Printed from: http://www.seccom.govt.nz/publications/annrep-08/17.shtml?print=true on Wed 25 November 2009
...PREV | CONTENTS | NEXT...

2008 Annual Report

STATEMENT OF OBJECTIVES
for the year ended 30 June 2008

Funds are to be appropriated by Parliament for the year to 30 June 2008 for the stated purpose of:

(The Estimates of Appropriations for the Government of New Zealand for the year ending 30 June 2008, Volume 1: 149-150).

STATEMENT OF SERVICE PERFORMANCE
Performance standards and measures for the outputs of the Commission
for the year ended 30 June 2008

OUTPUT 1 Enforcement - inquiring into suspected breaches of securities law and intervening in the interests of investors in accordance with statutory powers.

 
Activities
Primary market offer documents, illegal offers, contributory mortgages.
Secondary marketinsider trading, market manipulation, secondary market disclosures (substantial security holder disclosure, continuous disclosure, disclosure of trading by directors and officers).
Intermediariesfutures dealers, investment advisers.

This is done by:

  • prohibiting advertising,
  • removing offer documents from the market,
  • taking civil enforcement action in the Courts,
  • referring for prosecution,
  • acting on behalf of overseas commissions,
  • making other compulsory orders.
 
Performance standards
Performance measures
Enforcement
Actual
2008
Budget
2008
Quantity
Complete the enforcement actions that meet the Commission’s case selection criteria, relating to the above matters. 6 5
Enforcement resources are applied in accordance with established targets subject to variances under the Commission’s case selection and public interest criteria. Full compliance Full compliance
Quantity
Enforcement actions achieve the desired regulatory result. 100% 80%
There is no successful judicial review of the Commission’s decisions or actions. 100% 100%
Timeliness
Progress civil enforcement actions from investigation to the filing of proceedings. There were no civil enforcement actions to progress On average, within 24 months of commencement of investigation
Complete other enforcement actions. 2.0 months On average, within 6 months of action commencing
Cost
Expenditure allocated to enforcement work. 2% 4%

 

OUTPUT 2 Monitoring and market oversight – maintaining oversight of securities market activity and taking actions in accordance with its statutory powers.

 
Activities

Maintain oversight of securities markets and take appropriate action in the following areas:

Market oversight NZX oversight, corporate governance, financial reporting.
Primary market offer documents, illegal offers, contributory mortgages.
Secondary market insider trading, market manipulation, secondary market disclosures (substantial security holder disclosure, continuous disclosure and disclosure of trading by directors and officers).
Intermediaries futures dealers, investment advisers.

This is done by:

  • overseeing the operation of NZX,
  • reviewing practices of market participants and issuers,
  • assessing referrals from NZX,
  • monitoring market disclosures,
  • reviewing offer documents and advertisements for securities,
  • responding to public complaints,
  • using compulsory information-gathering powers (inspections, summons),
  • commenting publicly on market practice,
  • accepting enforceable undertakings,
  • reviewing financial reporting by issuers,
  • reviewing corporate governance reporting,
  • acting on behalf of overseas commissions.
 
Performance standards
Performance measures
Monitoring and market oversight
Actual
2008
Budget
2008
Quantity
Complete the monitoring and market oversight matters relating to matters listed above. 77 155
Complete NZX oversight review. 1 1 time in the year
Complete financial reporting surveillance programme. 2 cycles completed 2 cycles in the year
Advise the Minister on proposed changes to Conduct Rules of the NZX. NZX had no proposed changes 2 times in the year
Consider and comment on continuous disclosure applications under the MOU with the NZX. 8 times 6
MMO resources are applied in accordance with established targets subject to variances under the Commission’s case selection and public interest criteria Full compliance Full compliance
Quality
There is no successful judicial review of the Commission’s decisions or actions. 100% 100%
Percentage of cases where compliance breaches or poor standards of conduct in the markets are identified and the desired regulatory result is achieved. 100% 90%
Timeliness
Complete monitoring and market oversight matters. 2.91 months On average within 3 months
Complete NZX oversight review. 5.1 months Within 6 months
Complete financial reporting surveillance programme. 8.5 months On average, within 9 months of commencing
each cycle
Advice is provided to the Minister on approvals of, or proposed changes to, the NZX Conduct Rules within timeframes agreed with the NZX and allowing the Minister to exercise powers within the timeframes specified in the Securities Markets Act 1988. NZX had no approvals or proposed changes 100%
Cost
Expenditure allocated to monitoring and market oversight work. 37% 41%

 

OUTPUT 3 Law and practice reform – reviewing securities law and practice and making recommendations for reform.
 
