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Statement of Intent 2009-2012

Operating intentions

The Commission's outputs under the Crown Entities Act define our work. Each output is described below together with the outcome it contributes to, the objectives to be achieved and the measures of achievement. These are the Commission's main non-financial measures for the period of this Statement of Intent.

As well, following each output the Commission has set a medium term measure of its impact on the relevant outcome.

Outcome High standards of conduct are expected in the markets and the law is complied with
Output 1 Market surveillance and enforcement Monitoring securities market activity, inquiring into suspected breaches of securities law and taking actions to enforce the law
Objectives	Measures
Surveillance work corrects identified deficiencies and communicates the Commission’s expectations of standards of conduct in the market and the requirements of the law Surveillance and enforcement work is targeted at those issues most likely to deter bad practices in key areas Our enforcement actions achieve the desired regulatory results	The Commission will have achieved its Surveillance and Enforcement objectives when in 90% of surveillance cases where deficiencies are identified the desired regulatory result is achieved and its resources are applied in accordance with its market surveillance and enforcement priorities and the Commission achieves the desired regulatory result in at least 80% of enforcement actions

Medium term performance towards the outcome
High standards of conduct are expected in the markets and the law is complied with

The impact of our surveillance and enforcement work on this outcome will be indicated if follow up assessments after reviews and enforcement action show improved compliance with the law.

Outcome High standards of conduct are expected in the markets and the law is complied with
Output 2 Oversight and supervisiont Oversight of NZX’s performance of its regulatory function and preparation for potential supervisory roles under Government reforms
Objectives	Measures
NZX properly fulfils its regulatory role in the market The Commission is ready to fulfil new statutory roles including under the Financial Advisers legislation	NZX responds constructively to all recommendations in the Commission’s annual review of NZX’s performance of its regulatory role The Commission has, within the funding available, put in place the people, training, procedures and infrastructure to implement new law when it comes into force

Medium term performance towards the outcome
High standards of conduct are expected in the markets and the law is complied with

The impact of our work in oversight and supervision on this outcome will be indicated if

few recommendations need to be made to NZX in significant areas, and NZX takes action in response to the Commission’s recommendations, and
the Financial Advisers legislation is successfully implemented and the Commission is equipped to take on roles under that law

Outcome The regulatory environment is relevant and effective
Output 3 Law and practice reform Reviewing securities law and practice and making recommendations for reform
Objectives	Measures
Provide robust advice to Government to give priority to reforms needed to address shortcomings in the law identified through the Commission’s work High quality advice and assistance is given to the Government’s financial services policy development	The Commission will have achieved its Law and Practice Reform objectives when advice given seeks priority for reforms to address identified shortcomings in regulation of financial advisers, disclosure about investment products, issues identified by FSAP, and auditor oversight and the quality, quantity, and timeliness of advice and assistance to the Ministry of Economic Development’s reform programmes satisfy the Commission and the MED

Medium term performance towards the outcome
The regulatory environment is relevant and effective

The impact of our law reform work on this outcome will be indicated if laws are enacted to address shortcomings identified to Government by the Securities Commission.

Outcome Securities law regimes are tailored to the needs of the markets
Output 4: Exemptions and authorisations Deciding on applications for exemption from relevant laws Deciding on applications for authorisation of market participants, e.g. futures exchanges and dealers, trustees and statutory supervisors Reviewing existing exemptions and authorisations
Objectives	Measures
Decisions on exemptions and authorisations are clearly based on the policy of the law while meeting the needs of the market Applications are completed within the agreed time	The Commission will have achieved its Exemptions and Authorisations objectives when it has published a Statement of Reasons as part of each exemption notice which explains the policy basis for the Commission’s decision and dealt with all applications for exemptions and authorisations within the time agreed with the applicants

Medium term performance towards the outcome
Securities law regimes are tailored to the needs of the markets

The impact of our exemptions and authorisations work on this outcome will be indicated if five yearly reviews and consultation on class exemptions notices indicate that these are relevant and useful to market participants.

