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 edition of the Regulator Report covers the period from 9 April 2008 to 7 May 2008. For further details on any matter in this report, just click on the hyperlink below each item.

Ministry of Economic Development (MED)

Copyright (New Technologies) Amendment Bill passes third reading
In 2001 the government began a review of the implications of digital technology for the Copyright Act 1994 which has finally resulted in the Copyright (New Technologies) Amendment Act. The Act will update and clarify how copyright applies to new technologies in today's digital environment. Some of the key changes include:

• replacing existing terms to create a technology neutral framework;
• clarification of the liability of Internet Service Providers (ISPs) when it comes to copyright infringement;
• updating the existing permitted acts for fair dealing and educational establishments, libraries and archives;
• providing a format shifting exception for copying sound recordings for personal use or the personal use of their household provided certain conditions are met;
• providing new limited exceptions for decompilation or adaptation of computer programmes under certain conditions;
• providing more comprehensive protection to technological protection measures (TPMs) by giving copyright owners the ability to take action in respect of devices, means or information where circumvention could enable the infringement of all the copyright owners exclusive rights, and not just copying;
• introducing criminal offence provisions in limited circumstances where circumvention of a TPM is for large-scale commercial dealing in copyright material; and
• introducing new provisions to enable the actual exercise of permitted acts where TPMs have been applied.

The Bill passed its third reading on 8 April 2008. However, prior to the Act coming into force, two sets of regulations must be made in relation to prescribed forms for ISPs and TPMs. It is anticipated that the Act will come into force in October 2008.
Click here to access the media statement and key provisions in the Act
Click here for the full text of the Bill

Update on the Financial Advisers Bill
The Select Committee has called for further public submissions on the Financial Advisers Bill before 16 May 2008. The issues under consideration include:

• revising the definition of "financial adviser" so that it is narrower and would capture only those whose primary business is the provision of financial advice or who regularly provide such advice in the course of their business; and
• changing the regulatory model outlined in the Financial Advisers Bill so that the Securities Commission undertakes the functions and has the powers to oversee and enforce the new regime, rather than industry-led approved professional bodies.

Click here for more
Click here to access the latest consultation document

New Government Policy Statement on Gas Governance
On 18 April 2008, Energy Minister David Parker released the Government's revised and updated Government Policy Statement (GPS) on Gas Governance. The GPS has been revised and updated to be consistent with the New Zealand Energy Strategy and New Zealand Energy Efficiency and Conservation Strategy, as well as to reflect general changes that have taken place since the last GPS was released in October 2004.
Click here to access the press release
Click here to access the Government Policy Statement

Ministry of Foreign Affairs and Trade

Free trade with China: a new website and a summary of what's ahead
The Government has launched a new website containing information on New Zealand's Free Trade Agreement with China. The ChinaFTA.govt.nz website went live shortly after the agreement was signed on 7 April 2008. The website provides detail on the FTA, including:

• the text of the document;
• the National Interest Analysis;
• fact sheets and key outcomes for New Zealand;
• links to all New Zealand Government agencies connected to doing business in China;
• a tariff finder tool allowing people to view tariff rates on 7000 different items - the current rates and the eventual rates that will result from the FTA.

The FTA is expected to come into force on 1 October 2008, subject to completion of parliamentary processes.
To read the full press release click here
For the full text of the agreement visit www.chinafta.govt.nz

Bell Gully has also produced a guide summarising key elements of the FTA, including tariff reductions, environmental cooperation and changes to labour, investment, immigration and customs policies.
Click here to access Bell Gully's Guide on the NZ-China FTA

Companies Office

New requirements for Overseas Limited Partnerships
The Limited Partnerships Act 2008 which came into force on 2 May 2008 includes a requirement for an overseas limited partnership to register with the Registrar of Companies within 10 working days of commencing to carry on business in New Zealand. However, a three month "grace" period has been given for overseas limited partnerships that were carrying on business in New Zealand prior to the commencement of the Act. Once registered an overseas limited partnership must file an annual return every year with the Companies Office to ensure that its details are up to date.

