Successful outcome in National Property Trust case A court case taken by the Securities Commission against The National Property Trust Limited was brought to a successful conclusion recently. The case concerned non-disclosure of substantial security holdings. The National Property Trust Limited had acquired a relevant interest in around 16 percent of the securities in the National Property Trust, a listed unit trust. The interest arose under an agreement made in 2002 with another unit holder. The agreement gave The National Property Trust Limited certain rights concerning sale of those units, and imposed constraints on voting the securities in some situations. This interest was not disclosed to the market until 2004. Court proceedings began in the High Court in April and ended in July, when a settlement of the issues was agreed to between the company and the Commission. As a result, The National Property Trust Limited relinquished its interest in the unit trust securities that had not been disclosed to the market at the time it was acquired. This was the first such case to be brought by the Commission for a number of years. The Commission had been constrained in the past by a lack of resources for litigation, said Liam Mason, General Counsel. Liam Mason, General Counsel "Effectively this meant that the only redress to those affected would have been to take court action themselves. "However, we now have a dedicated fund for litigation, and increased capability in terms of staffing and other resources." For further information on the case, see the Commission's news release of 19 August 2004 on our website. Fraud education campaign in Tauranga cont... price. Another common fraud is when a person who has their own home is persuaded to borrow money against the equity in their home, to finance a friend or relative into a house. The Commission will explain how to identify and avoid affinity fraud, where the fraudster takes advantage of the trust that exists within a group of people with common interests or beliefs. People will also be told to "hang up on overseas telephone callers offering to sell or buy shares". Community, business and professional groups, and news media will be invited to the campaign launch hosted by the Tauranga City Council. The campaign will continue with media coverage, advertising, and speaking engagements over the next few weeks. The Commission's brochures, You can help stop fraud, How to spot a scam, Your right to know - get informed about investing and How to choose an investment adviser, are available from www.seccom.govt.nz. The SFO website, www.sfo.govt.nz, has information about Advance Fee Fraud and Prime Bank Instrument Fraud. Enforceable undertakings Enforceable undertakings are a useful mechanism for resolving breaches of securities law. The undertakings can be enforced by the courts, and the Commission also reserves the right to take other action as required. Enforceable undertakings are posted on our website. Since the July issue of The Bulletin, the Commission has accepted an undertaking from LDC Investments Limited (3 September 2004).    Annual Report Copies of our 2004 annual report are available from the Commission on request, or from our website. Access Brokerage inquiry cont... Under the Securities Markets Act 1988 the Commission and NZX have co-regulatory roles in relation to securities markets. NZX is the frontline regulator, responsible for operating its markets in accordance with its conduct rules. The Commission is the statutory regulator with an oversight responsibility for securities markets and registered exchanges. This includes oversight of the performance by NZX of its regulatory responsibilities. NZX is investigating whether, as a result of the collapse of Access Brokerage, there have been any breaches of its conduct rules and if so, will take action in respect of those breaches. NZX is also undertaking a review of client funds accounting at all NZX Firms and intends to review its conduct rules in respect of client funds accounting. The Commission supports the steps that NZX is taking. The Commission's inquiry, in its role of oversight of NZX's performance of its regulatory responsibilities, is essential to demonstrate an effective co-regulatory system. The Securities Commission considers that this oversight, together with the steps being taken by NZX, will provide the public with confidence in the actions being undertaken to guard against failures like Access Brokerage in the future.

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THE BULLETIN October 2004

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