Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Bill

Members, we move now to debate on Part 2, clauses 21 to 36, and Schedule 5—amendments relating to financial benchmarks.

Thank you, Madam Chair. I think I might have stood precipitately on this particular part because I’m particularly interested in the financial benchmarks, but my more substantive question for the Minister is going to be his Supplementary Order Paper 294 that changes the date of commencement for the provisions in Part 2, which will of course come under those clause 1, 2, and 3 debates.

There has been no argument across the importance of this bill, and indeed the importance of ensuring that we are meeting the regulatory requirements of not only trading partners but, particularly, the power—authority—of a large trading bloc, the European Union. So we have no particular issue, and I won’t rise now to raise an issue with the benchmarks themselves, nor who may participate and be the inputs into the sitting of those benchmarks.

My question will come up in the proper part of this bill, which will be clauses 1, 2, and 3, because I don’t believe we are debating the Minister’s amendment that changes the commencement date for Part 2 as part of Part 2. Although the Minister is in the chair, and if he would not mind—slightly a little bit out of sequence—answering the question as to why, at this stage, we have changed the commencement date for this part when it wasn’t a matter that was canvassed at all in select committee. Officials didn’t recommend that we do so and there certainly was no controversy nor disagreement with the provisions as related to financial benchmarks.

So if the Minister is in a position to respond now, it would save a call a little bit later in the evening—to describe why in the SOP that was handed in quite late in the piece we’ve got a split in the commencement dates. So perhaps, given the Minister has talked to his officials and I think he is prepared to say something to that very point, it might be best that I just sit down and allow him to respond.

I think the member has foreshadowed a question that he would have asked later in the debate, and I think the Minister is happy to foreshadow an answer he would have given later in the debate in the interests of progressing this matter.

Not wanting to be out of order but responding to the member’s question, I’ll refer to the document here around the changes to clause 2. Part 1 of the bill has to come into effect on the day after Royal assent. Part 1 previously commenced by Order in Council to allow time for regulations to be made, and regulations are no longer necessary following changes at the select committee, so Part 1 can now come into force immediately after the Royal assent. So the Supplementary Order Paper 294 amends what I’m being told is the backstop commencement date in clause 2(3) from six months to 12 months, and this is to ensure that there is sufficient time to make regulations necessary to support Part 2 of the bill. So I guess in plain English that means that because of the changes that the select committee made, the regulations that we thought we were going to need to have the original commencement dates are no longer necessary. So in my reading of that, I think that we can get on to things a bit quicker.

The question was put that the amendments set out on Supplementary Order Paper 294 in the name of the Hon Kris Faafoi to Part 2 be agreed to.

Amendments agreed to.

Part 2 as amended agreed to.

Schedule 1 agreed to.

Schedule 2 agreed to.

Schedule 3 agreed to.

Schedule 4 agreed to.

New Schedule 4A

The question was put that the amendment set out on Supplementary Order Paper 294 in the name of the Hon Kris Faafoi to insert new Schedule 4A be agreed to.

Amendment agreed to.

New Schedule 4B

The question was put that the amendment set out on Supplementary Order Paper 294 in the name of the Hon Kris Faafoi to insert new Schedule 4B be agreed to.

Amendment agreed to.

Schedule 5

The question was put that the amendments set out on Supplementary Order Paper 294 in the name of the Hon Kris Faafoi to Schedule 5 be agreed to.

Amendments agreed to.

Schedule 5 as amended agreed to.

Clause 1 agreed to.

Clause 2

Clause 2 agreed to.