Prescribed forms for registering an overseas limited partnership and for filing an annual return are available online at the Companies Office website. Each annual return must also be accompanied by the following forms if there are any changes to the partners, addresses or name of the overseas limited partnership:

• Form 11 Change of partner details of an Overseas Limited Partnership (Notification of changes must be lodged within 20 working days of the change);
• Form 12 Change of Addresses of an Overseas Limited Partnership (Notification of changes must be lodged within 20 working days of the change);
• Form 13 Change of name of an Overseas Limited Partnership;

There are currently no online services available to register or maintain an overseas limited partnership.
Click here for more details on how to register
Click here for more details on how to maintain
Refer to our previous issue of the Regulator Report for information on the Limited Partnerships Act.

Securities Commission

April Issue of "The Bulletin"
The Securities Commission has released the April 2008 issue of its Quarterly Newsletter "The Bulletin". Items covered in this issue include:

• an update on the Commission's finance company investigations and its enforcement priorities;
• investment adviser disclosure;
• the Tranz Rail settlement;
• funds recovered for contributory mortgage investors; and
• the new exemptions for trustee corporations and nominee companies under the substantial security holder regime.

Click here to access The Bulletin

Securities Act Exemption Notices

The following Securities Act Exemption Notices have been published:

• Securities Act (Industrial and Provident Societies) Exemption Amendment Notice 2008
  This notice which came into force on 11 April 2008 amends the Securities Act (Industrial and Provident Societies) Exemption Notice 2002 to name Foodstuffs (Wellington) Co-operative Society Limited as a society to which that notice applies. This entitles Foodstuffs to use an evergreen short-form prospectus in respect of participatory securities allotted to its members. The 2002 Notice also exempts, subject to conditions, industrial and provident societies from:
• the statutory supervisor and deed of participation requirements;
• the requirement that the amount payable on subscription for participatory securities is at least 10 percent of the nominal amount of the security; and
• the obligation to issue certificates evidencing securities.

• Securities Act (Externally Managed Group Investment Funds) Exemption Amendment Notice 2008
  This notice extends the life of the Securities Act (Externally Managed Group Investment Funds) Exemption Notice 2003 by five years so that the 2003 Notice now expires on 30 April 2013. The notice also revokes clauses 16 to 19 of the 2003 Notice, which are now redundant.

Takeovers Code Exemption Notices

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

• Takeovers Code (NZ Airport NC Limited) Exemption Notice 2008
  This notice granted NZ Airport NC Limited (in respect of its partial offer to acquire 39.53 percent of the fully paid ordinary shares in Auckland International Airport Limited not already owned by NZ Airport) an exemption from rule 24(2)(b) of the Code to allow expiry of the offer period on 13 March 2008, as stated in its offer document. Under rule 24(2)(b) the NZ Airport offer was required to close no later than 12 March 2008.

New Zealand Exchange (NZX)

NZX launches Kauri Bond Indices following investor demand
On 1 May 2008, NZX announced the introduction of the NZX Kauri Bond Indices, a new set of indices for debt market participants. Kauri Bonds are debt securities issued in New Zealand dollars, by non-resident issuers. The Kauri Bond Indices, developed in conjunction with ANZ, create benchmarks for the Kauri Bond market.
Click here for more

NZX Listed Finance Company Update
On 18 April 2008 NZX requested all listed finance companies, and listed companies with significant finance company subsidiaries provide information to enable greater transparency and confidence in the listed finance company sector. The information required was to:

• confirm that they are in compliance with their continuous disclosure obligations under the NZX Listing Rules; and
• provide a set of salient operating metrics to ensure the market is fully informed; or
• where any company considers these metrics are not relevant, provide their rationale.

Click here for more

Ministry for the Environment

ETS move would allow extended support for exporters
Prime Minister Helen Clark has announced that the Government would be proposing that free allocation of carbon units under the emissions trading scheme (ETS) framework would be extended for a further five years beyond 2013. This would mean the provision of 90 percent of free allocation for agriculture and trade-exposed industry continues until 2018, and would then be phased out until 2030.
Click here for the full press release

General Equilibrium Analysis of Options for Meeting New Zealand's International Emissions Obligations
A report summarising general equilibrium modelling undertaken by Infometrics for the Government's Emissions Trading Group and the Climate Change Leadership Forum since October 2007 has been released. Climate Change Minister David Parker says that it "shows emissions trading is an effective approach to reducing New Zealand's greenhouse gas emissions in the long term."
Click here for the press release
Click here for the full report

