Government review to include corporate trustees

Issues raised in a recent Companies Office report about the role of corporate trustees in failed finance companies are to be addressed as part of a significant review into the Securities Act, Commerce Minister Simon Power said today.

 

The Securities Act requires trustees to be appointed for many offers of securities.

 

Trustees have powers and responsibilities to look after the interests of investors - the adequacy of these powers and the exercise of them is clearly an issue of major interest.

 

"The Ministry of Economic Development has recently commenced work on a comprehensive review of the Securities Act, and the role of corporate trustees will form a significant part of that review.

 

"I have asked for advice on the timing of the review, in particular opportunities to advance elements of the review more quickly.

 

"One option I am considering is fast-tracking the development of a trustee supervisory model.

 

"This model was suggested by the Review of Financial Products and Providers and would see the Securities Commission playing a stronger role in the supervision of trustees.

 

"The role of corporate trustees is also likely to be considered by the Capital Market Development Taskforce which is due to report to me later this year.

 

"I also welcome a select committee inquiry into the failure of the finance companies, however, the terms of reference will need to be carefully considered.

 

"I am particularly keen to ensure any inquiry does not cut across civil and criminal proceedings being undertaken by regulatory authorities against a number of finance companies.

 

"Many hard-working New Zealanders have lost money in failed finance companies, and given the scale of loss involved, there is a strong public interest in seeing that those who have broken the law are held to account.

 

"A number of actions have already been taken by government in response to the failures.

 

"The Reserve Bank is currently implementing a new regulatory regime in relation to non-bank deposit takers, while the Securities Commission is implementing a new regime for overseeing financial advisers.

 

"It is important we learn all the lessons from these failures and take all necessary steps to address them.

 

"I look forward to reporting on progress on these issues in the near future."