Outcome New Zealand’s markets and regulatory environment are respected internationally, creating a climate for increased investment and good relationships with overseas regulators
Output 5 International cooperation and recognition Promoting New Zealand’s markets as well regulated, keeping abreast of developments in global standard-setting and contributing the Commission’s views to this process
Objectives	Measures
The Commission’s high profile and good standing in IOSCO and its contribution to IOSCO’s work are maintained and opportunities leveraged from these to promote New Zealand as a well-regulated market internationally The Commission participates in and promotes use of international MOUs to facilitate effective cooperation and enforcement The Commission promotes the furthering of the trans-Tasman Single Economic Market agenda and maintains a strong relationship with ASIC The Commission promotes the development of the New Zealand capital markets and facilitates cross-border investments	The Commission will have achieved its international cooperation and recognition objectives when it has taken part in all relevant IOSCO meetings and working groups and taken all opportunities identified with MFAT & NZTE while on IOSCO engagements to promote New Zealand as a well regulated market in which investors can have confidence and received positive assessment from IOSCO of the Commission’s work towards IOSCO’s strategic goal for the MMOU and met regularly with ASIC and cooperative work is completed to agreed standards and timeframes and promoted the development of the New Zealand capital markets

Medium term performance towards the outcome
New Zealand’s markets and regulatory environment are respected internationally, creating a climate for increased investment and good relationships with overseas regulators

The impact of our international work on this outcome will be indicated if cooperation is forthcoming from other regulators when needed for our enforcement work.

Outcome People understand the law and practice relating to securities
Output 6 Public understanding Promoting public understanding of the law and practice relating to securities
Objectives	Measures
Investors and potential investors, intermediaries and market participants understand securities law and securities market practices that are applicable to them The public and news media are aware of the work and views of the Commission Communications maximize regulatory impact	The Commission will have achieved its Public Understanding Objectives when initiatives meet pre-set measures of success to 90% and significant regulatory actions are communicated

Medium term performance towards the outcome
People understand the law and practice relating to securities

The impact of our public understandingwork on this outcome will be indicated if our communications initiatives succeed in delivering information to their target audiences

How we will work with others

The Commission's stakeholders are:

the Minister of Commerce
the Ministry of Economic Development
investors (both domestic and international), news media, and the general public
bodies supervised by the Commission including stock and futures exchanges and trustees
securities markets participants (issuers of securities, brokers, futures dealers, market analysts, investment advisers, financial intermediaries, debt security trustees and statutory supervisors of participatory securities)
advisers to market participants (lawyers, accountants and auditors)
other New Zealand regulators and enforcement agencies (the Companies Office, Takeovers Panel, Reserve Bank of New Zealand, Serious Fraud Office, Commerce Commission, New Zealand Police)
overseas regulators
Parliamentary Counsel Office.

Our policy on stakeholders is published at www.seccom.govt.nz/about/stakeholder-policy.shtml

We work with the Minister of Commerce and the Ministry of Economic Development, in accordance with our statutory functions and powers, on policy, regulatory matters, law reform, and appropriations. We report to the Minister under the Crown Entities Act.

We work with the Ministry of Foreign Affairs and Trade and New Zealand Trade and Enterprise in relation to our international activities.

Under the Securities Markets Act we have a co-regulatory role with the NZX over the markets operated by that exchange. NZX is currently the sole registered exchange in New Zealand.

Under proposed new responsibilities the Commission may supervise trustees.

We also work with other government agencies including the Registrar of Companies, Reserve Bank of New Zealand, Serious Fraud Office, Parliamentary Counsel Office, Commerce Commission, Retirement Commission, Police, State Services Commission, as appropriate and in accordance with our statutory functions and powers.

We work with overseas securities regulators and agencies in accordance with the IOSCO MMOU, bilateral MOUs and applicable law.

We also work with a variety of industry organisations and professional bodies.

The Commission will adhere to the principles of the Stakeholders Policy when dealing with stakeholders, including acting with a high degree of professionalism and skill. The Commission will be aware of the responsibilities of other regulators of the financial markets and will work with them to achieve well-regulated securities markets. The Commission will communicate with other New Zealand regulators to achieve mutual goals and to maximise efficiencies and minimise duplication of effort.

Possible changes to our operating environment

Aspects of securities regulation are currently under review by Government (see Legislative environment). Reforms arising from these reviews may give the Commission additional responsibilities within the period of this Statement of Intent. Meeting any such responsibilities may mean changes to the Commission's operating environment.

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