The Bell Gully Regulator Report lists recent changes, decisions and developments at the main New Zealand corporate, commercial and competition regulatory bodies and also lists relevant updates from the Australian Competition and Consumer Commission. This is the first edition of the Regulator Report for 2008 and it covers the period from 6 December 2007 to 7 February 2008. For further details on any matter in this report, just click on the hyperlink below each item.

New Zealand Exchange (NZX)

NZX Releases Debt Security Issues Guidance Note - 17 December 2007
NZX Regulation has published a Guidance Note intended to assist issuers and their advisers when preparing offering documents for Debt Security Issues. The Guidance Note highlights prevalent disclosure issues and also the process that NZX Regulation adopts in its review of offering documents.
Click here to access the Guidance Note

Substantial Security Holder Disclosure Notices
The new Securities Markets (Substantial Security Holders) Regulations 2007 were passed in December 2007 and come into force on 29 February 2008. The regulations require some changes to the information that needs to be disclosed when releasing a Substantial Security Holder notice to the market. Under the new regulations there are three types of disclosures of Substantial Security Holdings:

• Disclosure of beginning to have substantial holding;
• Disclosure of movement of 1% or more in substantial holding or change in nature of relevant interest or both; and
• Disclosure of ceasing to have substantial holding.

To access these forms from the NZX's website click here. Note also that under Regulation 4(2)(a) NZX requires these forms to be completed in either word or plain text format and emailed to announce@nzx.com.

Ministry of Economic Development (MED)

Insurance: Contracts, Agency and Assignments - Cabinet Paper
The MED has made available on its website the Insurance: Contracts, Agency and Assignments - Cabinet Paper. Its purpose is to seek agreement to the introduction of a consolidated statutory framework for insurance contracts, insurance intermediaries' agency status, and life insurance policies. The recommendations arise from the market conduct component of the Insurance Discussion Document September 2006, which formed part of the Review of Financial Products and Providers.
Click here to access the Cabinet Paper

Companies (Minority Buy-out Rights) Amendment Bill
The Companies (Minority Buy-out Rights) Amendment Bill 2007 had its first reading on 13 December 2007 and was referred to the Commerce Select Committee. Submissions on the Bill close on 29 February 2008 and it is expected that the Select Committee will report back on it by 10 June 2008. The Bill amends the Companies Act 1993 to clarify and improve the minority buy-out provisions for dissenting shareholders who have unsuccessfully opposed a fundamental change to the company's structure or operation.
Click here to access the Bill
Click here to read a Bell Gully article on this Bill

Finance service provider register aids consumer redress
The Financial Service Providers (Registration and Dispute Resolution) Bill had its first reading in Parliament on 13 December 2007. If the Bill is enacted, Finance Service Providers will have to be registered and have an approved scheme for dealing with customer complaints.
Click here for further details on the Bill
For Bell Gully commentary on this Bill click here

Extension of time for Financial Products and Providers Review
Cabinet has agreed to an extension of time for further policy development work on parts of the Review of Financial Products and Providers (RFPP). The extension to 30 June 2008 relates to a report back on work around the Securities Offerings, Collective Investment Schemes (CIS) and Platforms and Portfolio Management Schemes and allows further policy work to be undertaken in light of the implications of recent legislative initiatives such as KiwiSaver. The Mutuals' Governance report back has also been extended to 31 July 2008 following the reprioritisation of auditor regulation work.

The Securities (Securities Trustee) Amendment Bill relating to the supervision of trustees by the Securities Commission has not been affected and it is expected to be introduced in the first quarter of 2008. Also, the Insurance Contracts Bill is scheduled to be introduced into the House in August 2008.
Click here to access this update

Technical changes pave way for emissions trading
Cabinet has agreed to technical changes to the regulatory framework for securities and futures exchanges and clearing and settlement systems that will support the introduction of emissions trading markets. The proposals will be contained in a Designated Settlement Systems Bill which is expected to be introduced early in 2008.
Click here for more

Securities Commission

The Bulletin
The Securities Commission has released the January 2008 issue of its quarterly publication "The Bulletin". Items covered in this issue include:

• finance company collapses;
• an article focusing on the Commission's powers to enforce the new Securities Legislation rules, penalties and compensation;
• a reminder that media articles can be an "advertisement" under securities law, which defines advertisement as including any form of communication by or on behalf of the issuer that contains or refers to an offer of securities to the public, or is likely to induce someone to subscribe for the issuer's securities;
• the bilateral MOU signed with Dubai; and
• details of the annual oversight review of NZX.

