Statement of Intent 2006 - 2009

Strategic direction - for the 3 years to 30 June 2009

The Commission has a formal planning process and a strategic plan. The planning process includes a risk-based assessment of the Commission's areas of responsibility which enables it to efficiently allocate its resources and prioritise its activities.

The strategic plan is kept under active review. Some aspects of securities regulation are currently under review by the government. These include financial intermediaries, the wider law relating to financial products and providers, and anti-money laundering supervision. It is likely that reforms arising from these reviews will impact upon the Commission's strategic plan within the period of this statement of intent.

The Commission's strategic plan for the next three years sets out the outcomes it seeks to contribute to, and the main objectives it expects to achieve in six key result areas. These are explained below, together with the measures we intend to use to judge our success.

Key result area 1 - Enforcement

The Commission undertakes work to enforce securities laws. Other agencies and securities holders also have roles in securities law enforcement. The outcome we aim to contribute to is that bad market practice is seen to be unacceptable and the law is complied with, thereby contributing to the integrity of New Zealand's securities markets.

The Commission has determined objectives to be achieved to contribute to this outcome during the next three financial years. They include:

Objective - enforcement work is targeted at those issues most likely to deter bad practice in key areas of market practice.

Objective - our actions are seen to have been effective under our enforcement powers.

Objective - our responses to enforcement requests from overseas regulatory bodies are provided on time.

The Commission will have successfully achieved these objectives when it has:

• taken appropriate enforcement action if a person has failed to comply with the securities laws;
• in each case, achieved the desired regulatory outcome;
• provided responses to enforcement requests from overseas regulatory bodies within the agreed timeframes.

Key result area 2 - Monitoring and market oversight

The Commission monitors the securities markets and has statutory oversight of offerings of securities to the public, the behaviour of market participants, and the role of the NZX as regulator of the stock exchange. The outcome we seek to contribute to is that the integrity of and confidence in the markets are maintained and improved.

The Commission has determined objectives to be achieved to contribute to this outcome during the next three financial years. These include:

Objective - monitoring and market oversight work is targeted at those issues most likely to deter bad practices in key areas.

Objective - NZX fulfils its regulatory role in the market.

Objective - stakeholders, including co-regulators, fulfil their responsibilities in accordance with the law.

The Commission will have successfully achieved these objectives when it has:

• communicated to stakeholders the Commission's views on that stakeholder's proper role and conduct in the market;
• taken appropriate action if a stakeholder fails to fulfil its responsibilities;
• achieved the desired regulatory outcome in each case where action is taken;
• conducted and reported on its oversight review of NZX, and followed up any areas identified as requiring attention.

Key result area 3 - Law and practice reform

The Commission reviews and comments on law and practices relating to securities. The outcome we seek to achieve is that the regulatory environment is relevant and effective.

The Commission has determined objectives to be achieved to contribute to this outcome during the next three financial years. They include:

Objective - a regime is in place for financial intermediaries which is relevant and enforceable.

Objective - securities law is up-to-date and useful and meets IOSCO principles.

Objective - there are appropriate standards of regulating financial reporting practices of issuers and appropriate auditor oversight.

The Commission will have successfully achieved these outcomes, or contributed to their successful achievement, when it has:

• communicated to government relevant recommendations for law reform;
• commented on relevant government discussion documents and draft legislation;
• participated in industry consultation on potential regulatory roles.

Key result area 4 - Exemptions and authorisations

The Commission grants exemptions from aspects of securities law, subject to conditions that reflect the spirit of the law, and authorises certain market participants. The outcome we aim to contribute to is that securities law regimes are tailored to the needs of the markets.

The Commission has determined objectives to be achieved to contribute to this outcome during the next three financial years. They include:

Objective - all exemptions and authorisations are completed within the agreed time.

Objective - an effective regime is in place to regulate approval of trustees and statutory supervisors and authorisation of futures dealers.

The Commission will have successfully achieved these objectives when it has:

• dealt effectively with applications for exemptions and authorisations within the time agreed with the applicants;
• introduced and communicated an effective regime for authorisations.