The Bell Gully Regulator Report lists recent changes, decisions and developments at the main New Zealand and Australian corporate, commercial and competition regulatory bodies. This edition covers the period from 17 August to 10 September 2007. For further details on any matter in this report, just click on the hyperlink below each item.

Ministry of Economic Development (MED)

Submissions on the Review of the Clearance and Authorisation Provisions of the Commerce Act
The MED has released copies of the submissions it received on its Review of the Clearance and Authorisation Provisions under the Commerce Act 1986: Discussion Document. The discussion document relates to sections 58-69B of Part 5 of the Commerce Act which contain provisions relating to the authorisation and clearance of business acquisitions and restrictive trade practices. There are 33 submissions from a range of sectors, including submissions from the Commerce Commission and Bell Gully.
Click here to access these submissions

Regulatory Compliance Guidelines
To ensure that compliance is given adequate consideration in the design and implementation of regulatory proposals the MED has developed Regulatory Compliance Guidelines as part of its Quality Regulation Review. These guidelines are part of the suite of guidance produced by the MED to assist government policy development. They are to be read in conjunction with the Regulatory Impact Analysis Regime Guidelines.
Click here to access these guidelines

Guidelines on Regulatory Flexibility: Reducing Costs through Compliance Choices and Varied Requirements
The MED has released Guidelines on Regulatory Flexibility to assist and encourage those developing policy to consider options for flexibility so as to minimise compliance costs. These new guidelines complement the Guidelines on the Regulatory Impact Analysis Requirements and the other related guidance, such as Guidelines on Assessing Policy Options and Guidelines on Understanding and Assessing Policy Impacts on New Zealand Small to Medium Enterprises
Click here to access these guidelines

Quality Regulation Review - Final Report
On 5 September, Commerce Minister Lianne Dalziel presented the final report of a 15-month review addressing regulatory barriers to business growth. The review investigated ways of eliminating duplication, inconsistencies and uncertainty where multiple regulatory frameworks intersect; and looked at improving government's own processes for assessing and monitoring the impact of regulations. The MED is to implement an ongoing programme of sector studies to ensure continuous improvement of the regulatory environment and a two-year trial of a Business Cost Calculator to quantify the compliance costs of regulation.
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Government tender policy changes
The Government has issued new requirements for government agencies to ensure that their internal documentation of tender short-listing and contract award decisions (for contracts at or above $100,000) includes assurance of compliance with the government procurement policy, which includes justification for the rejection of any New Zealand tender.
Click here to access the Government Procurement in New Zealand: Policy Guide for Purchasers - August 2007

Government to review electricity sector's continuance of supply obligation
The Government has published a discussion document proposing a review of Section 62 of the Electricity Act 1992 - the Continuance of Supply Obligation.
Click here to access the discussion document
Click here to read more from Bell Gully on this topic

New regulations on distributed generation for New Zealand electricity sector
New regulations governing the connection of distributed generation to lines company networks came into effect on 30 August 2007.
Click here to read more from Bell Gully on this topic

Companies Office

Reduced lodgement requirements for companies operating on both sides of the Tasman
On 1 September, complementary legislation enacted by the New Zealand and Australian Governments came into force removing the requirement for companies registered on both sides of the Tasman to lodge certain duplicate information with both the New Zealand Companies Office and the Australian Securities and Investment Corporation (ASIC). The new rules apply to a range of basic company documentation and the Companies Office and the ASIC have jointly designed and built an automated data sharing capability to facilitate the exchange of duplicate data. However, lodgement requirements for companies operating across the Tasman will only reduce where duplication currently exists. Information that is not considered duplicate must still be lodged with both regulatory bodies.
Click here for more on the New Zealand Companies Office changes
Click here for more on the ASIC changes

Securities Commission

New powers proposed for finance company trustees
The Securities Commission has proposed immediate changes to the law to strengthen the position of trustees of finance companies and to assist them to perform their supervisory roles in the interests of investors. Changes to the law to give effect to the new powers will be made by regulations under the Securities Act 1978 on the recommendation of the Securities Commission. The Commission expects to provide its formal recommendations by the end of September.
Click here for details of the proposed additional powers

