News round-up

ASB relaunches school savings programme; NZ Funds sets record straight on fund; COF and EYF to be wound up; Tower retains right to sell policies to ANZ National customers; EUFA petitions for inquiry into industry; Plan for stricter global framework.

Monday, March 16th 2009, 5:15AM

ASB relaunches school savings programme
ASB has launched a revitalised school banking programme, 83 years on from the launch of its original one.

The move comes after the first ASB SmartSave Survey which showed that 75% of young school pupils surveyed either don’t have a bank account or rarely use one if they do.

The survey asked 450 eight to 12 year olds from 20 New Zealand schools about their understanding of saving money. Results showed 13% were unable to name one bank or financial institution, with over half only able to name just one.

Over half those surveyed thought their financial independence would come from “luck and a bit of planning”.

So far over 300 schools have already registered their interest in the revamped programme.

Tower retains right to sell policies to ANZ National clients
Tower has retained the right to sell insurance to customers of ANZ National Bank and ING (NZ) after the lender sought a court ruling to prevent policies being renewed while it lined up a rival underwriter, Vero Insurance. [Read On]

EUFA petitions for inquiry into industry
A petition has been presented to Parliament for a Royal Commission of Inquiry into the finance industry.

It will be supported by a further submission signed by investors expected to be gathered in the coming weeks.

“Now that the petition has been tabled in Parliament EUFA members will be seeking the support of the public to sign a supporting document to achieve a Royal Commission of Enquiry,” EUFA coordinator Suzanne Edmonds says.

The submission calls for an enquiry to investigate the finance companies’ crisis from May 2006 and determine “the accountability of the Securities Commission and other government agencies; the accountability of the directors, trustees, company management and associated parties of the collapsed/troubled finance companies, including financial advisers; what is necessary to provide relief and compensation for investors, and; the legal requirements/standards/obligations of directors, trustees and company management,” the submission says.

NZ Funds sets the record straight on fund
NZ Funds has written to clients telling them an article in the Sunday Star Times was neither accurate nor did it portray the experiences clients have had. The letter has also gone to the paper.

The SST article had one NZ Funds investor saying he had lost a large sum of money by investing in the Super Yield Fund. It also made some allegations about the relationship between an NZ Funds related company and Kensington Park.

NZ Funds has outlined in its letter how it dealt with the credit fund and also its relationship with some other companies.

Investors agree to wind-up COF and EYF
Investors have given ING a mandate to wind up the Credit Opportunities Fund (COF) and the Enhanced Yield Fund (EYF) over time. Investors voted overwhelmingly in favour of the extended wind-up proposal for each fund at meetings held on Thursday.

“I’m pleased that investors have voted to allow us to sell the assets over time, as market conditions improve,” ING New Zealand chief executive Helen Troup said.

The wind-up will start on April 1 and the aim is to complete it within three to five years. It is expected that as assets are realised, interim payments will be made to unitholders.

COF has 294 unitholders and $8 million in funds under management. EYF has 417 unitholders and $27 million under management.

Plan for stricter global framework
The Institute of Actuaries of Australia has announced a global risk management framework to improve governance and help prevent future financial crises.

The report calls for the introduction of counter cyclical regulatory arrangements that allow for changes in capital requirements when early warnings of bubbles emerge.

“Putting in place capital shock absorbers that build capital capacity in boom times would allow for the gradual and controlled deflation of bubbles with a reduced impact on systems and the economy,” chair of the International Actuarial Association’s Enterprise and Financial Risk Committee, Tony Coleman said.

The role of a Country Risk Supervisor is also being put forward as a way to better manage risks across geographic boundaries and industries through improved policy setting, risk monitoring and responsive decision making.

The third point to come from the report suggested the need to increase capital requirements where remuneration incentives are excessively short-term focused.

The report has been developed by the International Actuarial Association, a global body representing the actuarial profession world-wide.

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Sovereign takes regulation bull by the horns »

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