Click here to access The Bulletin

Guide to New Securities Markets Law 2008 released
The Securities Commission has released a guide to the New Securities Law for Investment Advisers and Market Participants 2008. The guide explains the new requirements under the Securities Markets Act 1988 which come into force on 29 February 2008. In particular, it covers changes made to the insider trading law, new law on market manipulation, changes relating to substantial security holder disclosure, and new law relating to investment adviser and investment broker disclosure. The guide is targeted at investment advisers and brokers, and other participants in the securities markets and their advisers.
Click here to view the guide

Consultation Document - New requirements for investment adviser statements
The Securities Commission issued a consultation document on the "Important Information" section of investment statements prepared under the Securities Act 1978 which needs to be changed to take account of new disclosure requirements for investment advisers. These changes come about under the Securities Markets Amendment Act 2006 which comes into force on 29 February 2008. Submissions on the Securities Commission's proposed new wording closed on 22 January and it is expected that the amendment regulations will come into force at the same time as the new investment adviser law, or very shortly afterwards.
Click here to view the consultation document

Securities Commission Oversight Review of New Zealand Exchange Limited
The Securities Commission has released the terms of reference for its oversight review of NZX for the 2007 calendar year. The terms of reference are in four parts. The Commission expects to complete the review and publish a report by 30 June 2008.
Click here to view the full terms of reference for the review.

Securities Act Exemption Notices

The following Securities Act Exemption Notices have been published:

• Securities Act (Real Property Developments) Exemption Notice 2007 (SR 2007/378)
  This notice replaces the Securities Act (Residential Property Developments) Exemption Notice 1999. The notice applies to participatory securities in the form of membership of an incorporated society, or a shareholding in a company, that owns, leases, licenses, maintains, administers, or operates communal facilities in a real property development. The effect of the notice is that the developer and the society or company are exempted from the Securities Regulations 1983 (except regulation 8) and the following provisions of the Securities Act 1978:
• section 33(3), which relates to the appointment of a statutory supervisor;
• sections 37 and 37A, which contain the prospectus and investment statement requirements of the Act;
• section 38A, which relates to statements in advertisements by experts; and
• section 54, which relates to certificates evidencing securities.
The notice expires on 30 September 2012.
Click here to access this Notice

• Securities Act (Elson Ross Funds Management Limited) Exemption Notice 2007 (SR 2007/379)
  This notice exempts Elson Ross Funds Management Limited and every person acting on its behalf from clauses 1(4) and 10(1)(c) of Schedule 1 of the Securities Regulations 1983. Clause 1(4) requires the registered prospectus to state the price or other consideration to be paid or provided for the securities being offered. Clause 10(1)(c) requires the registered prospectus to include a one-year prospective statement of cash flows. The notice expires on 30 November 2012.
  Click here to access the Notice

• Securities Act (World Bank) Exemption Notice (SR 2007/392)
  This notice exempts the World Bank from sections 33(2), 37, 51, 52, 54, and 54B(3) of the Securities Act 1978. The World Bank is also exempt from regulation 17 of the Securities Regulations 1983 in relation to debt securities issued by the World Bank.
  Click here to access the Notice

• Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice (No 2) (SR 2007/405)
  These amendments largely retain the existing policy in the principal notice (the Securities Act (Rights, Options, and Convertible Securities) Exemption Notice 2002) but:
• extend the scope of the current exemption from section 37A(1)(a) of the Securities Act 1978;
• update the references to the New Zealand Stock Exchange with references to the securities market operated by the New Zealand Exchange Limited ("NZX");
• amend some current conditions requiring certain securities to be quoted on the New Zealand Stock Exchange to now provide for quotation on a securities market operated by either NZX or Australian Stock Exchange Limited; and
• add a further exemption, from section 37A(1)(b) of the Securities Markets Act 1978 (so far as it relates to investment statements), subject to conditions.
Issuers who have properly relied on the principal notice prior to its amendment by this notice will not be affected by the amendments.
Click here to access the Notice

• Securities Act (Quayside Holdings Limited) Exemption Notice 2008 (SR 2008/4)
  This notice relates to the offer of perpetual preference shares (specified securities) in Quayside Holdings Limited (Quayside) by Bay of Plenty Regional Council (the offeror). The notice exempts Quayside, the offeror, and every person acting on behalf of either or both of them from certain clauses of Schedule 1 of the Securities Regulations 1983 to the extent that they would require information about the offeror's subsidiary, Port of Tauranga Limited (POTL), (or any of POTL's subsidiaries) to be included in a registered prospectus relating to the offer. This notice also exempts Quayside, the offeror, and every person acting on behalf of either or both of them from regulation 23 and clauses 10(1)(c) and 42(2) of Schedule 1 of the Regulations in respect of the specified securities. All of the exemptions are subject to a number of conditions. The notice expires on 31 December 2008.
  Click here to access the Notice

