Securities Commission of New Zealand
Encyclopedia
The Securities Commission was an independent Crown Entity of the government of New Zealand
and the main regulator of investments. It was replaced on the 1 May 2011 by the Financial Markets Authority (New Zealand)
.
It was responsible for enforcement, monitoring and market oversight of the securities markets, authorising participants and promoting public understanding of investments. This includes authorising the New Zealand Stock Exchange with which it runs a co-regulatory model.
On 27 April 2010 the New Zealand minister for commerce Simon Power
announced that Securities Commission would be replaced by a new integrated financial regulator the Financial Markets Authority.
The commissions role was modified and extended by a number of additional pieces of legislation. These include the Securities Markets Act 1988, the Investment Advisers (Disclosure) Act 1996, the Securities Regulations 1983, the Securities Act (Contributory Mortgage) Regulations 1988, and the Securities (Fees) Regulations 1998.
The Financial Advisers Act 2008 gave the Securities Commission new responsibilities to register and set minimum standards for financial advisers. There was some concern that the commission did not have the resources to effectively carry out its responsibilities and that this additional responsibility would make the situation worse.
The agency was chaired by Jane Diplock from 2001 until it was disbanded in 2011 and faced criticism for its handling of the collapse of a large number of finance companies. Jane Diplock was also the chairperson of the International Organization of Securities Commissions
(IOSCO) during her time as chairperson of the Securities Commission.
New Zealand
New Zealand is an island country in the south-western Pacific Ocean comprising two main landmasses and numerous smaller islands. The country is situated some east of Australia across the Tasman Sea, and roughly south of the Pacific island nations of New Caledonia, Fiji, and Tonga...
and the main regulator of investments. It was replaced on the 1 May 2011 by the Financial Markets Authority (New Zealand)
Financial Markets Authority (New Zealand)
The Financial Markets Authority is the New Zealand government agency responsible for financial regulation. It is responsible for consumer protection, regulating all financial market participants, exchanges and the setting and enforcing of regulations....
.
It was responsible for enforcement, monitoring and market oversight of the securities markets, authorising participants and promoting public understanding of investments. This includes authorising the New Zealand Stock Exchange with which it runs a co-regulatory model.
On 27 April 2010 the New Zealand minister for commerce Simon Power
Simon Power
Simon James Power is a New Zealand politician. He is a prominent member of the National Party and a cabinet minister. He currently holds the posts of Minister of Justice, Minister for State Owned Enterprises, Minister of Commerce, Minister Responsible for the Law Commission andAssociate Minister...
announced that Securities Commission would be replaced by a new integrated financial regulator the Financial Markets Authority.
History
The Commission was first established under the Securities Act 1978 which determines its powers and functions.The commissions role was modified and extended by a number of additional pieces of legislation. These include the Securities Markets Act 1988, the Investment Advisers (Disclosure) Act 1996, the Securities Regulations 1983, the Securities Act (Contributory Mortgage) Regulations 1988, and the Securities (Fees) Regulations 1998.
The Financial Advisers Act 2008 gave the Securities Commission new responsibilities to register and set minimum standards for financial advisers. There was some concern that the commission did not have the resources to effectively carry out its responsibilities and that this additional responsibility would make the situation worse.
The agency was chaired by Jane Diplock from 2001 until it was disbanded in 2011 and faced criticism for its handling of the collapse of a large number of finance companies. Jane Diplock was also the chairperson of the International Organization of Securities Commissions
International Organization of Securities Commissions
The International Organization of Securities Commissions is an association of organisations that regulate the world’s securities and futures markets....
(IOSCO) during her time as chairperson of the Securities Commission.
Responsibilities and functions
The Securities Commission undertook the following roles:- Enforcement, monitoring and market oversight
- Law reform
- Exemptions
- Authorisations
- International co-operation and
- Promoting public understanding
Notable cases
- In June 2007, Michael FayMichael FayMichael Fay may refer to:*J. Michael Fay , explorer and biologist*Sir Michael Fay , New Zealand merchant banker in the America Cup's Hall of Fame*Michael D. Fay, American Marine combat artist...
and David RichwhiteDavid RichwhiteDavid MacKellar Richwhite is a New Zealand investment banker and was a partner in Fay, Richwhite & Company with Sir Michael Fay.Educated at King's College, Auckland and the University of Otago, where he graduated with a Bachelor of Commerce degree, Richwhite's personal wealth was largely acquired...
through one of the companies that they co-owned, Midavia Rail Investments, paid $20 million to the commission to settle insider tradingInsider tradingInsider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
proceedings relating to Tranz RailTranz RailTranz Rail, formally Tranz Rail Holdings Ltd , was the main rail operator in New Zealand from 1991 until it was purchased by Toll Holdings in 2003.- Formation :...
. In October 2004 the commission accused Midavia of insider trading and Richwhite of tipping off Midavia to sell $63 million worth of shares whilst knowing Tranz Rail faced financial problems, then undisclosed to the public. The commission noted that the payments had been made "without any admission of liability".
- On 20 June 2010, the Securities Commission initiated the process that put the finance companyFinancial institutionIn financial economics, a financial institution is an institution that provides financial services for its clients or members. Probably the most important financial service provided by financial institutions is acting as financial intermediaries...
South Canterbury Finance which was run by Allan Hubbard into statutory management after complaints from a number of investors. This also triggered an investigation by the Serious Fraud Office (New Zealand).
- In late 2010, the Securities Commission successfully applied to the High CourtHigh Court of New ZealandThe High Court of New Zealand is a superior court of New Zealand. It was established in 1841 and known as the Supreme Court of New Zealand until 1980....
to have the assets of former director of finance companyFinancial institutionIn financial economics, a financial institution is an institution that provides financial services for its clients or members. Probably the most important financial service provided by financial institutions is acting as financial intermediaries...
Hanover Finance, Mark HotchinMark HotchinMark Stephen Hotchin is a New Zealand property developer and financier. He was a director of the Hanover Group which owned a number of finance companies including Hanover Finance, United Finance, Nationwide Finance and FAI Finance...
frozen.