Independent audit regulation and oversight in New Zealand
In a letter to Commerce Minister Lianne Dalziel, the Securities Commission and the "Big 4" accounting firms highlighted the need for independent audit oversight in New Zealand, in line with international best practice. In their view, New Zealand currently lacks an independent audit oversight structure and has fallen behind other jurisdictions in this regard.
Click here to read the full article

Government consults with finance sector regulator
Commerce Minister Lianne Dalziel has announced she will be taking steps pending proposed law changes aimed at reforming the non-bank finance sector. On 23 August, the Minister met with Securities Commission chair Jane Diplock to discuss the best way forward after the collapse of five finance companies since the start of 2006.
Click here to read the full article

Securities Commission's Annual Report
The Securities Commission has released its Annual Report for 2007.
Click here to access the Annual Report

Securities Act Exemption Notices

The following Securities Act Exemption Notices have been published:

• Securities Act (AMP Capital Investors (New Zealand) Limited) Exemption Notice 2007/221
  This notice exempts AMP Capital Investors (New Zealand) Limited from regulations 3(1) and 7A(1) of the Securities Regulations 1983 in respect of an offer of shares in Summerset Group Limited, subject to the condition that potential investors are advised that AMP Capital remains legally responsible as an issuer.

• Securities Act (One Riccarton Road Limited) Exemption Notice 2007/264
  This notice applies to offers by One Riccarton Road Limited of participatory securities in a contributory scheme for ownership interests in real property located at 1 Riccarton Road in Christchurch. The notice exempts those offers, subject to conditions, from the prospectus and investment statement requirements and various other requirements of sections 33(3), 37, 37A, and 51 to 54 of the Securities Act 1978. The notice expires on 31 July 2012.

• Securities Act (Contributory Mortgage Brokers) Exemption Amendment Notice 2007/266
  This notice amends the Securities Act (Contributory Mortgage Brokers) Exemption Notice 1983 (the principal notice) by:

• inserting an expiry clause providing for the principal notice to expire on 30 September 2012; and

• clarifying that the definition of guarantor includes both a guarantor in relation to the amounts owing under a contributory mortgage and a guarantor in relation to the obligation to repay the securities; and

• clarifying that an advertisement that relates to an offer of an interest in a contributory mortgage may include information that must be disclosed to contributors under the Securities Act (Contributory Mortgage) Regulations 1988 (the Contributory Mortgage Regulations).

• Securities Act (Five Mile Holdings Limited) Exemption Notice 2007/263
  This notice exempts Five Mile Holdings Limited from sections 33(3), 37, 37A, 38A and 54 of the Securities Act 1978 and from the Securities Regulations 1983 (except regulation 8) in respect of the offer of participatory securities in the form of membership of the society which confers rights to participate in the ownership and use of the development undertaken in Frankton Flats, Queenstown. This notice is subject to the condition that potential investors receive important information prior to subscription.

• Securities Act (ING Real Living (Holdings) Limited) Exemption Notice 2007/241
  This notice exempts ING Real Living (Holdings) Limited from clause 10(1)(c) of Schedule 1 of the Securities Regulations 1983 requiring a registered prospectus to contain a prospective statement of cash flows.

To view a list of all of the Securities Act Exemption Notices currently in force click here

Takeovers Panel

Guidance Note about the Role of Independent Advisers for the purposes of the Takeovers Code - Third Edition - August 2007
The Takeovers Panel has updated its guidance note for independent advisers to further assist those who are approved as independent advisers by the Panel for a report under any of rules 18, 21 or 22 of the Takeovers Code or under a class exemption or specific exemption granted by the Panel from the Code. This note replaces the previous guidance note issued by the Panel in July 2003.
Click here to access the Guidance Note

New edition of Takeovers Panel's Code Word September 2007
The Takeovers Panel has issued a Code Word to explain its thinking behind the release of its Guidance Note about the Role of Independent Advisers.
Click here to read Code Word