• Securities Act (SADE Developments No 2 Limited) Exemption Notice 2008 (SR 2008/5)
  This notice applies to participatory securities in the form of membership of an incorporated society owning, leasing, licensing, maintaining, administering, or operating communal facilities in a real property development to be undertaken by SADE Developments No 2 Limited. The notice exempts (subject to conditions) the developer, the society, and every person acting on behalf of either or both of them, from sections 33(3), 37, 37A, 38A, and 54 of the Securities Act 1978 and the Securities Regulations 1983 (except regulation 8). This notice expires on 31 December 2012.
  Click here to access the Notice

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

Financial Reporting Act Exemption Notices

Under section 4B of the Financial Reporting Act 1993, the Securities Commission has issued the following Financial Reporting Act Exemption Notice:

• Financial Reporting Act (Fisher & Paykel Finance Limited Group) Exemption Notice 2007
  This notice exempts certain subsidiaries of Fisher & Paykel Finance Limited (Fisher) from being issuers under section 4(1)(ba) of the Financial Reporting Act 1993 (the Act) by virtue of being recipients of money raised by Fisher from an offer of debt securities to the public. The Securities Commission note that it considers it is appropriate to grant the exemption because:
• the conduit issuer provisions of the Act were introduced to require public reporting by entities that have the effective use of funds raised from the public, but which have structured themselves in such a way as to avoid being issuers under the Act;
• in the situation covered by this notice investors will receive consolidated group reports that include all the financial information of the borrowing group; and
• the consolidated group reports are a good indication of the financial position and performance of the group as a whole. Where there are intra-group guarantees, the risk of investment is spread across this reporting group.
This notice expires on the close of 29 February 2012.
Click here to access this Notice

Takeovers Panel

Guidance Note - The meaning of 50 or more shareholders in the definition of Code company
The Takeovers Panel has issued a Guidance Note in response to enquiries it has received on how to interpret the word shareholders when deciding whether an unlisted company falls within the definition of Code company in the Takeovers Code. The particular enquiry made of the Panel has been whether each individual shareholder in the company should be counted, or whether the number of share parcels that are held should be counted, as shareholders. The Panel's view is that shareholders means each shareholder named in the company's share register. The Panel does not accept the argument that the definition 50 or more shareholders should be interpreted to mean that a company's voting securities must be held in 50 or more share parcels (by any number of persons) for a company to be a Code company.
Click here for more

New edition of Takeovers Panel's Code Word December 2007
The Takeovers Panel has issued a Code Word:

• outlining the Panel's views on (and the approach it intends to adopt) in relation to the new prohibition in rule 64 of the Takeovers Code which comes in to force on 29 February 2008 and will have the effect of prohibiting misleading or deceptive conduct in relation to Code-regulated transactions;
• explaining the Panel's requirements for conditional acceptance facilities;
• setting out its latest Guidance Note (noted above) on the meaning of 50 or more shareholders in the definition of Code company.

Click here to access Code Word

Takeovers Panel consults on the use of schemes and amalgamations to Take Over Code companies
In 2006 the Takeovers Panel took steps to address its concerns over schemes of arrangements and amalgamations being used by code companies to avoid the provisions of the Takeovers Code when seeking to change the ownership or control of code companies. This included making recommendations to the Minister of Commerce for legislative changes to be made to the Companies Act and the Takeovers Code, and asking the Commerce Select Committee for those changes to be included as part of the 2006 Business Law Reform Bill. This request was rejected. However in March 2007 the Minister of Commerce requested that the Takeovers Panel consider the issue further and prepare a regulatory impact statement. As part of this exercise the Takeovers Panel has now issued a consultation paper setting out six options for consideration. The Panel has invited comments on the options using the questionnaire in the consultation paper and will take all comments into account before reporting to the Minister. Closing date for submissions is 15 February 2008.
Click here for more
Click here to access the consultation paper

Takeovers Panel Responds to Tony Gibbs' Public Comments on Kerifresh Transactions
The Takeovers Panel has responded to comments made by Tony Gibbs, Chairman of Turners & Growers Limited, (as reported in the NZ Herald) in relation to the remedies the Panel had decided upon for the breaches of the Code arising from the acquisition of shares in Kerifresh.
Click here to read the comments

Takeovers Code Exemption Notices

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

Takeovers Code (NZ Airport NC Limited) Exemption Notice 2007
This notice relates to the NZ Airport NC Limited's (NZ Airport) proposal to make a partial offer to acquire 39.53% of the fully paid ordinary shares in AIAL not already held by NZ Airport (the NZ Airport offer). Rule 23(1)(b) of the Takeovers Code requires the minimum acceptance condition for a partial offer to relate to the particular percentage approved under rule 10(1)(b). The particular percentage would be 40% in this case, but may be slightly less because of the possible dilutionary effect of any AIAL employee options exercised during the offer period. Therefore, the Takeovers Panel has granted an exemption from rule 23(1)(b) to allow the minimum acceptance condition to be set at 39.99%.
Click here to read the notice

To view a list of all of the Takeovers Code Exemption Notices currently in force click here.

