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Bill gives govt backing to settlement systems
Hon Lianne Dalziel
Minister of Commerce, Minister for
Food Safety,
Associate Minister of Justice, MP for
Christchurch East
28 August 2008 Media Statement
Bill gives govt backing to settlement systems
The Settlement Systems, Futures, and Emissions Units Bill was introduced to Parliament today, confirming the government’s commitment to providing an opt-in designation process for settlement systems operating in New Zealand.
The Bill also contains minor changes to the regulation of authorised futures exchanges and technical amendments relating to the legal treatment of emissions units. The Bill will now be referred to select committee where stakeholders will have a further opportunity to contribute to its refinement.
Commerce Minister Lianne Dalziel says she is pleased the Bill has achieved this milestone and is grateful for the contributions received from stakeholders during consultation earlier this year.
Clearing and settlement systems are used to transfer the ownership of an asset such as cash, shares, or commodities like oil.
New Zealand currently has two settlement systems: Austraclear New Zealand run by the Reserve Bank, and NZX’s FASTER system.
Under the proposed Bill, the owner of a settlement system can apply to the regulator for the system to be designated, giving statutory backing to the system’s rules to support finality of settlement. This gives participants in a designated settlement system protection against potential claims by the liquidator of a failed participant. To become and remain designated a settlement system will have to meet international standards.
At present, New Zealand laws only provide for the designation of payment systems (for cash). Under the proposed Bill the designation regime will be extended to settlement systems more generally.
Lianne Dalziel says it's timely to consider how our settlement systems contribute to well functioning capital markets, capital market development, and world class infrastructure objectives.
A copy of the Cabinet paper is available at: www.med.govt.nz.
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