Guidance for Voluntary, Corporate Greenhouse Gas Reporting: Data and methods for the 2006 calendar year
This publication gives guidance for corporations on voluntary Greenhouse Gas (GHG) reporting, including emission factors. It is intended to help those corporates that wish to voluntarily monitor and report greenhouse gas emissions on an organisational basis for their New Zealand operations.
Click here for more

Electricity Commission

Grid Upgrade Investment Review Policy
The Electricity Commission has prepared a draft Grid Upgrade Investment Review Policy ( GUIRP ) following a joint working group with Transpower set up in April 2007. The GUIRP's purpose is to promote an effective process for the preparation of investment proposals by Transpower, as part of the company's wider grid-planning process, and the review and approval or rejection of those proposals by the Commission. It provides a framework within which the Commission and Transpower will interact during the process and provides guidance to interested parties on how Transpower and the Commission will interact with them.The Electricity Commission has issued a consultation paper on the draft GUIRP:

• explaining the development of the GUIRP;
• setting out the purpose history and principles of the GUIRP; and
• seeking comments from interested parties on key aspects of the GUIRP.

Submissions closed on 5 May 2008.
Click here to access the draft GUIRP
Click here to access the consultation paper

Proposed changes to Interposed Model Electricity Contracts
The Electricity Commission has issued a consultation document "Proposed changes to Interposed Model Contracts". The consultation covers three model contracts:

• Guidelines for Domestic Contracts for Delivered Electricity - Interposed (MDC Guidelines);
• Model Domestic Contract for Delivered Electricity – Interposed (MDC); and
• Model Use of System Agreement - Interposed (MUoSA).

The consultation document discusses proposed changes and provides marked up copies of the model contracts and guidelines. Submissions close on 30 May 2008.
Click here for more

Minor Offer and Dispatch Rule Changes
The Electricity Commission is considering some rule changes to parts A and G of the Electricity Governance Rules 2003 in order to resolve some minor issues. The proposed changes are to:

• create an obligation to revise reserve offers in section II of part G;
• remove duplicate dispatch compliance provisions in section III of part G;
• revise the obligation to comply with dispatch instructions in section III of part G to remove conflicts with part C;
• amend the definition of bona fide physical reason in Part A;
• revise the timetable for supplying "2-hour rule" reports in section II of part G;
• clarify inter-relationship between energy bids and interruptible load reserve offers section II of part G; and
• correct various incorrect rule cross references.

Submissions close on 27 May 2008.
Click here for more

New Zealand Commerce Commission (NZCC)

Media releases

The NZCC has issued the following media releases:

Mergers and Acquisitions

• Vita NZ cleared to acquire assets of Pacific Brands
  The NZCC gave clearance on 24 April 2008 for Vita New Zealand to acquire all of the New Zealand foam, flooring and bedding businesses of Pacific Brands.
  Click here for more

Market Behaviour

• Commerce Commission issues Maui Pipeline Open Access draft determination
  The NZCC has issued a draft determination in relation to an application under section 58 of the Commerce Act by two Todd companies in relation to access to the Maui pipeline.
  Click here for more

Telecommunications

• Commerce Commission considers 0867 High Court judgment
  The NZCC is reviewing the decision released by the Auckland High Court which found that Telecom did not use its dominant position in the market for fixed line retail telephone services to residential customers or have an anti-competitive purpose when it introduced its 0867 package in 1999. The 0867 dial-up package meant all residents were charged for calling their ISP unless they dialled the pre-fix 0867.
  Click here for more

• Telecom cleared to renew radio spectrum management rights
  The NZCC has cleared Telecom New Zealand Limited to acquire the management rights from the New Zealand Government for the radio frequency range between 825.015 and 840 MHz, together with the corresponding natural pair management rights in the 870.015 – 885 MHz range.
  Click here for more

• Commission releases 2007 telecommunications market monitoring report
  The NZCC has released its 2007 telecommunications monitoring report analysing the state of New Zealand telecommunications markets.
  Click here for more