Companies Office

Important changes to the way you do business with the Companies Office
From 1 July 2008 it will become mandatory to file certain documents with the Companies Office via its online services. The introduction of this policy will see the removal of many of the manual processes that the Companies Office currently supports. Changes being introduced will impact on the way that liquidators, receivers and company administrators file reports with the Companies Office. As from 1 July 2008 the Office will only accept reports filed using the online administration, receivership and liquidation management tool.
For further details click here

Voluntary administration online service now available
The Companies Office has introduced a new online service for voluntary administration. Voluntary administration is an alternative to liquidation for companies in financial distress and is considered to be a short-term measure, freezing the company's financial position while the administrator and the creditors determine the company's future. Administrators will be able to notify the Registrar of Companies of their appointment and manage their portfolios via the administration, liquidation and receivership online service at www.companies.govt.nz.
Click here for more

New Personal Property Securities Register website live
The new look PPSR website was released on 29 January 2008. The revamped site retains existing search and registration functions and now also acts as a resource for anyone looking for information about the Personal Property Securities Act 1999 and the PPSR.
Click here for more

Ministry for the Environment

RMA call-in for renewable energy projects signalled
As noted in the Government's New Zealand Energy Strategy to 2050 released in October 2007, the Government expects more projects will be called-in (following the call-in of Transpower's North Island grid proposal) in the future under the existing provisions of the Resource Management Act (RMA). Under section 141A of the RMA, the Environment Minister can call in a proposal and direct that the matter is referred to either a Board of Inquiry or the Environment Court. This means that the matter is decided by either of these two bodies instead of the relevant district, city or regional councils. On 20 December 2007 Environment Minister Trevor Mallard announced that he intends to call in two renewable energy development proposals under the RMA, namely:

• the Unison Te Waka proposal for a 34 turbine wind farm at Te Waka near the Napier-Taupo Road (which will be referred to the Environment Court); and
• a new geothermal power station called Te Mihi being developed by Contact Energy (which will be referred to a Board of Inquiry).

Click here to read the press release

Update on Transpower's North Island Grid Upgrade Proposal
A section 42A Report commissioned by the Board of Inquiry under section 42A of the RMA has been prepared for the North Island Grid Upgrade Proposal. It includes key issues of the proposal, an overview of the notices of requirement documentation and resource consent applications lodged, and an analysis of information provided by Transpower. The Board of Inquiry has also made public the submissions received by the Minister and a pre-hearing timetable on Transpower's proposal. The proposal hearing is expected to start on the 25 March 2008.
Click here to access the section 42A Report
Click here to view the hearing schedule
Click here to access the submissions

Reserve Bank of New Zealand

Reserve Bank welcomes new insurance responsibilities
On 17 December 2007, the Reserve Bank welcomed the Cabinet decision that the bank will take on new responsibilities under a regulatory framework for the prudential regulation of the insurance sector. The prudential framework will apply to all insurance providers, including life, health and general insurance.
Click here to read more

RBNZ accredits four NZ banks under Basel II Accord
On 10 December 2007, the Reserve Bank announced that four banks have been accredited to adopt the internal models approach under the Basel II banking supervisory regime. They are ANZ National Bank Limited, ASB Bank Limited, Westpac New Zealand Limited and Bank of New Zealand. They have been accredited to use internal models for operational risk from the first quarter of 2008.
Click here to read the article
Click here to read more about the Basel II banking supervisory scheme

New Zealand Commerce Commission (NZCC)

Media releases

The NZCC has issued the following media releases:

Industry Regulation and Regulatory Control

• Commerce Commission consults on Vector's proposed settlement offer to rebalance prices
  The NZCC is seeking the views of interested parties on the voluntary offer put forward by Vector as an alternative to regulatory control being imposed. In response to its earlier intention to make a declaration of control in respect of the electricity distribution services supplied by Vector, the Commission received an administrative settlement offer from Vector in October 2006 (which was updated in January 2007). The Commission has reached the preliminary view that the voluntary offer is consistent with the objectives of the regulatory regime. Submissions are required by the close of business on 11 February, 2008.
  Click here for more

