Regulation not on the agenda: Cullen
Minister of Finance Michael Cullen has told advisers that regulation of their industry is not on the immediate work programme of the Ministry of Economic Development.
Tuesday, July 18th 2000, 12:00AM
"The current work programme focuses on improving the general robustness of our securities law to enhance investor confidence."
Currently the Government is focussed on a takeovers code, improvements to the insider trading law, a review of laws relating to insolvency and changes to the Securities Act which make it more flexible and workable.
Despite this there is still a feeling within the industry that regulation could quickly pop to the top of the Government's agenda.
Financial Planners and Insurance Advisers Association president Andrew Charles, told the association conference in Wellington last week that "the issue of regulation isn't going to go away."
He says the association, in conjunction with the rest of the industry, needs to come up with a proposal which will satisfy any demands put on advisers, but not be draconian as the one in the United Kingdom.
While Dr Cullen has downplayed the regulation issue, another senior Government minister has expressed surprise that the advisory industry was not regulated.
His influence combined with Tukituki MP's offer to support a private members bill on the issue could see it quickly move to the top of the Government's agenda.
Cullen says if there is sector regulation it needs to be "smart or appropriate regulation (which) clearly address the problem or the issue at stake - for example the informational disadvantages of consumers and/or investors."
He says the benefits should outweigh the costs which include, compliance costs, enforcement costs, fiscal costs to the regulator and behavioural changes.
"It should be transparent, consistent, stable and predictable," he says.
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