Activities
  • Contribute to Government law reform programmes
  • Recommend changes to corporate and securities law
  • Comment on accounting and other industry standards and codes
 
Performance standards
Performance measures
Law and practice reform
Actual
2008
Budget
2008
Quantity
Make recommendations for securities law reform and improved market practice in accordance with obligations under the Securities Act 1978 and other relevant legislation. In September the Commission made a recommendation for urgent changes to the Securities Regulations 1983 to strengthen the power of trustees of finance companies. This was accepted and amendments came into force on 21 September 2007

The Commission will make recommendations to comply with its obligations under the Securities Act 1978 and with other relevant legislation.

The Commission’s contributions to law reform will arise in particular from the experience gained in the course of its enforcement work
Review exposure drafts of financial reporting and auditing standards, and Financial Reporting Act. Reviewed 3 exposure drafts.
In August the Commission made a recommendation to the Ministry of Economic Development to consider a review of independent auditor oversight in NZ so it may be brought into line with international best practice		 Review as required
Participate in projects and reviews with the Ministry of Economic Development, other government departments and interested parties.

Participated in MED projects and reviews being:

  1. Securities Legislation Bill Regulations
  2. Review of Financial Products and Providers
  3. Review of Financial Intermediaries
  4. Non-bank deposit takers and Ministry of Justice’s Anti-Money Laundering proposals
 Participation as required
Quality    
Make recommendations for securities law reform and improved market practice in accordance with obligations under the Securities Act 1978 and other relevant legislation; quality of advice and assistance on MED reform programmes satisfies MED. MED has advised it is satisfied with the quality of advice and assistance given. Recommendations to strengthen the powers of trustees of finance companies were accepted by Cabinet MED is satisfied with the quality of advice and assistance given
Timeliness    
Provide information and responses to the Ministry of Economic Development and others within agreed timeframes. 100% 100%
Cost    
Expenditure allocated to law and practice reform. 7% 7%

 

OUTPUT 4 Exemptions and authorisations – considering and deciding on applications for exemptions from the provisions of the Securities Act 1978, Securities Markets Act 1988 and the Securities Regulations 1983; considering and deciding on applications for authorisation of market participants, including futures exchanges and dealers, trustees and statutory supervisors; reviewing existing authorisations.
 
Activities
  • Receive and consider applications for exemption from securities law.
  • Review existing exemptions.
  • Undertake special review projects relating to policy on exemptions.
  • Authorise futures dealers and exchanges.
  • Consider amendments to futures exchange rules.
  • Approve NZFOX participant rules.
  • Approve trustees and statutory supervisors.
  • Review existing authorisations.
 
Performance standards
Performance measures
Exemptions and authorisations
Actual
2008
Budget
2008
Quantity
Consider all applications for exemptions and authorisations of market participants. Considered all applications

The Commission completed its 5-yearly review of class exemptions		 All applications
Review existing exemption notices and authorisations. Reviewed as required As required
Quality    
The Regulations Review Committee does not recommend disallowance of notices, and notices are not successfully judicially reviewed. 100% 100%
Proportion of notices issued which comply with the Commission’s internal processes.
 100% 100%
Timeliness    
Percentage of exemption applications and authorisations completed within 6 weeks of receiving all necessary information or within other period agreed with applicant. 100% 100%
Cost    
Expenditure allocated to exemptions and authorisations. 7% 8%

 

OUTPUT 5 International liaison – promoting New Zealand as a well-regulated country; keeping abreast of developments in global standard setting and contributing the Commission’s views to this process.
Activities

  • Promote New Zealand's markets and regulatory environment.
  • Take part in the work of IOSCO's:
    • - Executive Committee (Jane Diplock is Chairman of this committee),
    • - Asia Pacific Regional Committee (Jane Diplock is Deputy Chairman),
    • - Committee on the Implementation of Objectives and Principles of Securities Regulation,
    • - Communications Group.
  • Meet and confer with overseas regulators and institutional investors.
  • Contribute to implementation of the FSAP recommendations.
  • Respond to enquiries from overseas about New Zealand's regulatory regime.
  • Participate in the international standard setting process by completing comparative surveys on securities law and regulation.
  • Fulfil the obligations under the IOSCO MMOU and bilateral MOUs.
  • Contribute towards trans-Tasman initiatives.
 
Performance standards
Performance measures
International recognition
Actual
2008
Budget
2008
Quantity
Take part in the work of IOSCO’s Executive Committee, Asia Pacific Regional Committee and Implementation of Objectives and Principles of Securities Regulation Committee.