• Commission publishes discussion document on resetting thresholds for electricity distribution businesses from 2009
  The NZCC has released a discussion document (Discussion Paper on the Threshold Reset 2009) concerning the reset of thresholds for electricity distribution businesses for the next regulatory period beginning 1 April 2009. Issues for discussion include:
• industry performance under the current thresholds and possible implications for resetting the thresholds;
• issues relevant to setting a price-path threshold;
• the quality of service provided to New Zealand consumers;
• distribution network investment in New Zealand; and
• other areas where refinements to the thresholds may be appropriate.
Submissions close on 18 February 2008.
Click here for more
Click here to access the discussion paper

Mergers and Acquisitions

• Commission welcomes leave to appeal Warehouse judgment
  On 31 January, Justice Mallon at the High Court in Wellington granted the NZCC leave to appeal her earlier decision which allowed the appeals of the three Foodstuffs co-operatives and Woolworths Ltd against the NZCC's decision declining clearance for either party to acquire The Warehouse Group. The NZCC's appeal to the Court of Appeal will be heard over three days commencing on 29 April 2008. An interim stay of Justice Mallon's initial decision was granted pending the outcome of the NZCC's application for leave to appeal. The latest High Court decision extended the ban on any bidding by the parties for The Warehouse Group until 29 February.
  Click here for the Court of Appeal hearing dates
  Click here for the leave to appeal notification
  Click here for the NZCC's announcement that it would appeal
  Click here for the NZCC's media release on the interim stay
  (Bell Gully advised Woolworths Ltd in its application to the NZCC for clearance to acquire The Warehouse and in the subsequent appeals to the High Court and Court of Appeal.)

• Cadmus and Provenco cleared to merge
  The NZCC has cleared the proposed merger between Cadmus Technology Limited and Provenco Group Limited. Both Cadmus and Provenco are listed on the NZX. Cadmus designs, develops and implements electronic fund transfer at point of sale (EFTPOS) payment solutions for merchant businesses in New Zealand and overseas. Provenco is also a supplier of EFTPOS technology to businesses in New Zealand and overseas, through its division Provenco Payments Limited. Provenco imports and distributes the Hypercom and Keycorp brands of EFTPOS technology.
  Click here for more

• Pacific Radiology cleared to acquire Wellington Radiology
  The NZCC has cleared Pacific Radiology Limited to acquire all the assets of Wellington Radiology Limited.
  Click here for more

• Air Liquide New Zealand Limited applies for clearance to acquire ASCOGAS Limited
  The Commerce Commission has received an application from Air Liquide New Zealand Limited seeking clearance to acquire 100% of the shares in ASCOGAS Limited.
  Click here for more

• Telecom applies for clearance to acquire radio spectrum management rights
  The NZCC has received an application from Telecom seeking clearance in relation to acquiring the management rights from the New Zealand Government for specified radio spectrum frequencies.
  Click here for more

• Vodafone applies for clearance to acquire radio spectrum management rights
  The NZCC has received an application from Vodafone Mobile NZ Limited seeking clearance in relation to acquiring the management rights from the New Zealand Government for specified radio spectrum frequencies.
  Click here for more

Telecommunications

• Guidelines to interrelationship between Commerce and Telecommunications Act issued
  The NZCC has issued guidelines on how it addresses issues or complaints that relate to competition concerns in the telecommunications market. These guidelines provide clarity as to when action against anti-competitive behaviour in the telecommunications industry would be taken under the Commerce Act.
  Click here for more

• Commission closes investigation into Telecom
  The NZCC has closed its investigation into allegations that Telecom had squeezed the margins of its competitors through bundling and a price discount, and affected their ability to compete, in breach of the Commerce Act 1986. After an investigation, during which the terms of the bundled discount changed several times, the NZCC concluded that Telecom's bundle did not breach the Commerce Act. The NZCC found that efficient competitors could earn positive margins over the combined calling and broadband offering when they sold similar bundles.
  Click here for more

• Standard terms process for co-location on cellular transmission sites
  The NZCC has launched a standard terms development process to determine the non-price elements of co-location of a mobile operator's equipment on another operator's transmission site.
  Click here for more

• Commission clarifies Number Portability Determination
  The NZCC has clarified the Local and Cellular Telephone Number Portability Determination issued on 31 August 2005 to confirm that pre-paid mobile services are covered under the terms of the original Determination. Number portability was launched on 1 April 2007 and allows a customer to switch telecommunications service providers and retain their telephone number. Parties to the Determination have until 1 April 2008 to implement technology changes to comply with the clarification.
  Click here for more

