Financial Advisers Bill

SIMON POWER (National—Rangitikei) Link to this

I have to confess that I may have misled the House during the second reading of the Financial Advisers Bill. I made the statement that advisers had told the House that only three clauses of the original bill would remain in the event that matters were completely redrafted from start to finish. Now that I have had a closer look at the bill, it seems there are only two: clauses 1 and 2. In the bill as reported back to the House it now seems that pages 9 to 70 have been struck out, with a fresh start being made on page 70 with clause 3, relating to the purpose of the bill, which is, of course, what we are here to discuss in the Committee stage today.

If we work our way through Part 1, and I know we are anxious to take a few calls—not several calls, but a few calls—on each part as we work our way through the bill, we find that the stated purpose “to promote sound and efficient delivery of financial advice, and to encourage public confidence in the professionalism and integrity of public advisers” is a pretty good summary of where we are at today. As I said in the second reading, it is impossible for any legislature to attempt to pass legislation to eliminate risk, and nor should a legislature attempt to do such a thing, because risk goes hand in hand with return. But this legislation seeks to require disclosure by financial advisers, in order to ensure that decisions about whether to use a financial adviser are informed. It requires competency on the part of financial advisers to ensure that this advice is available to investors and consumers, requires that they have the necessary experience, expertise, and integrity—I am not quite sure how one legislates for integrity—to effectively match a person to a financial product, and requires that financial advisers are held accountable for financial advice that they give.

Those are three broad and meritorious statements. The point of the three of them is that where an investor approaches a financial adviser and seeks advice on a financial product, whether it be a simple or complex product, or where an investor seeks advice on a more complex financial transaction that is to do with, for example, reverse mortgages, different superannuation schemes, and property investment companies, the idea is that a certain level of disclosure and a certain level of competency should be available to the investor at the time that that advice is sought. The purpose clause attempts to capture the essence of the following: it is not the intention to legislate to prevent the loss of money in investments, because that would have the outcome of putting the Government into the position of being a guarantor, effectively, of investments, and that is not the way that markets work, nor is it appropriate for Governments to find themselves in that position. But investors are entitled to a degree of advice and competency from those from whom they seek advice, so that they are put in a position where they are best able to make decisions.

What we heard at the Finance and Expenditure Committee was quite interesting, on some days. On one particular day, I recall the committee receiving a submission that went something like this: there were some financial advisers who were not disclosing the commissions that they were receiving when a particular product was sold, but, worse than that, where they were conceding that a commission, or a benefit, was accruing to them if a particular product was sold, not all of the benefit from, or the discount on, that product selection was being passed on to the investor. In fact, on some occasions, we were told, a portion of that benefit was being retained by advisers themselves. We found, at that point, that the legislation needed to be broad enough to make sure that disclosure did cover off those sorts of situations.

I think the other important thing about the disclosure regime is that even investors who consider themselves to be quite skilled and thorough—investors who may have a legal background, or may have been in Parliament for some time—and who go along to their financial adviser out of a sense of nervousness, to make sure that their investments are all in the right place and have sufficient protection, would find themselves in an unenviable situation if they were confronted with a 5 or 6-page document to sign on the spot. What we need to avoid with this legislation is the situation where investors are put in that situation and told: “This covers that stuff. Just sign here, and everything will be fine.” Even the most careful and confident of investors would not want to be confronted with that type of paperwork at that time, prior to receiving the advice, and feel as though they must execute those documents.

This legislation has to avoid that situation occurring, and I am sure the Minister in the chair, the Hon Lianne Dalziel, will give us an assurance in that regard. The legislation has to avoid the situation where an investor is simply presented with a wad of documents, told to sign them on the spot before financial advice is given or received, and then that, in effect, releases the financial adviser from any of the obligations contained in this legislation. The short question to the Minister is, can a financial adviser contract out of the provisions of the legislation by presenting the investor with a disclosure document that the investor executes at the point the advice is received, and are we making sure that pushing on the investor, at the time that financial advice is offered, will not create any problems for the investor at that point? I think we are all keen to know exactly how, in practice, the Minister sees that particular set of circumstances working, because the last thing we want to do is to put in place a necessary and comprehensive piece of legislation to deal with financial advice, and then find from day one that the financial adviser can simply contract out of it, or assume that those obligations are discharged on the spot because a particular document has been executed. We will be interested to receive the Minister’s advice on that point.

