Securities Legislation Bill

Thank you for the call again on the Securities Legislation Bill. We have had a fairly broad and far-reaching debate this evening. We have touched on the issue of sharing information with the Commerce Commission, which I think is something that is a good move, and I have already spoken to that. We have touched on management banning orders, which is an issue that has my support also, subject to the concerns I raised around the severity of some of those orders. Another issue was declaration of contravention and declaration of civil liability procedure. We touched on liability under the Fair Trading Act. We did not touch on the issue of bank term deposits being excluded from the definition of security, and I want to touch on that very briefly. We did talk about information generally available to the market. So it has been a good debate that has canvassed the significant issues.

One area I want to touch on is that in drafting legislation we need to be very careful that we are not creating an impression that we are providing certainty about the market. What we are doing is enhancing confidence in the market, but to say that we can now say to punters there is absolute certainty and confidence in the market would be a mistake. I am sure the Minister does not intend that, but I sound that as a general warning to members and those listening, because it is a very important issue. The investing public must still take responsibility for its actions. Governments and members of Parliament, in framing legislation, can go only so far to give people an even playing field. Their own decision-making ability and the advice that they seek or rely on should be something that they are satisfied with themselves, because there is no such thing as a perfect market.

The issue of bank term deposits was raised at the Commerce Committee by a number of submitters as something that would be too difficult to enforce. Collectively, the select committee agreed that the inclusion of bank term deposits was not particularly sensible. I think it would have been an impossible issue to police. Sanity has prevailed, but what was initially suggested was that those who ring up to put money on deposit would have to go through a paper transaction and declaration that would take a huge amount of time. It would have been an unreasonable impost to put on to people—the banking institutions in particular. So that provision was removed, which was a step in the right direction and helped the National Party come to the conclusion that this was pretty reasonable legislation that we could support with good conscience.

The issue around a research and analysis defence to insider trading is something I have raised in the course of the debate. It is an issue that still concerns me. From going back and looking at the commentary on the bill, I see that it is an issue that has been addressed, albeit that the scope of that defence is very narrow. I reiterate my warning that we do not want the medicine to be worse than the disease because, on balance, I think New Zealand’s capital markets operate very efficiently. Is there room for improvement? Yes, that is why we are trying to draft sensible legislation. But we do not want to get to a point where we restrict capital flows. We must not do anything to undermine the confidence, the ability, or the willingness to participate in the market place of the bright young things who underpin our capital markets, for fear that they might get something wrong. I accept the Minister’s assurances and from re-reading the commentary I think that issue has been reasonably addressed. Again it is something that we might need to be big enough to come back to as a House if it causes concern or starts to stifle those capital flows.

With those remarks, I conclude by saying it has been a good debate. Those who have participated in the debate have done so in a constructive way and I have to say it has been a very satisfying evening’s work.

The National Party supports the passage of the Securities Legislation Bill, but I take the opportunity, in the 25 seconds left, to alert people to tune in to the radio tomorrow afternoon when I will continue to dissect some of the major issues. I am sure that everybody will be waiting with interest. With that, I say that a very cooperative style has been taken in the passage of this legislation.

Progress to be reported presently.

House resumed.

The Chairperson reported the Standards and Conformance Bill without amendment, and that the Committee had divided it into two bills, and progress on the Securities Legislation Bill.

Report adopted.

The House adjourned at 9.56 p.m.