• Final report issued on the regulation of co-location services
  The NZCC has issued its final recommendation to the Minister of Communications on the regulation of mobile co-location services on cellular transmission sites.
  Co-location allows the mobile equipment of a network operator to be installed on another operator's tower. The NZCC has recommended that:
• the regulatory settings for co-location should not include price;
• the co-location undertaking submitted by Vodafone as an alternative to regulation be rejected as it believes that the undertaking is not likely to promote new entry into the New Zealand mobile market.
Commercial agreement has been reached between Vodafone and New Zealand Communications for roaming. The NZCC will defer its final recommendation on roaming until it is clear whether the conditions of the agreement have been satisfied.
Click here for more

• Standard terms determination processes initiated for the sub-loop related services
  The NZCC has initiated standard terms determination processes for the following sub-loop related services:
• unbundled copper local loop from Telecom's distribution cabinets;
• backhaul from Telecom's distribution cabinet to the exchange;
• co-location services at Telecom's distribution cabinets.
The Commission must set the price and non-price terms for these services to enable access seekers to supply services from Telecom's distribution cabinets.
Click here for more

• Final determinations for unbundled bitstream access
  The NZCC has issued its final determination on the price and non-price terms on which Telecom must make the unbundled bitstream access service available to other telecommunications providers.
  Click here for more

• Commission releases September quarterly report on telecommunications markets
  The NZCC has released its September quarterly monitoring report containing key statistics about telecommunications markets in New Zealand and overseas. Recent amendments to the Telecommunications Act have empowered the Commerce Commission to monitor competition in telecommunications markets and their performance and development. The Commission will publish an annual report in early 2008 with a more detailed analysis of the state of telecommunication markets in New Zealand.
  Click here for more

Consumer issues

• Telecom to be prosecuted over Go Large promotion
  The NZCC has decided to prosecute Telecom and its subsidiary Xtra for alleged breaches of the Fair Trading Act, in relation to the Go Large broadband promotion.
  Click here for more

• When is a sale not a sale?
  Retailers have been reminded by the NZCC that advertising sale prices that are no cheaper than everyday prices can put them in breach of the Fair Trading Act. This follows the sentencing of a bed retailer in the Christchurch District Court.
  Click here for more

• Oaks Hotels fined for grossly misleading advertising campaign
  Hotel chain Oaks Hotels and Resorts NZ Limited has pleaded guilty to eight charges of breaching the Fair Trading Act in a case that reinforces to businesses that advertising "conditions apply" is not sufficient to avoid misleading consumers where the main message of the advertising is misleading.
  Click here for more

• Voluntary admission saves Kiwibank and New Zealand Post from prosecution
  Kiwibank and New Zealand Post have reached a settlement with the Commerce Commission in relation to a breach of the Fair Trading Act 1986 over a failure to adequately disclose overseas currency conversion fees in on-line customer statements for Prezzy Card.
  Click here for more

• "Buyer enquiry over" should not mislead
  Wellington real estate agent Tim Whitehead has been sentenced in the Hastings District Court on three charges of breaching the Fair Trading Act between 28 April 2007 and 5 May 2007. He was fined $7,500 on charges relating to three house sale advertisements which promoted a Wellington property as being available for sale at "buyer enquiry over $380,000". However the agent was aware that the vendor was not willing to accept less than $400,000 for the property.
  Click here for more

• West Auckland pawn broker ordered to repay loan customers
  West Auckland credit provider Galistair Enterprises Limited, trading as xtraCASH Finance, has been fined $45,000 for breaching the Credit Contracts and Consumer Finance Act and the Fair Trading Act, in relation to 68 loan contracts. The company has been ordered to refund $23,935 to its customers.
  Click here for more

• Second convictions for false and misleading claims about Probitas fertiliser
  Probitas Limited, which makes a fertiliser product, has been convicted and fined for a second time for making misleading claims under the Fair Trading Act.
  Click here for more

Australian Competition and Consumer Commission (ACCC)

ACCC media releases

The ACCC has issued the following media releases:

Mergers and Acquisitions

• ACCC Calls for Comment of Proposed Acquisition of certain assets of Carter Holt Harvey's Woodproducts Australia Business by Sumitomo Forestry Co Ltd
  The ACCC has issued a Statement of Issues on the proposed acquisition of certain assets of Carter Holt Harvey's Woodproducts Australia business by Sumitomo Forestry Co Ltd. The Statement of Issues seeks further information on certain competition issues which have arisen from the ACCC's market inquiries. To allow for submissions in response to the Statement of Issues, the ACCC's proposed decision date has been deferred to 13 February 2008.
  Click here for more