Takeovers Code Exemption Notices

The following Takeovers Code Exemption Notice has been published for this period:

• Takeovers Code (Utlitco Limited) Exemption Notice (No 2) 2007
  The Takeovers Panel has granted Utlitco Limited an exemption from rule 6(1) of the Code in respect of any increase in the percentage of voting rights in Infratil Limited held or controlled by Utlitco Limited as a result of the acquisition of all the assets of Utilico Investment Trust PLC pursuant to a scheme of reconstruction under the Insolvency Act 1986 (UK).
  Click here for more

Ministry for the Environment

Call-in of Transpower's North Island Grid Upgrade Project
Acting Environment Minister Pete Hodgson announced on 9 August 2007 that he would "call in" Transpower's Notice of Requirements and applications for the proposal under the Resource Management Act (RMA), and would refer decisions about the proposal to a Board of Inquiry. The result of the "call in" is that the Board of Inquiry will hear all submissions and make a decision regarding the designations and consents for the transmission line instead of the nine councils with jurisdiction over land where the line would be built. On 10 September, Minister Hodgson called for submissions on Transpower's application for a new transmission line and all submissions must be received by 5pm on 5 October 2007. Submission forms can be obtained from local councils in Waikato and Auckland, and from the Ministry for the Environment website.
Click here to access the submission forms
Click here to read more from Bell Gully on this topic

Reserve Bank of New Zealand

Reserve Bank to webcast September MPS
The Reserve Bank announced on 6 September that it will webcast its September Monetary Policy Statement news conference live on its website.
Click here for more information on how to access the webcast

Submission on future monetary policy framework
The Reserve Bank has released its submission to the Finance and Expenditure Committee for its inquiry into the future monetary policy framework.
Click here for more

New Zealand Commerce Commission (NZCC)

The NZCC has issued the following media releases:

• Supreme Court affirms Commission's electricity threshold decisions
  The Supreme Court has dismissed a challenge by Unison Networks Limited to the NZCC's thresholds for large electricity lines businesses set in 2003 and 2004. The challenge was based on the Court of Appeal's finding that the first threshold, which required that lines businesses make no increases in their price levels for a period of 20 months, was unlawful. The Court of Appeal held that a "price freeze threshold" did not meet the statutory purpose of promoting the efficient operation of electricity distribution markets because "an inefficient and high charging business could put itself out of reach of the potential for control simply by maintaining its monopoly pricing and low quality service." However, the Supreme Court has found that the NZCC acted lawfully in setting both the initial and the revised thresholds.
  Click here for more
  Click here to access the Supreme Court's decision

Mergers and Acquisitions

• Transpacific Industries applies for clearance to acquire part of Enviro Waste Services
  The NZCC has received two clearance applications from Transpacific Industries Group (NZ) Limited seeking clearance to acquire part of the business and assets of Enviro Waste Services Limited (Enviro Waste). The first application concerns Enviro Waste's solid waste collection businesses in Blenheim and Nelson. The second application concerns Enviro Waste's solid waste businesses in Oamaru and Timaru.
  click here for more

• Transpacific Industries applies for clearance to acquire further parts of EnviroWaste Services
  Following on from the clearance applications noted above, the NZCC received two further applications from Transpacific Industries seeking clearance to acquire EnviroWaste Service's solid waste collection businesses in Christchurch and Dunedin.
  click here for more

• ST Cigar Group cleared to acquire Schimmelpenninck & Tabacofina
  The NZCC has cleared ST Cigar Group Holding BV to acquire all of the shares in Dutch company, Schimmelpenninck and, through ST Cigar Group's Dutch subsidiary company Henri Wintermans Cigars BV, the cigar trademarks owned by the Belgian company Tabacofina - Vander Elst N.V. that are registered in New Zealand, Australia and Portugal.
  click here for more