Let us move then to clause 5, “Interpretation”. We see that “document” is well defined there, as is “Commissioner for Financial Advisers”. I say that is an exceptionally good idea and one that National is supportive of. Although “financial adviser” is defined in Part 1, the definition refers to “section 8”, or clause 8 of the bill, which is slightly further on. That definition warrants some attention at this point, but before I come to it I just point out that Part 2 deals with financial advisers and their disclosure and conduct obligations, but the definition of “financial adviser” is contained in Part 1, just in case members are concerned about that.

Clause 8 states: A financial adviser is an individual who performs a financial adviser service …”—yeah right! That does not really clear very much up. Clause 10 defines a “financial adviser service” as one performed by a person who gives financial advice, makes an investment transaction, or provides a financial planning service. So I have one more question for the Minister, and it relates to the definition of “financial adviser service”. When we were on the select committee, we heard about the distinction between financial advice and opinion. I note that the reference to opinion is not contained in the definition of “financial adviser service”, and I would be interested in hearing from the Minister on the issue of an opinion that is given by a financial adviser. Clause 11 defines when a person gives financial advice. I presume that financial advice is—oh, here we go. Clause 11 states that a person who gives financial advice “makes a recommendation or gives an opinion or guidance”—I take it all back Minister; it is crystal clear there—“in relation to acquiring or disposing of … a financial product.” So that issue is covered; I give my apology to the Minister.

But we look forward to hearing from the Minister about the signing of documents at the point of investment advice being sought, and what that means for any downstream effects or for the protection that the legislation may offer.

CRAIG FOSS (National—Tukituki) Link to this

It is with great anticipation that I rise to speak in the Committee stage of this bill. I would like to touch on clause 6, “Act binds the Crown”. Obviously, the Crown is exempt from the regulations around this bill. But, firstly, I shall turn to clause 3, the purpose clause.

Clause 3 states: “The purpose of this Act is to promote the sound and efficient delivery of financial advice, and to encourage public confidence in the professionalism and integrity of financial advisers, by”. I was thinking somewhat laterally, as I do, about a situation in which the Crown were to give financial advice, then to renege on that financial advice—and I know that the Crown is exempt from this legislation. I give the example of the “chewing gum tax cut”, where people were given advice in a Budget, they made financial decisions and plans based on that advice, then the Minister of Finance reneged and took the “chewing gum tax cut” off the table. I would be interested to hear the Minister in the chair, the Hon Lianne Dalziel, make any comment at all on that matter. I know that it is a lateral thought, but if the public are to have confidence in the financial services industry, as is outlined in the purpose clause, then surely they need first of all to have confidence that the regulator, the Government of the country, will be true and hold to its word.

I turn to the interpretation clause and the definition of “advertisement”. It is plainly obvious that it is some form of communication. We recently had an example in Wellington that is not addressed by this bill or the disputes bill, but may fall under the Commerce Act, I guess. An organisation had a billboard outside its retail outlet offering funds at 8 percent interest, and at the bottom of the advertisement was the statement “8 percent p.w.”—per week. Most people who went in there to borrow money had no idea what “p.w.” meant. In fact, 8 percent interest per week compounded amounts to thousands of percent per annum. Under the Commerce Act, that organisation was being quite open, because the billboard stated “p.w.”, but the people using that service did not have the financial literacy to know what it meant. Perhaps we need some more financial education in the public domain, in our schools—and probably in Parliament.

I go back to a point I made before. Someone was interjecting on one of our previous speakers, who was speaking about real estate. I note the definition of “category 1 product”. Whoever interjected said that real estate is excluded, but the definition states that “category 1 product” means “any estate or interest in land for which a separate certificate of title can be issued …”. There you go! That is a derivative, because someone can own the land, can use it as a guarantee, can use it as collateral, can use it as security, and, way down the chain, someone can borrow against it to buy a car—someone whom the landowner has never ever met. There may be three people in the chain. That is why real estate is a category 1 product. I would be interested to hear the Minister clarify that. I do not whether she was the interjector. I give her the benefit of the doubt—perhaps she was not.

Complex derivatives, etc., are also category 1 products. The definition refers to futures contracts, or any other contracts that may be specified along the way. The crisis we currently have in the financial markets is in and around those complex products. Events that occurred initially in New York and Cleveland are affecting people right down here in New Zealand. Unfortunately, or fortunately, that has been part of the global financial system we are in.