Market Behaviour

• ACCC issues notice objecting to GeelongPort figee crane exclusive dealing arrangement
  The ACCC has issued a notice to revoke an exclusive dealing notification lodged by GeelongPort Pty Limited. The exclusive dealing arrangement involves GeelongPort providing access to Lascelles Wharf in Geelong on condition that customers use GeelongPort's shore-based figee cranes, when they are available, to unload fertiliser and other dry bulk cargos. Customers are also required to use GeelongPort's other bulk discharge equipment, hoppers and grabs, in conjunction with the figee cranes. The ACCC believes that this arrangement substantially lessens competition and is not in the public interest.
  Click here for more

• Federal Court fines Korean education consultants for price fixing
  The Federal Court in Perth has imposed penalties totalling $125,000 on a number of educational services agents for fixing the price of placement services provided to students of Korean origin.
  Click here for more

• Federal Court finds northern Tasmanian orthodontists engaged in price fixing, market sharing
  The Federal Court of Australia found that three orthodontic businesses, each operating in northern Tasmania, had contravened section 45 of the Trade Practices Act 1974 by engaging in price fixing and market sharing. The illegal arrangements were written into the orthodontists' shared premises co-location agreement.
  Click here for more

• KITOCA addresses ACCC concerns over anti-competitive agreements in tourism
  The ACCC has accepted court enforceable undertakings from the Korean Inbound Tour Operator Council of Australia Incorporated after concerns about agreements entered into by KITOCA members which may contravene the price fixing and boycott provisions of the Trade Practices Act 1974.
  Click here for more

• ACCC proposes to grant authorisation to certain provisions of SuperTAB agreement
  The ACCC has issued a draft determination proposing to authorise certain provisions of an agreement between Tabcorp and TOTE Tasmania governing TOTE Tasmania's participation in the SuperTAB pool.
  Click here for more

• ACCC allows health food stores in the ACT to collectively bargain
  The ACCC has issued a final decision (following its draft determination) authorising current and future members of the ACT Health Food Co-operative to collectively bargain with suppliers of health food products.
  Click here for details on the draft determination
  Click here for the final decision

• ACCC updates authorisation allowing limited international tariff agreements
  The ACCC has granted substitute authorisation to Qantas Airways Limited for tariff arrangements with designated airlines that are required under Australia's air service agreements with other countries, subject to the authorisation only offering protection under certain circumstances. The substitute authorisation has been granted to Qantas until 31 December 2017.
  Click here for more

Consumer issues

• ACCC inquiry into grocery prices
  The Australian Government has directed the ACCC to hold a public inquiry into the competitiveness of grocery prices in Australia.
  Click here for more

• Kmart's Elmo-shaped bean bag covers fail product safety standard
  The Federal Court has declared Kmart contravened the Trade Practices Act in supplying Elmo-shaped bean bag covers without the required warning label.
  Click here for more

• ACCC institutes proceedings against Crazy John's over phone advertising
  The ACCC has instituted proceedings in the Federal Court against Mobileworld Operating Pty Ltd (trading as Crazy John's) for representing that handsets on its Crazy Phone Plans are available 'FREE' or for '$0', when in fact consumers are required to pay for the handsets through higher call rates than those available on comparable plans which do not include a handset.
  Click here for more

• Court orders against Telstra for misleading Next G claims
  The Federal Court has found that Telstra misled consumers about the coverage available on its Next G mobile network. The ACCC brought proceedings against Telstra alleging that Telstra had engaged in misleading or deceptive conduct by representing that the Next G mobile network had "coverage everywhere you need it". The Federal Court has granted the ACCC declaratory relief and made injunctions permanently restraining Telstra from making any representation to the effect that:
• mobile coverage on the Next G mobile telephone network is always available to Next G customers everywhere the customer, from time to time, needs to use their mobile telephone;
• a customer subscribing to the Next G mobile telephone network will receive the same or better coverage than is available currently on the CDMA network, without disclosing that coverage on the Next G network depends in part on where the person is, what particular handset the person is using and whether that handset has an external antenna attached.
Click here for more details on the court's decision
Click here for more details on the court orders

• ACCC takes action against GM Holden Ltd over Saab 'green' claims
  The ACCC has instituted legal proceedings against GM Holden Ltd, which supplies and markets Saab motor vehicles in Australia and trades as Saab Australia, alleging misleading and deceptive conduct and false representations concerning 'green' claims made in the advertising of Saab vehicles.
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• Ballina Petroleum fined for selling tainted fuel
  Fines totalling $470,000 have been imposed after Dojoo Pty Ltd, formerly trading as Ballina Petroleum, for falsely representing the quality and composition of fuel sold in the northern New South Wales market in order for it to maintain a competitive edge.
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• Court declares Audi Q7 motor vehicle advertising misleading
  The Federal Court has declared that Audi Australia Pty Ltd engaged in false, misleading or deceptive conduct in relation to advertisements for its Q7 Series motor vehicles.
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Telecommunications

