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02 November 2007
News release
Hon Lianne Dalziel, Minister of Commerce
To the Editor
I'd like to correct a statement in your item Firm gives Bridgecorp investors lifeline (Oct 31). Industry lobbying has not halted proposals by the Securities Commission that investment advice may not be given until disclosure is made. The Labour-led government has already amended the Securities Markets Act to improve investment adviser and broker disclosure law by requiring all information to be disclosed to clients before giving advice, ending the two tier disclosure regime referred to in the article.
The disclosure must cover the adviser's experience, qualifications and professional standing, certain criminal convictions, the adviser's interest or any relationship that will influence the adviser in giving the investment advice, and the nature and level of fees the adviser will charge the investor including, most importantly, any commissions they are receiving. Also, the Securities Commission is given a public enforcement role. It will have the power to make prohibition and corrective orders against advisers and brokers, including disclosure and temporary banning orders. Members of the public will have the right to complain to the Commission about advisers and brokers who they believe are not complying with the legislation, and the Commission will be able to act immediately.
Regulations are needed before the changes can come into effect. The substance behind the regulations was developed with the assistance of stakeholder consultation and comment through a discussion document released earlier this year. The regulations are in the final stages of drafting and will be in place before the end of the year.
Lianne Dalziel, MP
Minister of Commerce