In looking at clause 5, “Interpretation”, I point out the obligations of financial advisers, and who they are. As earlier speakers have noted, they are not liable for the return on any investment, as long as everything is declared upfront and disclosed, be it a category 1 product or a category 2 product. That is all well and good, but we must distinguish what they are, because in these current times, when New Zealand is in a recession, many people are looking at the advice they were given. They need to determine whether they were given the full information, and if they were not given it, whether that impacted on the return on their investment. Someone may advise someone else to invest in, say, Australian equities, and that adviser may forget to give that person the relevant foreign exchange advice. As I said earlier, it is all about risk.

I would be interested to hear other members speak about trust accounts. I refer to the definition of “trust account records”. Under this bill, we interpret “trust account records” to mean “records relating to a trust account; and (b) includes any information that relates to a trust account and that is recorded or stored by means of any tape recorder, computer, … and any material subsequently derived from information so recorded …”. As we all know, and without going into the detail, interpretations of trust accounts and what goes through them—the interpretation of them—and the impact on not only the trustees but the beneficiaries of those trusts, declared or otherwise, is a very pertinent issue before this House and before the public right now. On issues like that, the public has to have full confidence that the legislators in this House abide by the same rules that we ask the public and the financial advisers for whom we are regulating to abide by. We should put ourselves under the same microscope and regulation that this bill will put the financial sector under. Thank you, Mr Chairman.

The CHAIRPERSON (Hon Clem Simich) Link to this

The question was that Part 1 stand part, and we have—

SIMON POWER (National—Rangitikei) Link to this

This is a slightly more complex area than Part 1, and one of the most interesting measures in this part is clause 12. Clause 12 relates to when a certain person is not performing a financial adviser service when giving advice or doing a transaction. Of course, my colleague Craig Foss would have noted that real estate agents are mentioned in clause 12(g). I am not sure whether that is a desirable policy outcome, but I would certainly be interested in what other members think on that issue. Likewise, although we are fully supportive of the legislation, as members know, I am not 100 percent sure that also excluding lawyers and chartered accountants is a particularly good policy initiative, in the sense that in much of the work that I recall doing as a lawyer, during the short time that I had in that job, there was certainly a financial component to the advice that was given on a reasonably regular basis. I am sure that is equally so, or more so, in the case of chartered accountants, although I have never been in that profession.

One thing that is particularly interesting about clause 12 is the very important inclusion of a person providing free budgetary advice as part of a budgetary advice service offered by a non-profit organisation. As is so often the case at select committees, some of the most powerful submissions that came before the Finance and Expenditure Committee were not from the big business organisations or the big unions, but from the individuals who come before the committee. One particular individual, whose name I am afraid escapes me, came before the committee to express her concern that budgetary advice offered by citizens advice bureaus, or similar sorts of budgetary services, would, on a reading of the bill, be caught by its provisions. I think that the inclusion of clause 12(k) is an extremely important one, given that we certainly do not want to put people who are giving voluntary budget advice into a difficult position when they are undertaking what is, essentially, an unpaid voluntary community service.

Other people are included, of course, in the category of non-performance of financial advice services, such as teachers, lecturers, journalists, or State services employees who give advice in the course of working in those occupations, as are a Minister of the Crown and a member of Parliament—both in the course of performing their duties in those respective roles. As I have said, the list includes a lawyer, a chartered accountant, a tax agent, a real estate agent, a member of the board of a Crown entity, a Crown organisation, the Reserve Bank, a person providing free budgetary advice, and an employee giving advice to, or making an investment transaction on behalf of, his or her employer.

There are some references to KiwiSaver, investment transactions, and the offerer or target company in the course of a takeover. That is quite an interesting little inclusion there. In particular, the choice of words in clause 12(p) is, I think, quite odd, because we are saying that a person does not perform a financial adviser service if the person is “an independent adviser giving advice in the exercise of that person’s functions under the Takeovers Code”. The use of the language in the first part of that sub-definition would make one think, on first reading it, that that is exactly the type of person who is supposed to be captured by this legislation. The Minister is shaking her head, so no doubt we will hear from her on the issues relating to the Takeovers Code that need the provision of a special exemption.