• Notification of telecommunications access disputes
  The ACCC has recently received notification of five telecommunications access disputes under Part XIC of the Trade Practices Act 1974. They relate to Telstra's supply of the Line Sharing Service, Wholesale Line Rental and Local Carriage Service respectively.
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• ACCC begins public consultation on Telstra's exemption application
  The ACCC has issued a discussion paper on Telstra's application for exemption from its obligations to supply a range of telecommunications services to Optus in areas of Sydney, Melbourne and Brisbane where Optus has deployed its HFC network.
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• Final determinations in telecommunications access disputes
  The ACCC has published final determinations for four access disputes relating to the Mobile Terminating Access Service.
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• ACCC issues Telstra accounting separation report for September quarter
  The ACCC has issued its 17th imputation testing and non-price terms and conditions report under the enhanced accounting separation regime for Telstra. The report presents data for the quarter ending 30 September 2007.
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• ACCC sets terms of access to the unconditioned local loop service and line sharing service
  The ACCC has published final determinations made in the arbitration of disputes over access to the Unconditioned Local Loop Service and the Line Sharing Service. The decisions were made on 20 December 2007 and were published following a compulsory legislative consultation period on publication.
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• ACCC publishes exemption application from Telstra for the domestic transmission capacity service
  The ACCC has published Telstra's exemption applications made in relation to its supply of the domestic transmission capacity service (DCTS) for:
• tail-end and inter-exchange DTCS in CBD areas of each capital city
• inter-exchange transmission in metropolitan areas and certain regional centres for DTCS; and
• tail-end transmission in metropolitan areas and certain regional centres for DTCS up to 2 Mbps only.
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• Telstra submits new ULLS monthly charge undertaking
  The ACCC has published Telstra's latest Unconditioned Local Loop Service (ULLS) monthly charge access undertaking. In this ULLS Undertaking Telstra proposes that a price of $30 for each ULLS service in a Band 2 Exchange Service Area should apply for the period to 31 December 2010. The formal consultation period will begin when the discussion paper has been issued.
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• ACCC finalises telecommunications infrastructure audit and publishes exemption application
  The ACCC has issued a Record-Keeping Rule requiring 22 specified carriers to report on the locations of their core network and Customer Access Network infrastructure.
  Recent ACCC reviews have indicated that a consistent and coherent infrastructure database is needed to further inform the effectiveness and timeliness of future regulatory processes. This includes the assessment of a number of exemptions applications recently lodged by Telstra in relation to existing declared services.
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• ACCC publishes views on next generation telecommunications networks
  The ACCC has issued for public consultation two papers related to next generation telecommunications networks:
• the first is a draft decision on a 15-year special access undertaking given by the G9 for its proposed fibre-to-the-node network upgrade which also provides guidance on access to FTTN networks more generally; and
• the second is a position paper on the possible variation of the definition of the declared Unconditioned Local Loop Service. The position paper notes the need for the ULLS declaration to be updated to keep in step with ongoing network modernisation, including the evolution of traditional switched telecommunications networks to internet protocol.
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• Federal Court affirms invalidity of Competition Notice
  The Federal Court has handed down final orders which affirm that the ACCC was not entitled to issue the Part A Competition Notice in December 2005 alleging that Telstra had acted anti-competitively by raising the wholesale price of its Home Access line rental service.
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Access

• Telecommunications access dispute
  Chime Communications Pty Ltd has notified the ACCC of an access dispute with Telstra Corporation Limited under Part XIC of the Trade Practices Act 1974. The access dispute relates to future arrangements of supply of the Line Sharing Service from Telstra to Chime beyond 31 December 2007. The ACCC has begun the arbitration process for this access dispute.
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• Notification of two telecommunications access disputes
  The ACCC has received notifications under Part XIC of the Trade Practices Act 1974 of an access dispute between:
• Telstra Corporation Limited and Optus Mobile Pty Limited, and
• Telstra Corporation Limited and Optus Networks Pty Limited.
Both disputes relate to the price paid by Telstra to each Optus entity for the Mobile Terminating Access Service. The ACCC has commenced the arbitration process for these access disputes.
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• Federal Court upholds ACCC decision on Foxtel digital Pay TV service
  The Federal Court has upheld the ACCC's decision to accept a special access undertaking from Foxtel for its digital Pay TV set top unit service. Foxtel's undertaking permits independent providers of digital content channels to offer their channels directly to Foxtel customers through Foxtel's digital set top units.
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