Recent developments

Corporate

Takeovers Panel takes steps to mitigate use of schemes of arrangement for the protection of shareholders
The Takeovers Panel has revoked its class exemption for initial public offers which has been relied upon in some schemes of arrangement involving code companies. This follows the Panel's release of a consultation paper on 4 April 2006 which asked for public responses to a series of questions on the refining of takeover laws to prevent companies avoiding Takeovers Code scrutiny by merging through schemes of arrangement under the Companies Act.

Securities Commission reviews financial reports
The Securities Commission is carrying out an ongoing financial reporting surveillance programme to review the reporting practices of issuers, with the aim of encouraging New Zealand issuers to improve the quality of their financial reporting.

Financial Reporting Act review
Reform of the Financial Reporting Act is scheduled to take place in December.

Registrar of Companies issues further convictions under the Financial Reporting Act
The Registrar of Companies continues to monitor closely companies with obligations to file financial statements under the Financial Reporting Act 1993 and has followed up its findings with a number of recent convictions against directors who have failed to file financial statements on time.

MOU between NZ Companies Office and ASIC
In February 2006 a Memorandum of Understanding was signed by the New Zealand Companies Office and the Australian Securities and Investment Commission (ASIC) to allow for the continued aligning of regulatory functions including the alignment of corporate registration processes, compliance and disclosure activities between both bodies.

Getting on with Business: government takes a fresh look at regulatory frameworks
Commerce Minister, Lianne Dalziel, announced on 22 May 2006 that the government would be undertaking a broad review of the regulatory frameworks governing business in New Zealand.

Capital Markets

New NZX Listing Rules implemented in May 2006
NZX has completed its 2005 review of the NZSX/NZDX Listing Rules. The 2006 amendments came into effect on 10 May 2006, with the exception of specific provisions relating to preliminary announcements and half-yearly reports which come into effect on 1 July 2006.

Securities Commission Oversight Review of NZX
Under the co-regulatory regime created by the Securities Markets Act, the Securities Commission has announced that it will conduct an oversight review of NZX.

Competition and Consumer Protection

Final report released on regulation of mobile termination rates
The Communications Minister has released the Commerce Commission's final recommendations on the regulation of mobile termination rates.

Local loop unbundling: the Government releases its Telecommunications Stocktake Review Paper
The New Zealand Government announced on 3 May 2006 that it would unbundle Telecom's local loop. The Minister of Communications, David Cunliffe, said that legislation will be introduced shortly and expects it to be implemented by the beginning of 2007.

A discussion paper released on New Zealand's consumer protection legislation
The Ministry of Consumer Affairs released an international comparison discussion paper in May 2006 on the Review of the Redress and Enforcement Provisions of Consumer Protection Law. The two key pieces of legislation under discussion are the Fair Trading Act and the Consumer Guarantees Act.

Government to review Parts 4 and 5 of Commerce Act
Commerce Minister, Lianne Dalziel, announced on 22 May 2006 that the Ministry of Economic Development is to review Parts 4 and 5 of the Commerce Act.

Resources and Energy

Discussion Paper released on investment in electricity generation
The Ministry of Economic Development has released a discussion paper examining options to encourage electricity lines companies to make increased investment in generation. Options discussed in the paper include allowing lines companies to trade in electricity hedges, relaxing some arms-length separation rules for lines companies involved in generation, and clarifying parts of the Electricity Industry Reform Act 1998 to help reduce uncertainties about how the legislation is applied in practice.

Electricity Commission rejects Transpower's proposed Auckland 400kV grid investment proposal
On 27 April 2006, the Electricity Commission issued its draft decision on Transpower's grid upgrade proposal to construct a 400kV line linking Whakamaru and Otahuhu by 2010. In response, Transpower has indicated that it will submit a new modified proposal.

Intellectual Property

Copyright changes proposed in discussion paper
In March 2006, the Ministry of Economic Development released a discussion paper called "The Commissioning Rule, Contracts and Copyright Act 1994" as a starting point for submissions and possible legislation changes involving the application of the "commissioning rule" to copyright-protected works such as photographs, art pieces and computer programs.

Trade mark compliance costs under discussion
The Government issued a discussion paper in March 2006 on International Trade Mark Treaties addressing the issue of whether New Zealand should join a number of international trade mark treaties administered by the World Intellectual Property Organization.

Panel to resolve domain name disputes
In March 2006, the New Zealand Domain Name Commissioner announced that an expert panel had been appointed to resolve disputes over .nz domain name registrations. The new system will be available from the date of implementation on 1 June 2006.

Enquiries and information

For more information on any of the cases, articles and features in Commercial Quarterly, please email Diane Graham or call her on 64 9 916 8849.