Then there is the case of a person giving general commentary relating to a financial market. Again, that is quite an interesting little definition, because we could have regular columns from financial advisers, where one would write in and ask, say: “Dear Mr Foss, I have $10,000 sitting in a bank account. What is your recommendation? Should I put it into KiwiSaver or should I use it to pay my increased ACC levies?”. In that case, with regard to the response that Mr Foss gives in the media—hypothetically, of course—I would need to be convinced that the definition of general commentary is enough to exclude the appropriate general comments made about the nature of some of these investment schemes. But, of course, if one of these commentators makes the remark, in passing, that today the ASB is offering 9 percent over 30 days. as opposed to the BNZ offering 8.75 percent over the same period of time, and offers no specific advice in respect of those two current products on the market, I ask whether that steers an investor in a particular direction by its nature or inference, or whether it is general commentary, thereby excluding itself from that definition.

I suspect—and others in the National Party have said this during the second reading debate—that some areas of refinement will still be needed in this area after the election, regardless of who sits next to you, Mr Chairman, during the Committee stage of that refinement. I wonder whether we have made that provision certain enough. I see that the officials are busy chatting about these matters, and I would be interested to know exactly where we are heading with that particular point.

It is also interesting to note—

Hon LIANNE DALZIEL (Minister of Commerce) Link to this

I thank the member. I think that this is an appropriate time for me to do the mea culpa. People have asked who is to blame for the quality of the original bill as introduced, and I accept full responsibility for that. But there is one thing that I will say in defence of the line I took in terms of the occupational approach.

CHRIS TREMAIN (National—Napier) Link to this

I want to pick up on what the Minister was speaking about during the commencement of her speech. She felt that the process she had undertaken had been a good one, in terms of spreading quite a large net in a catch-all situation, and then expecting people to put their hands up to say: “No, leave us out of this process.” I want to discuss it in terms of the danger of bureaucracy, which is something National bangs on about, in terms of bureaucracy creep and getting down to people who should not be involved in unnecessary regulation. I guess no more can it be said for the budget advisory community, which is referred to quite well in clause 12(k), whereby budget advisers are exempt under the auspices of this legislation. I think it is important to understand that initially budget advisers clearly came within the catch-all of the Act. As the Minister has quite rightly said, these are the people in our communities who deal with people who do not have a lot of money, such as beneficiaries who might have only a couple of hundred dollars, week in, week out, to work with. I am talking about citizens advice bureaus, and in my own electorate of Napier, the Napier budget advisory service that is run by two or three volunteers who sit up there in Community House. I am talking about the Napier Family Centre budgeting service, which has a number of volunteer budgetary advisory people.

They deal with members of our community who do not have a lot of money to rub together. We are not talking about the investment of life-savings of $200,00, $300,000, or $400,000 into different investment categories. We are talking about people who have had a pretty tough life and are struggling to make the best of $200 or $300. This bill initially looked to encapsulate the budget advisers within the legislation and to put regulation around them. Funnily enough, one of the first submissions that came to the table was from the budget advisory association. This association supported the legislation and said that its members should be a part of the additional regulation. I could not believe it, but that is what it said. But back in our electorate offices we were getting visits from budget adviser volunteers saying: “Crikey, we don’t need this sort of regulation. If we have to be accredited, it’s going to mean that we will need continuing professional development and there will be costs involved.” Quite frankly, a whole lot of volunteers will leave this service, and it will not be available to some of these hard-working Kiwis.

Then the Minister said she was keen to get rid of it. But, actually, I say to the Minister, one of the first amendments to the clause that came back from the officials, was that budget advisory services would be exempt, but only those funded by the Ministry of Social Development. I do not know whether the Minister remembers that particular clause, but that is what came back from the officials in the first instance. It was the National members of the committee, I have to say, who put up their hands and said: “Look, this will get rid of all the people who are involved in the voluntary sector.” As long as it is not for profit, that clause has to change. We felt it was important that the voluntary sector was exempted totally, and I am pleased to see that happen.

People often bang on about National going on about bureaucracy, but this is the type of bureaucratic creep that we get through this type of legislation, and that is just crazy. Certainly it is not necessary for volunteers in the voluntary sector.

I will give another good example. I was up in Māhia the other day, with the volunteer firefighters. Volunteer firefighters are now required to have New Zealand Qualifications Authority qualifications, for goodness’ sake! We are almost getting rid of the good Samaritan opportunities in our community, and that is just crazy. We have to make sure that we allow volunteers, whether they be budget advisers or firefighters, to continue to do their work, without massive bureaucratic creep and without additional costs. It is important that the officials consider those volunteers out there and the work they are doing, and that they do not unduly bring a whole lot of additional bureaucracy into it. I saw that happening firstly with the budget advisers. We are not axing them. We will take out only the budget advisers who are funded by the Ministry of Social Development, and then finally all budget advisers will be totally exempt. Thank you, Mr Chair.