• Transpacific Technical Services (NZ) Limited cleared to acquire the solvents business of Medi-Chem Waste Services Limited
  The NZCC has cleared Transpacific Technical Services (NZ) Limited (TTS), or a wholly-owned subsidiary of TTS, to acquire the assets and businesses of Medi-Chem Waste Services Limited that relate to the treatment, recycling, and disposal of solvents.
  click here for more

Market Behaviour

• Commission settles with coffee machine distributors over anti-competitive conduct
  The NZCC reached a settlement with Espresso Engineers Limited and Valente Coffee Machinery Limited after they breached the Commerce Act by preventing a reseller from advertising their coffee machines for sale below a specified minimum price.
  click here for more

Telecommunications

• Commission reports to Minister on Telecom's service obligations
  The NZCC has advised the Minister of Communications that Telecom has complied with all its Telecommunications Service Obligations (TSO) quality measures for the 2006/07 financial year.
  Click here for more

• Commission releases June quarterly report on telecommunications markets
  The NZCC has released its June quarterly monitoring report containing key statistics about telecommunications markets in New Zealand and overseas.
  click here for more

• Commission issues draft determination for Unbundled Bitstream Access service
  The NZCC has issued its draft determination on the price and non-price terms for access to Telecom's Unbundled Bitstream Access services and is seeking submissions from the telecommunications industry on the determination up to 26 September 2007. The NZCC's determinations will allow competitors to take the services from Telecom without the need for any separate commercial agreements.
  click here for more

Consumer issues

• Commission settles with real estate company, agent and developer over misleading advertising
  The NZCC has reached a settlement with Auckland-based Country Life Real Estate Limited agent and shareholder Miles Wallace and Avanti Developments Limited. They admitted breaching the Fair Trading Act by knowingly incorrectly marketing and selling a property as a four bedroom home when building consent was only obtained for a three bedroom home.
  click here for more

• Dell admits breaching Fair Trading Act
  In a settlement with the NZCC, Dell New Zealand Limited has admitted breaching the Fair Trading Act in relation to a number of different representations made about its computers and computer monitors. In 2006, Dell New Zealand marketed its 2007WFP computer monitors as suitable for computer gaming and high end graphics, when they in fact had an inherent issue known as 'colour banding', where colours are distorted in computer graphics.
  click here for more

• Seventh bank to plead guilty - TSB to pay $471,000 over credit card fees
  TSB pleaded guilty to 13 charges of breaching the Fair Trading Act by failing to properly disclose currency conversion fees paid by its credit card customers between 1 September 2002 and 19 December 2004. The company was fined a total of $280,000, and agreed to pay $151,000 in compensation to affected customers. TSB will also pay $40,000 in costs to NZCC.
  click here for more

Australian Competition and Consumer Commission (ACCC)

The ACCC has issued the following media releases:

Mergers and Acquisitions

• ACCC not to oppose proposed acquisition of the Coles Group by Wesfarmers Limited
  The ACCC will not intervene in the proposed acquisition of the Coles Group by Wesfarmers Limited. Although market inquiries revealed some concern from certain market participants about overlap in LPG, hardware and related sectors, following further analysis, the ACCC concluded that there was not likely to be a substantial lessening of competition in any market.
  click here for more

• ACCC calls for comment on the proposed acquisition of Officeworks and either Kmart or Target by Woolworths Limited
  The ACCC has issued a statement of Issues on the proposed acquisition of Officeworks and either Kmart or Target by Woolworths Limited.
  click here for more

Market Behaviour

• High Court opens government procurement to competition law
  The High Court upheld the ACCC's appeal against findings by the Full Federal Court that Baxter Healthcare Pty Ltd was protected from the operation of the Trade Practices Act 1974 by "derivative" Crown immunity because it was dealing with State health purchasing authorities which were entitled to Crown immunity.
  click here for more

• ACCC institutes against ANZ Bank over alleged price fixing agreement
  The ACCC has instituted proceedings in the Federal Court of Australia against the Australian and New Zealand Banking Group Limited alleging the ANZ Bank, in seeking to limit the level of refund Mortgage Refunds could provide to customers in respect of ANZ home loans, has breached section 45 of the Trade Practices Act 1974.
  click here for more

