6. MARYAN STREET (Labour) Link to this
to the Minister of Commerce
Has the Minister received a response from the Securities Commission in relation to her request that they meet with trustee companies to find ways of improving the current regulatory environment for finance companies; if so, what was that response?
Hon LIANNE DALZIEL (Minister of Commerce) Link to this
On Thursday last week the Securities Commission provided me with proposals to ensure that all trust deeds provide trustees with robust powers to get the information they need to carry out their duties in the interests of investors. The proposed changes focus on requiring best-practice reporting by issuers to trustees, including monthly reports on liquidity, asset quality, reinvestment rates, and any breaches of financing arrangements with third parties; enabling the trustee to engage at the finance company’s expense an expert to report on the company’s true financial position; and, thirdly, empowering the trustee to appoint an additional auditor if it is not satisfied that the auditor appointed by the company has sufficient experience or capacity.
Has the Government considered the Securities Commission’s proposals; if so, what steps does it propose to take in response?
Hon LIANNE DALZIEL Link to this
Yes. Cabinet noted the Securities Commission’s proposals at its meeting yesterday, and it has decided to implement the recommended changes by facilitating the making of the regulations, which are currently being drafted. The amended requirements will automatically become part of every existing trust deed and every new trust deed, and will, therefore, apply to all finance companies operating in New Zealand. I am pleased the Securities Commission has acted so promptly within existing frameworks to promote best practice across the sector.
Simon PowerWhat assurances can the Minister give the House that the Securities Commission is aware of all finance company activity, as a report released late last week indicated that the Securities Commission had not known of the existence of Finance and Investments; and can we be assured that the commission is on its game as far as any other businesses operating below its radar may be concerned?
Hon LIANNE DALZIEL Link to this
An investigation is going on into that matter, and I will not comment on it in the meantime.