Consumer issues

• TradeMe community works with Commerce Commission to ensure cot safety
  The NZCC has praised the actions of the TradeMe community after an investigation into children's cots being offered for sale via an online auction.
  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 grants informal clearance of Pact Group's proposed acquisition of Brickwood
  The ACCC will not intervene in the proposed acquisition of Brickwood Holdings by the Pact Group.
  Click here for more

Telecommunications

• Telstra discontinues appeal against Federal Court findings of misleading Next G coverage claims
  Telstra has withdrawn its appeal against the Federal Court's December 2007 ruling that it engaged in false, misleading or deceptive conduct in relation to the coverage available on its Next G mobile network.
  Click here for more

• ACCC issues Telstra accounting separation report for December quarter 2007
  The ACCC has issued its eighteenth report under the enhanced accounting separation regime for Telstra.
  Click here for more

• Notification of telecommunications access dispute
  The ACCC has received notification from Netspace Networks Pty Ltd of an access dispute relating to Telstra's supply of the Line Sharing Service under Part XIC of the Trade Practices Act 1974.
  Click here for more

• ACCC issues tenth Telstra accounting separation current cost report
  The ACCC has issued the tenth current cost accounting report relating to Telstra for the period of July – December 2007.
  Click here for more

• Federal Court makes declaration on scope of FOXTEL's digital pay TV service undertaking
  On 28 March 2008 the Federal Court declared that, in essence, FOXTEL's special access undertaking for its digital Pay TV set top unit service applies only to those set top units that are actually in use by FOXTEL subscribers.
  Click here for more

• ACCC proposes to grant Telstra local carriage service and wholesale line rental exemptions
  The ACCC has issued a draft decision proposing to grant Telstra exemptions from its obligations to supply two "declared" services in parts of metropolitan Australia.
  Click here for more

• Telecommunications draft principles and prices, access terms issued
  The ACCC has released for consultation an amended pricing principles determination for the unconditioned local loop service and an accompanying report.
  Click here for more

• ACCC issues final Telecommunications Transmission Cost Model to guide pricing of the service
  The ACCC has issued the final version of the Telecommunications Transmission Cost Model. The model has been designed with the flexibility to calculate cost-based pricing for backhaul on any land based (terrestrial) or under sea (submarine) telecommunications transmission route in Australia.
  Click here for more

Access

• ACCC issues draft decision on ARTC interstate rail access undertaking
  The ACCC has issued a draft decision regarding the Australian Rail Track Corporation's (ARTC) interstate access undertaking application.
  Click here for more

• ACCC issues draft legislative instruments on digital radio access regime
  The ACCC has issued draft legislative instruments–decision-making criteria and procedural rules–seeking stakeholders' views on the access regime that will apply to digital radio.
  Click here for more

Consumer issues

• ACCC appeals aspects of Prouds decision
  The ACCC has announced that it will appeal aspects of the Federal Court's decision in the Prouds case relating to the significance of previous sales at the 'Was' price in 'Was/Now' advertising. The matter is listed for call over before the Full Court on 30 July 2008.
  Click here for more

• ACCC targets sunglass retailers for non-compliance with mandatory standard in retail blitz
  A retail blitz on two major shopping complexes has targeted sunglasses that fail to comply with the prescribed mandatory product safety standard.
  Click here for more

• ACCC does not consider Bakers Delight engaged in unconscionable conduct towards franchisees
  The ACCC has announced that it has concluded its investigations into allegations that Bakers Delight engaged in misleading and deceptive and unconscionable conduct towards franchisees in operating its franchise system and has decided not to take any further action.
  Click here for more

• Court declares Arnott's biscuit packaging misleading
  Packaging of a number of Arnott's biscuits in the Snack Right range have been declared to be misleading under final orders obtained by consent from the Federal Court, following Australian Competition and Consumer Commission action.
  Click here for more

• Laura Ashley amends dual pricing practice
  The ACCC has accepted court-enforceable undertakings from Laura Ashley (Australia) Pty Ltd in respect of two-price advertising whereby Laura Ashley adopted a promotional strategy based on establishing a 'regular price' for a product line by launching the product in a limited number of stores for a limited time. Subsequent supply to all other stores Australia-wide and subsequent discounts all relied on the 'regular price' as the starting point for any discounts or sales.
  Click here for more