News Round Up: April 11

Goldman aims to buy all its business Down Under; FMA go live date and new rules for trustees; Beware fish-hooks in new PIE rules.

Monday, April 11th 2011, 7:10AM

Goldman Sachs funds ratings unaffected by bid proposal
New-York investment bank Goldman Sachs says that it plans to acquire 100% of Goldman Sachs & Partners in Australia and New Zealand.

Goldman Sachs currently owns 45% of Goldman Sachs & Partners Australia, with the remaining 55% owned by current and former management and employee shareholders.

The investment will facilitate the full integration into Goldman Sachs of the Australian and New Zealand businesses which have operated as a joint venture with Australian broking firm J B Were since 2003.

"Australia and New Zealand represent an important part of our growth strategy," said Lloyd Blankfein, chairman and CEO of Goldman Sachs.

"This investment underscores our desire to continue to strengthen our Australasian client franchise."

The proposed acquisition is expected to close in the coming months.

FMA goes live on May 1
Commerce Minister Simon Power has announced the Financial Markets Authority (FMA) will be up and running on May 1, after the Bill to establish it was passed unanimously in Parliament last week.

"I'm confident it will have the tools it needs to help restore mum and dad investor confidence in our financial markets, after issues were raised following the global financial crisis, and the failure of a number of finance companies."

Parliament also unanimously approved The Securities Trustees and Statutory Supervisors Bill, which closes gaps that were exposed in the recent finance company collapses.

The Bill requires all corporate trustees, including those for non-restricted KiwiSaver schemes, to be licensed, along with certain statutory supervisors.

"This Bill will protect the interests of investors by requiring trustees and statutory supervisors to be competent, perform their functions effectively and be held accountable by the FMA if they fail to meet expected standards," Power said.

Look for fish-hooks in new PIE rules
PIE investment products will be available to foreign investors on a tax-effective basis which will help the development of New Zealand as a financial hub.

The changes are in a Supplementary Order Paper (SOP) introduced by the Government last week. The changes have been welcomed however Chapman Tripp urges industry players "to consider the SOP carefully as it may contain some fish-hooks."

"The legislation has been widely consulted on, and accordingly should be fit for purpose in most respects. However, it almost certainly contains difficulties which will only be discovered on close examination. It is therefore important that it be subjected to expert scrutiny to ensure that the legislation that is enacted will achieve its purpose."

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