• CEPU appeal against Trade Practices Act breach dismissed
  The Full Federal Court in Melbourne has dismissed an appeal by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia against a decision by the Federal Court earlier this year that it had procured and induced a power station operator to contravene the Trade Practices Act 1974.
  click here for more

• ACCC institutes legal proceedings against stevedores and senior executives for alleged collusion
  The ACCC has instituted legal proceedings against a number of former Patrick companies (now owned by either Asciano or Toll) and a number of former P&O companies (now owned by DP World) for alleged contraventions of section 45 of the Trade Practices Act 1974.
  click here for more

• ACCC institutes against exhibition promoters
  The ACCC has instituted proceedings in the Federal Court against Mr Gregory John Millar, presently carrying on business as Australian Corporate Exhibitions, and Mr John Raymond Webb, presently Australian Corporate Exhibitions' National Events Manager, in relation to the promotion of various industry exhibitions. The ACCC alleges that Mr Millar and Mr Webb engaged in misleading or deceptive conduct (and that Mr Webb was involved in Mr Millar's conduct) in contravention of section 52 of the Trade Practices Act 1974.
  click here for more

• ACCC authorises Construction Material Producers Association's standard form contracts
  The ACCC has issued a determination authorising, subject to a condition, the Construction Material Producers Association to develop and publish two types of standard form contracts for its members.
  click here for more

• ACCC alleges misleading and deceptive conduct, resale price maintenance by Skins Compression Garments Pty Ltd
  The ACCC has instituted proceedings in the Federal Court, Adelaide against Skins Compression Garments Pty Ltd alleging misleading and deceptive conduct and resale price maintenance.
  click here for more

Telecommunications

• Telecommunications access dispute
  Under Part XIC of the Trade Practices Act 1974, TPG Internet Pty Ltd has notified the ACCC of an access dispute with Telstra Corporation Limited. The access dispute relates to the monthly price for which Telstra supplies the Unconditioned Local Loop Service to TPG Internet.
  click here for more

• ACCC begins public consultation on Telstra's LCS and WLR exemption applications
  The ACCC issued a discussion paper on Telstra's applications for exemption from the standard access obligations for the local carriage service and wholesale line rental service.
  click here for more

• ACCC issues draft decision on future regulation of the Line Sharing Service
  The ACCC issued its draft declaration decision for the Line Sharing Service (LSS). The ACCC's draft decision continues regulation of the LSS on a national basis until 31 July 2009.
  click here for more

• ACCC provides further guidance on reasonable terms of access to the Line Sharing Service
  The ACCC has published final determinations made in two arbitrations concerning disputes over access to the Line Sharing Service (LSS). The final determinations specify certain terms on which Telstra supplies the LSS to Primus Telecommunications and Request Broadband. This follows the parties being unable to agree on them, and notifying disputes for ACCC arbitrations.
  click here for more

Consumer issues

• ACCC tests for formaldehyde in clothing
  The ACCC has begun testing a range of clothing for significant residual formaldehyde following heightened public concerns.
  click here for more

• Telstra withdraws and amends Next G advertisements
  Telstra Corporation Limited has withdrawn and amended a series of television advertisements promoting its Next G mobile network after the ACCC raised concerns that the advertisements may mislead consumers about the coverage available on the network.
  click here for more

Access

• Final decision on Dawson Valley pipeline access arrangement
  The ACCC has issued its final decision on the Dawson Valley pipeline access arrangement. The access arrangement sets out the terms and conditions on which Anglo Coal will make third party access available. While only its owners, Anglo Coal and Mitsui, currently ship gas on this pipeline, other coal seam methane producers may in future seek access.
  click here for more

Bell Gully news

Bell Gully advises on Datasquirt IPO
Bell Gully has advised Datasquirt on the New Zealand aspects of its Australasian IPO and ASX listing. Partner Dean Oppenhuis, assisted by solicitor Fleur Adcock, advised on the listing which aims to raise A$12 million (NZ$13 million) for international expansion.
Click here for more