SIMON POWER (National—Rangitikei) Link to this

This is the part that attempts to deal with how to define authorised financial advisers and qualifying financial entities. I think that it is the most elegant part of the legislation but it is an extremely tricky thing to legislate for, and the officials are to be congratulated on coming up with such a neat way of categorising advice, in such a short period of time. This is essentially the part of the bill that creates the tiered approach, if you like, and National is supportive of that approach, as we modestly suggested throughout the process that such an approach would be appropriate.

One thing about institutional accreditation still sits in the back of my mind. I am pretty sure, although I stand to be corrected by Charles Chauvel or any other member of the committee who was there at the time—in fact, the officials might be able to correct me, directly through the Minister—but I think it was Sam Stubbs from Tower who came before the committee and made a comment that went something like this. When it comes to dealing with a professional after something has gone wrong, and what I think he termed the eye-to-eye conversation across the kitchen table has been had with that individual about the particular advice or product—in fact, I think he drew a parallel with a dentist, if I recall correctly—the responsibility should lie with that individual, in the event that the financial advice has proved to be inadequate or inappropriate. That issue has sat for the last 2 or 3 months at the back of my mind—a reasonably crowded and cluttered place for it to sit, over the last 7 or 8 weeks—

Hon LIANNE DALZIEL (Minister of Commerce) Link to this

I am happy to respond to Simon Power’s comment on accountability and say that that is the reason why the qualifying financial entity approach that has been adopted in the Financial Advisers Bill is, as the member himself described, such an elegant solution. It says that the qualifying financial entity, which is required to meet a standard in order to have that status acquired through the Securities Commission, takes responsibility for defining who falls on either side of the line. On one side of the line we have the ones who are to be individually authorised and therefore individually accountable, like any other authorised financial adviser. On the other side of the line we have the category 2 advisers, who are dealing with the lower-level products based on that risk assessment. I think that is a neat way of allowing the institutions to take responsibility for employees and agents who are operating to sell, essentially, products that are in that lower-level risk category; the higher-level advisers will be required to be authorised financial advisers.

To go back to a comment another member made about the sequence of events around budget advisers, I say that is a very good example to use to explain how we have got to this particular position. When we started off by defining people by their particular occupations, we ended up in a situation where budget advisers necessarily were included in the definition because it was so broad. We are trying to bring that back but at the same time we are very mindful of the fact that if we exclude an occupation, then all of a sudden people will redefine themselves as budget advisers instead of financial advisers in order to avoid coverage, which is why we tried to link it to the funding from the Ministry of Social Development. That was not the best mechanism. The select committee came up with a better one, and I am grateful to it for that. Then the officials and I have come up with an even better one, which is the one in the Supplementary Order Paper.

But that is the exact point I am making: that the qualifying financial entity actually taking responsibility for dividing the two groups—one requiring the individual authorisation of the Securities Commission and the other coming within the responsibility of the qualifying financial entity—is, I believe, the best of both worlds. We get really good coverage and we get that eye-to-eye contact for those who have made bad professional judgment.

CRAIG FOSS (National—Tukituki) Link to this

I thank the Minister of Commerce and acknowledge those points. I agree with the qualified financial entity part of this bill—Part 3. It is another part that was totally rewritten, and for the better, as we have all acknowledged. I have some questions, though—and perhaps I need to read somewhere else—about the qualified financial entities.

Many of the submitters, particularly the larger players, are already doing something along those lines anyway, so the burden is not huge. They operate across many jurisdictions, and therefore need to keep control and account of who is doing what everywhere. In this mobile world, where one can call a local bank and end up talking to someone overseas, keeping control does become tricky, and the bill acknowledges that we can go only so far here in New Zealand.

Among the three obligations and responsibilities of qualified financial entities that are mentioned in the bill—and I agree that the Securities Commission having that call is exactly right; it is the gateway of all things regulatory around financial markets, along with the Reserve Bank; I think it is a good fit—is to ensure that staff are authorised. Most of them took that on board, particularly the larger ones. They do not really have a problem with it, because all their staff are authorised in some way, shape, or form in order to get into the building, to use their websites, or to do whatever it might be.

