News Round Up
Co-regulation looking likely, Managed funds have a good month, NZX changes indicies, Special interest rate, NZX prepares for options and scam alert.
Monday, June 20th 2005, 4:18AM
Submissions to the Task Force looking at regulation of Financial Intermediaries close today.
It is becoming increasingly clear that the task force is favouring a co-regulatory approach to the issue. Various groups have been asked to write papers for the task force outlining what they think co-regulation would look like and how it would work.
Under co-regulation there would be a government body that set the rules. Underneath that various other bodies such as the Financial Planners and Insurance Advisers Association and New Zealand Mortgage Brokers Association would be self-regulating bodies.
A financial intermediary would need to belong to a self-regulatory organisation (SRO) which operates in his/her area of practice. To become an SRO a body would need to meet a number of requirements including having a code of ethics, disciplinary processes, professional standards etc.
Managed funds have a good month
The latest performance data from research house FundSource shows that managed funds have turned in some quite acceptable numbers recently.
It says New Zealand and international sharemarkets performed well over May, and this carried through to fund returns both in those funds that focus on these sectors and the diversified funds with exposures to equities markets.
The positive returns from New Zealand and international sharemarkets in May have shown that the poor performance seen in March and April was simply a temporary dip in investor sentiment. [MORE]
NZX changes indicies
The NZX is changing the way it calculates indices to bring its ones more into line with the methodology of major international index providers Standard and Poors and MSCI.
Amongst the changes to be phased in are new liquidity criteria designed to reduce unnecessary index turnover, the removal of imputation credits in calculations of returns, and a new name for the NZSX indices.
Consistent with this change, the NZSX SCI Index will become the NZX SmallCap Index, comprising companies with a market capitalisation of up to $150 million, including companies such as Metlifecare, Skellmax Industries and NZX.
Changes to the liquidity criteria will take effect immediately. The new calculation for returns will come into force on October 1.
Special interest rates
St Laurence Mortgages is offering a new special interest rate for its debenture stock of 9.00% for a term of 3 years. To compare rates go to www.depositrates.co.nz
NZX prepares for options trading
The Securities Commission has declared that share options listed and traded as NZFOX share options are futures contracts under the Securities Markets Act. These share options will be traded on the Sydney Futures Exchange.
“This declaration will give the market certainty about how these new products will be regulated”, Securities Commission general counsel Liam Mason says. NZX applied for the declaration so it can launch NZFOX share options on or around 28 June 2005.
Scam alert!
The Securities Commission has began a campaign to alert New Zealanders to share scams promoted by people who telephone from overseas. A new website (www.sharescams.org.nz) explains how these international fraudsters con New Zealanders into buying or selling shares in little known overseas companies.
The commission says New Zelanders have lost at least $30 million in such scams.
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