Impending securities and money-laundering reform in New Zealand

David Craig (partner, Bell Gully), Butterworths Journal of International Banking and Financial Law, May 2005

In two recent initiatives, the Government has signalled impending law reform that will impact on the finance and securities sector.

Securities Legislation Bill

This Bill amends the provisions of the Securities Markets Act 1988 relating to insider trading, including imposing criminal liability, and the insider conduct prohibitions purport to extend to cover trading in futures contracts.

The Bill also introduces three market manipulation offences: making misleading statements, causing misleading appearance of trading, and generally engaging in misleading conduct.

The Investment Advisers (Disclosure) Act 1996 will be replaced under this Bill with a new regime that requires investment advisers and investment brokers to give their clients a disclosure statement before giving them advice.

Money laundering

In February 2005, the Government announced new laws to counter money laundering. The legislation to be introduced will include a registration regime for those providing money transfer or currency change services and will require financial institutions to implement internal anti-money laundering systems.

The Government is also considering a regime that would require directors and senior managers of certain non-bank financial institutions to be evaluated to ensure that they meet the "fit and proper persons" criteria.

Enquiries and information

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