News
Government updates progress on its action plan for capital markets and the Financial Markets Authority
Yesterday, the Government released an update on the progress with its proposed action plan for capital markets. This was followed shortly after with the Government's announcement of the Establishment Board of the new integrated market conduct regulator, the Financial Markets Authority.
The progress report indicates that the Government's action plan is largely on track, although priority is being given to some of the Capital Market Development Taskforce's recommendations at the expense of others.
Earlier this year the Government announced its intention to establish the Financial Markets Authority and make changes to improve the regulation of KiwiSaver schemes. Cabinet has agreed to fast-track the implementation of these changes and legislation is now expected to be in place by the end of 2010.
The progress report has provided an update on a range of other initiatives:
- The planned April release of a discussion document for the review of the Securities Act has been delayed until June. However, there is no indication that this will cause the implementation date (October 2011) to be moved back.
- Cabinet has agreed to fast-track implementation of a centralised website for disclosure documents and this initiative is expected to be in place by the end of 2010.
- The Takeover Panel's recommendations to change the thresholds for the application of the Takeovers Code are to be considered shortly by Cabinet for inclusion in the Regulatory Reform Bill.
- Changes to the Overseas Investment Act have been delayed as Ministers consider further the preferred package of amendments. A report is now expected to be provided to Cabinet by the end of June.
- The Ministry of Economic Development and venture capital groups have been working on ways to support the development of the venture capital market and options for attracting offshore venture capital funding. A paper is expected to be presented to the Minister in June.
Significant progress has already been made on a range of other recommendations made by the CMD Taskforce, including the Taskforce's recommendation to reduce the thin capitalisation "safe harbour" threshold for inward investment which the Government included in the recent Budget. The Government is continuing to advance its aim that New Zealand becomes a hub for financial services in the Asia Pacific region. The International Fund Services Development Group has been formed and is due to report back to the Government next week.
The Government has also announced the composition of the Establishment Board of the FMA. The FMA will consolidate the powers and functions of the Securities Commission, some of the functions of the Registrar of Companies and the Government Actuary, and some of the regulatory roles of NZX.
The Establishment Board comprises nine members and will be chaired by Simon Botherway. The Establishment Board includes representatives of the current regulatory bodies, the Securities Commission, the Registrar of Companies and NZX. The Establishment Board has responsibility for setting the strategic direction of the FMA, developing a statement of intent and an organisational structure and a work plan to give effect to the strategic direction of the FMA.
To view the Government's updated action plan click here or visit the Ministry of Economic Development's website at www.med.govt.nz/cmdtaskforce.
We will provide you with further updates on developments as they occur. In the meantime, if you would like to discuss any aspect of the Government's action plan or the nature and timing of any follow-up, please contact your usual Bell Gully adviser.
