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Statement of Intent 2009-2012

Who we are and what we do

Commission Members

Commission Members are appointed by the Governor-General on the recommendation of the Minister of Commerce. They are usually appointed for five years, and may be reappointed. Members are chosen for their knowledge and experience of the securities markets. One Member must be an experienced lawyer.

Currently there are ten Members. The Chairman works full time. The other nine Members attend one full Commission meeting per month and meet in divisions as required to handle the business of the Commission. Divisions have the full powers of the Commission. Profiles of Commission Members are published at www.seccom.govt.nz/about/#6.

Staff

We estimate 44 staff on 30 June 2009 including lawyers, accountants, investigators and support staff. We work in cross-disciplinary teams to deal with particular matters.

Nature and scope of our functions and intended operations

The nature and scope of our functions and operations are defined by the Securities Act 1978 which establishes the Commission. They include:

to keep under review the law relating to bodies corporate, securities and unincorporated issuers of securities and to recommend changes to the Minister of Commerce
to keep under review practices relating to securities and to comment on these
to cooperate with overseas securities commissions
to keep under review securities markets activities and to comment on these
to advise the Minister of Commerce on conduct rules proposed by securities exchanges
to promote public understanding of the law and practice of securities
to provide administrative and support services to the Takeovers Panel
to perform any other function conferred by law.

To perform these functions we have a number of powers, including:

to receive evidence as to securities law and practice, with power to summons people and documents and to carry out inspections
to ban misleading and illegal offer documents and advertisements
to take court action in respect of misleading or illegal offers
to enforce insider trading, market manipulation and substantial security holder law
to enforce continuous disclosure law and to make orders requiring disclosure by issuers
to enforce disclosure obligations of investment advisers and brokers and to make orders requiring disclosure by investment advisers and brokers
to require an exchange to provide information and assistance to the Commission
to accept enforceable undertakings
to publish reports and comments
to make orders requiring disclosure by unregistered exchanges
to exempt persons from compliance with provisions of the Securities Act or Regulations under the Act
to authorise certain market participants
to recommend law reform
to hear appeals against certain decisions of the Registrar of Companies.

For other legislation the Commission works with see www.seccom.govt.nz/about/laws.shtml.

Classes of output

The Commission has two classes of output:

performance of securities market functions (Vote Commerce) in the Appropriations; and
Securities Commission litigation fund (Vote Commerce).

Outcomes, objectives, impacts and outputs

In relation to the performance of securities market functions, the Commission has identified five outcomes that will benefit the New Zealand securities markets, namely:

high standards of conduct are expected in the markets and the law is complied with
the regulatory environment is relevant and effective
securities law regimes are tailored to the needs of the market
New Zealand's markets and regulatory environment are respected internationally
people understand the law and practice relating to securities.

The Commission contributes to, or impacts on, these outcomes through its short and medium term objectives. These objectives are measurable and will determine the Commission's work during the term of this Statement of Intent. The work will be delivered via the Commission's outputs which align with the functions for which the Commission is funded through the Vote Commerce.

The Securities Commission litigation fund contributes to the achievement of our enforcement objectives and the associated outcome.

Delivering outputs for the 3 years to 30 June 2012

The Commission has a planning process which culminates in a three-year strategic plan. This enables the Commission to efficiently allocate its resources and to set its work priorities. The strategic plan is kept under review during the year and formally reviewed when a new Statement of Intent is prepared. The strategic plan for the three years to 30 June 2012 sets out the detailed work to be undertaken (under each output) to achieve all the objectives, including the work arising from the objectives highlighted in this Statement of Intent. This work will contribute to the outcomes the Commission seeks for New Zealand's securities markets. The details of this work, and how performance will be measured, are provided in the Statement of Forecast Service Performance on page 32 of this Statement of Intent.

The diagram shows the linkages between outcomes, objectives, impacts and outputs.

Future developments

Major reforms to securities law have been enacted and are being implemented (Financial Advisers Act) while further reforms are still under consideration by the Government. These reforms will add significantly to the role and responsibilities of the Commission. Some of these, including the Financial Advisers regime, will be in place during the period of this Statement of Intent. Others may not take effect until later, but the Commission is planning for these so it will be ready to fulfil its future roles.

The Commission has amended and agreed on its outputs to meet the possible requirements of Government and to alert the Minister to the anticipated costs of any additional responsibilities it may be required to assume. They are:

market surveillance and enforcement
oversight and supervision
exemptions and authorisation
law reform
international cooperation and recognition
public understanding and market presence.

The Government's current reform project relating to Anti Money Laundering and Countering the Financing of Terrorism (AML/CFT ) proposes a supervisory role for the Commission. As the new law may be in force during the period of this Statement of Intent, the following chart includes a potential new outcome and output relating to AML/CFT supervision.

View full-size chart

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