New regulator can restore investor confidence

Labour Party Commerce spokesperson Lianne Dalziel is welcoming the creation of a new regulator for New Zealand’s financial markets.

Lianne Dalziel, who originally set up the Capital Markets Development Taskforce in 2008 to develop a blue print and action plan for the development of New Zealand’s financial system, says she is pleased to see the Government beginning to act on the recommendations in the taskforce’s report.

The Taskforce was established with the following objectives:

o To identify key constraints and key opportunities for the development of New Zealand’s financial system;
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o To identify and debate options to improve the performance of New Zealand's financial system; and
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o To draw up a blueprint for development of New Zealand's financial system.
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"In their report the Taskforce proposed the essence of the model that the Government has announced, which means it should have the support of industry and investors alike,” Lianne Dalziel said.

"Rebuilding confidence in a sector shaken by the finance company failures in New Zealand, coupled with the impact of the global financial crisis, is of vital importance.

“However, there are three elements necessary to ensure its success --strong statutory objectives and principles-based regulation as opposed to detailed prescriptive rules; strong statutory powers to take early and effective action, including issuing warnings to the public and the power to 'call-in'; and sufficient litigation funds to ensure that wrong-doers know that they will be pursued," Lianne Dalziel said.

"They say the devil is in the detail and I shall be looking forward to the legislation that establishes the new Financial Markets Authority, but also (and just as importantly) the discussion document on the review of the Securities Act, which will set the framework for restoring confidence by protecting investor interests, while at the same time facilitating capital market activity.”

ENDS

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