Advisory regulation paper close
A Cabinet paper on regulation of the advisory industry has been signed off by Commerce Minister Lianne Dalziel this week and is likely to be released in early July.
Thursday, June 22nd 2006, 7:22AM
She says the government supports the co-regulatory approach previously recommended by the Ministry of Economic Development.
She says the other piece of legislation relating to advisers, the Securities Legislation Bill, which is currently before Parliament has been delayed because several problems have been identified.
These include whether advisers should give full disclosure at the start of the investment process.
Dalziel says there is some overlap between the two pieces of work and the government wants to make sure it gets them right.
Meanwhile, the National Party is claiming that Labour is dragging the chain of the bill.
"In 2004, the Labour Government promised action after the International Monetary Fund scored New Zealand poorly with regard to the regulation of financial intermediaries," commerce spokesperson Pansy Wong says.
"A taskforce was set up, and last year it recommended that a separate body approve standards for individuals and businesses who provide financial services.
"However, Labour decided there was no need to rush this, and legislation isn't likely to be in place until 2008.
"In the meantime, the Securities Bill, which requires disclosure from financial advisers about their qualifications and experiences, and imposes bigger fines for breaches, was introduced in 2004 and reported back to the House in June last year, but has sat gathering dust on the order paper.
"National supports this bill because it will give better protection to investors, but nothing can happen till Labour back up their words and give it urgent attention. 20 June 2006 Labour drags chain on protecting investors The receivership of Provincial Finance has highlighted Labour's lack of action in the financial services sector, says National's Commerce spokeswoman, Pansy Wong. "The fact that $9.5 million of investors' funds were poured into Provincial Finance between the withdrawal of its prospectus on April 10 and its receivership on May 10 has put the competency of some financial advisers back into the spotlight. "Until they do, investors will be left with no protection."
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