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:
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.
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.