improve the quality of their financial reporting," Chief Accountant, Alastair Boult says. "The level of compliance for the early adopters of NZ IFRS was generally good."
The Commission wrote to 17 issuers and reached satisfactory agreement on 85% of matters raised. Three significant matters are being followed up separately.
The review also identified issues relating to non-disclosure in annual reports of waivers granted by the stock exchange. One matter was referred to NZX and two others were referred to NZX Discipline Special Division.
"We published the report to help issuers who want to improve the quality of their financial reporting, particularly those adopting NZ IFRS," Alastair Boult says.
The Review of Financial Reporting by Issuers - Cycle 4 is available on the Commission’s website www.seccom.govt.nz
Financial Reporting Act Exemptions
Overseas issuers can get relief from some of the obligations to prepare and register financial statements in New Zealand that comply with the Financial Reporting Act 1993 (FRA), under a new exemption power of the Commission.
The FRA’s section 35A gives the Commission powers to grant exemptions, subject to conditions, from provisions of sections 8 to 11, 13 to 16, 18, 36A and 38 to overseas issuers.
The Commission granted its first exemption under this provision in June. This allows United States incorporated companies who only issue in New Zealand under the Securities Act (Overseas Employee Share Purchase Schemes) Exemption Notice 2002 or the Securities Act (Overseas Listed Issuers) Exemption Notice 2002, to file in New Zealand the group financial statements prepared under US law.
Another change to the FRA will mean that any recipient of money from a conduit issuer will itself be an issuer for the purposes of that Act. The new obligations come into force on 11 August 2007 and will apply to issuers who offer securities after that date. Section 4B of the FRA allows the Commission to exempt entities or classes of entities from being issuers under this new provision. Formats for applying for section 35A and section 4B exemptions are available from the Commission’s website www.seccom.govt.nz.
More IOSCO members signed on to the IOSCO MMOU
50% of regulator members of IOSCO have either signed the IOSCO Multilateral Memorandum of Understanding (MMOU) or have committed to meet the requirements to become full signatories.
The IOSCO MMOU enables members to exchange information in cross-border enforcement cases to combat international fraud. The Commission was accepted as a signatory in 2003 after rigorous scrutiny, and has made use of the IOSCO MMOU eight times in the past year.
Members have set a deadline of January 2010 for all member regulators to join the IOSCO MMOU. IOSCO assists members to meet the standards to become signatories through expert advisers, training programmes and arranging finance for law reform projects.
IOSCO also encourages members to implement the Objectives and Principles of Securities Regulation. These principles aim to protect investors,
ensure that markets are fair, efficient, and transparent, and reduce systemic risk.
IOSCO reports
The following recently released reports are available from www.iosco.org:
- Multi-jurisdictional Information Sharing for Market Oversight - Final Report (Technical Committee)
- Special Purpose Entities (Technical Committee)
- Survey on the Regulation of Non-Audit Services Provided by Auditors to Audited Companies (Technical and Emerging Markets Committees)
- International Disclosure Principles for Cross-Border Offerings and Listings of Debt Securities by Foreign Issuers - Final Report (Technical Committee)
|
The views expressed in The Bulletin do not necessarily represent the formal views of the Securities Commission, whether on securities or other matters.
THE BULLETIN JULY 2007