Tuesday, 6 November 2001 Media Statement

Securities Markets and Institutions Bill

The government has taken another step towards improving confidence in the New Zealand share market with the tabling for introduction of the Securities Markets and Institutions Bill.

“The introduction of this Bill is a key step towards the implementation of an effective and credible framework for the operation of New Zealand’s securities markets,” Paul Swain said.

“The Bill strengthens the monitoring and enforcement of securities market law, requiring greater disclosure and more effective enforcement of breaches of the law.

“The government has already made significant advances through the implementation of a Takeovers Code. However, effective and efficient monitoring and enforcement of securities law is also vital to the integrity of the market. The Bill will strengthen both domestic and international confidence in our securities market law and institutions.

“The changes also bring our law and institutions more in line with Australia, particularly in key areas such as continuous disclosure and the enforcement of insider trading. This makes it easier for businesses to work in a trans-tasman environment and see the benefits of operating in a larger market, and it is consistent with the principles of the MOU on Business Law Co-ordination between Australia and New Zealand.

“I anticipate that the Bill will come into force next year.

The key changes to be introduced by the Bill are:

- Statutory requirements for listed entities to disclose price sensitive information and for directors and officers to disclose securities trading at the time it occurs;
- The establishment of the Securities Commission as a civil enforcement body for insider trading and new disclosure requirements and increased investigative powers for the Commission and the Takeovers Panel.
- New obligations for securities exchanges to provide information and assistance to the Commission, and for the approval of the rules of securities exchanges;
- An ability for the government to impose percentage ownership limits on securities exchanges, and a power of direction for the Commission over the activity of exchanges;
- A framework that will allow the implementation of agreements by countries to mutually recognise offer document requirements, reducing compliance costs for cross-border offers.

Paul Swain said a fundamental review which considers changes to insider trading law, the implementation of market manipulation law, criminal penalties and improvements to current securities law remedies is also underway.

Discussion documents on these issues will be released in the next few months.

ENDS

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