Report on compliance by registered banks with the Securities Act 1978

In its most recent newsletter, the Securities Commission says it has found that most banks are aware of their statutory obligations to ensure that customers receive investment statements before applying for term deposits and other investment products.

The Securities Commission's latest quarterly newsletter comments on a report published by the Commission in March, which dealt with compliance by registered banks with the requirement of the Securities Act 1978 to provide investment statements.

The Commission began its report after finding that some banks were advertising term investment products in such a way that investors could subscribe for the products without first receiving an investment statement.

Banks are required to make sure that investors receive investment statements before subscribing for debt securities such as term deposits and other types of investment accounts.

The Commission found that most banks were aware of the legislative requirements, and had adequate processes to ensure compliance.

However, some banks noted areas where their compliance systems could be improved, and one bank did not have an investment statement for its term investment products.

For more information, see www.seccom.govt.nz.

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