They are also obliged to provide a list of names to the Securities Commission, and to keep that list up to date. I would be interested to know what “up to date” means. I had a quick look at the definitions and I did not see it there. Common sense would say it meant quarterly reports, or something like that, but it could cross a financial year, or it could be an entire cycle. What is up to date for one qualified financial entity operating here in New Zealand on its own may be different from what is up to date for a qualified financial entity that is incorporated here but is essentially overseas owned. Is there consistency of timeliness? I am sure the Securities Commission would give encouragement and guidance, but perhaps it is one of those areas that the select committee could have defined a bit further. I am open to be advised that the definition is somewhere in the bill.

My colleague Simon Power pointed out earlier that all of us here agree that the single regulator model of the Securities Commission—leaving the expertise in that place—is very good. The bill acknowledges that a Commissioner for Financial Advisers will be appointed. The commissioner will be a member of the Securities Commission, and that is all very well and good. I presume that more funding will be required to enhance whatever operations it does.

Also in this part—and I acknowledge the foresight of this provision—is alignment of the fines outlined in the Securities Act, those in this bill, and those in the Financial Service Providers (Registration and Dispute Resolution) Bill, which I assume we will be talking about this week. There will be consistency across the sector, and that takes away the ability for someone to do regulatory arbitrage, to exploit one piece of legislation over another—to do fine arbitrage, if one likes. In this bill as it was first drafted, there was the possibility of five industry bodies, and one person could have moved around the other bodies.

National members are voting for this bill and this part. We endorse where it has got to now. We endorse the consistency of it, and the recognition of where the expertise lies in this particular sector. I think it is very good. I acknowledge the qualified financial entity model and the authorisation of two tiers, category 1 products and category 2 products—complex and run-of-the-mill, if you like. I think it is a very good fit. Yes, there may be further work to do.

I shall talk a little about the types of institutional accreditation. There are those registered under this bill as category 1 products and category 2 products, and authorised by the Securities Commission. That is nice and clean. There are bound to be some organisations that fall outside or very close to it, but I am sure we will find them on the way through. Having category 2 will totally do away with all the fears of the various insurers, agents, and people who operate call centres for banks. Basically, they are transacting run-of-the-mill business. I acknowledge the Minister in regard to where we have got to on that. On a cost and compliance issue, it was a great leap forward, because everyone had looked on it in horror.

CHRIS TREMAIN (National—Napier) Link to this

I rise to speak to Part 4 of the Financial Advisers Bill, which deals largely with how financial advisers are to be regulated. Essentially, as the legislation is now to be enacted, it will be under the guide of the Securities Commission, which was established in Part 1 of the Securities Act. It was going to be product regulation based under the Securities Act and the Securities Markets Act on the one side, and then, as we have discussed in previous parts of the bill, financial adviser regulation with supervision of both qualified financial entities, as Mr Foss just spoke about, and of the accredited financial advisers, as Simon Power spoke about earlier. Clearly, under the Securities Commission there will be enforcement of the statutory obligations of each of those organisations.

But what is now being proposed in Part 4 is how we are going to regulate financial advisers through the establishment of a Commissioner for Financial Advisers. That is dealt with in subpart 1 of Part 4. The commissioner will be a member of the Securities Commission. If we look back to the legislation as originally proposed, if I recall correctly, we see that the idea was that we would set up a number of bodies under each industry organisation that would then be responsible for the accreditation of the financial advisers within their own industry.

SIMON POWER (National—Rangitikei) Link to this

If I had not received such a pleading look from the Minister Lianne Dalziel not to stand, I would have sat down. I just make the point that Part 5 relates to general provisions and appeal of decisions, the right of appeal of the commission—interestingly, on the issue of authorisation—and the potential decline of qualifying financial entity status. The District Court, apparently, will make those decisions. I suppose on an issue like that there does need to be a procedure for appeal, and I guess, on balance, that the District Court is the appropriate place for that.

SIMON POWER (National—Rangitikei) Link to this

We come to the only two surviving original clauses of the Financial Advisers Bill, which, as we said earlier in the debate, has been completely rewritten, with 61 pages being deleted from the bill.

CHRIS TREMAIN (National—Napier) Link to this

I would like to speak to the enduring clauses of the Financial Advisers Bill, and to beg to differ just slightly with my colleague Simon Power, who claimed there are only two enduring clauses. When we look at the amended legislation in the mark-up version, we see that in fact only one clause remains in the legislation. If we look at page 9 of the new bill, we see that only the title has remained the same from day one. Clause 1 states: “This Act is the Financial Advisers Act 2007.”, and everything apart from that clause has changed. The commencement clause has quite clearly been changed. In the first draft there was an original provision there, but that has actually been changed.