Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search

 

UPDATE: NZ Shareholders' Assn elevates concerns

UPDATE: NZ Shareholders' Assn elevates capital market concerns to PM

(Adds FMA comment in 7th and 8th paragraphs, removes ambiguity in 3rd paragraph)

By Paul McBeth

Sept. 19 (BusinessDesk) - The New Zealand Shareholders' Association has elevated its concerns about dwindling confidence in capital markets to the very top - the prime minister.

The retail investor lobby group has already met with Finance Minister Grant Robertson and Commerce Minister Kris Faafoi to convey its worries about declining market confidence. Now it has raised the stakes by writing to Prime Minister Jacinda Ardern.

NZSA chair John Hawkins said the Reserve Bank and Financial Markets Authority's investigation into failed insurer CBL Corp had exacerbated the association's pessimism because it appeared the two organisations couldn't agree on how to pursue the probe. A major issue was over what to disclose to the market, he said.

"For investors to entrust their savings to New Zealand’s capital markets, whether directly or in managed funds (including KiwiSaver), they must have confidence in the systems that protect them," Hawkins wrote. "NZSA is apolitical and in our view, a notable part of the problem is public perception that the market regulators are ineffective, and so investment in these productive areas is too risky."

Hawkins urged the prime minister to take whatever action is required to ensure the regulators cooperate to sort out problems quickly.

The FMA said enforcing laws for financial markets was complex and every investigation different. That determines the length of time a case can take.

"We understand that can be frustrating. We have taken steps where possible to accelerate decision-making and provide additional resources," a spokesman said in an email. "Throughout all this, we are conscious of the evidential standards required by the law."

It also pointed out CBL was subject to multiple investigations.

Hawkins' letter reiterates a number of issues he raised in his speech to the NZSA annual meeting last month. At the time, he said a lack of oversight of the FMA let it drag its heels over some investigations.

The authority FMA rejected those claims at the time, saying it focuses its efforts where it sees greatest risks to investors and market integrity. In the CBL case, the FMA said it was aware at a high level of the RBNZ's concerns over the insurer's prudential requirements, but didn't have information at hand until early February to seek a suspension of trading.

The fact that a listed company is engaging with a regulator isn't necessarily material information or an indication of wrongdoing, it said.

"There are also considerations around the information that can be made public during an investigation, including the necessity for confidentiality to preserve the integrity of an investigation," the FMA said at the time. "Confidentiality also preserves the rights of firms and individuals under investigation."

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 

Retail: International Websites To Pay GST

New rules would be aimed at imported goods valued at or below $1,000. Customs would retain responsibility for collecting GST on imported parcels valued more than $1,000. More>>

ALSO:

High-Level Advice: PM’s Business Advisory Council Membership Announced

The Prime Minister’s Business Advisory Council brings together a mix of experts, six women and seven men with small to large business experience, from across New Zealand, to provide advice. More>>

ALSO:

Improving: Report Shows New Zealand Air Quality 'Good'

Our air 2018, produced by the Ministry for the Environment and Stats NZ, shows that while some previously known issues persist, progress has been made and levels of some pollutants are declining. More>>

ALSO:

Greenpeace: Govt Extends OMV Exploration Permit

The Government has just granted oil giant OMV a two-year extension to drill in the Great South Basin, despite issuing a ban on new oil and gas exploration permits in April. More>>

ALSO:

Collective Bargaining For Contractors: Working Group's Model For Screen Sector

A recommended model to allow collective bargaining for contractors in the screen sector has today been unveiled by the Government-convened Film Industry Working Group. More>>

ALSO:

Kauri Dieback: DOC Closing Tracks To Protect Trees

The Department of Conservation will close 21 tracks across kauri land to help prevent the spread of kauri dieback. An additional 10 tracks will also be partially closed and the open sections upgraded... More>>