The Chairman was re-elected chair of IOSCO’s Executive Committee for a third 2 year term. The Commission was also reelected Vice-chair of the Asia-Pacific Regional Committee

Attended a series of IOSCO meetings in Dubai, Tokyo, South Korea, Amsterdam and Paris

The regulator’s perspective was presented at the IASC Foundation’s conference on IFRS in Singapore

Contributed to the IOSCO IFRS Database as Moderator and recorded a decision in the Database

Completed the recruitment process of the next Secretary General of IOSCO and met with the new Secretary General and his team

The Commission also took part in the work of the IOSCO MMOU Screening Group

The Commission’s proposal for NZAID funding to assist the securities regulator of Papua New Guinea to apply to the IOSCO MMOU was approved

 100% of relevant meetings
Make presentations at IOSCO meetings which promote New Zealand’s markets and regulatory environment.

A heavy schedule of speaking and meeting commitments with both IOSCO related and wider business audiences was completed, and opportunities taken to promote New Zealand’s markets and regulatory environment in over 70% of cases

Bilateral MOUs were signed with the Emirates Securities and Commodities Authority (ESCA), and the Securities Commission of Jordan

 60% of meetings attended
Meet with ASIC. Meetings were held with ASIC in October and March Twice per year
Meet with overseas regulators and institutional investors. The Commission hosted delegations of regulators and government officials from Vietnam and the Trade Minister of the UAE (former Minister for the Economy and Chairman of ESCA) Met with several regulators during IOSCO meetings and bilateral country visits As required
Contribute towards trans-Tasman initiatives.

The Commission presented a New Zealand regulatory perspective on CER at ASIC’s Summer School.

The Commission and ASIC developed and published a joint protocol and a joint guide to facilitate the implementation of the Mutual Recognition of Securities Offerings that came into force on 13 June 2008

The Chairman took part in the Australia New Zealand Leadership Forum.

 As required
Quality    
The Commission will present itself as a constructive and cooperative member of the international community of regulators. Views expressed to IOSCO will take into account the relevant New Zealand values and principles. The Commission presented itself constructively and cooperatively at the international level. Views expressed to IOSCO were congruent with New Zealand’s values and principles Presentations include information about NZ’s regulatory environment
Cooperative work with ASIC is completed to agreed standards and timeframes 100% 100%
Timeliness    
Presentations at meetings and responses to committees provided within agreed timeframes. 100% 100%
Contribute towards trans-Tasman initiatives, within agreed timeframes. 100% 100%
Obligations under MOUs with overseas regulators are fulfilled within mutually agreed timeframes. 100% 100%
Cost    
Expenditure allocated to international liaison work. 19% 14%

 

OUTPUT 6 Public understanding - promoting public understanding of the law and practice of securities.

 
Activities
  • Publish The Bulletin, annual report and other documents.
  • Respond to public inquiries.
  • Manage the website.
  • Maintain relationships with the news media.
  • Develop and implement a public education programme.
 
Performance standards
Performance measures
Public understanding and market presence
Actual
2008
Budget
2008
Quantity
Publish The Bulletin. July / October / January / April 4 times a year
Deal with inquiries from the public. 1,572 inquiries All inquiries
Manage the Commission's website. Website was available 99.52% of the time Website is available 95% of the time
Develop and implement public education projects. Implemented sub-projects Risk and Return, New Law Investment Advisers, New Law Investors, and Youth 3 sub-projects are implemented per year
Quality    

Readers respond that The Bulletin is interesting and relevant.

 100% of reader responses found it very useful or useful 80% of reader response to survey
Education projects meet their set measures of success. Objectives for above subprojects met 90% of measures of success for each sub-project are met
Inquiries are dealt with effectively. No complaints received Absence of material number of complaints
Market tests indicate the Guide to the New Law is useful and relevant. Testing with investment advisers and directors indicated the guide is useful and relevant Market test reports indicate guide is useful and relevant
Timeliness    
The Bulletin is produced on time. July / October / January / April July / October / January / April
Education projects are carried out to agreed timetables. Sub-project milestones achieved except for:
New Law – reactivated after Regulations approved December 07, and Youth student study guides deferred awaiting NZQA decisions		 Sub-project milestones are achieved
Public inquiries are handled within 5 working days of receipt. 100% 95%
New information is published on the website without delay New information was available on the website within 3 days of receipt New information is available on the website within 3 days of receipt
Meetings with, and responses to, news media meet agreed timetables. At all times At all times
Cost    
Expenditure allocated to public understanding. 13% 11%

 

OUTPUT 7 Takeovers Panel – providing administrative and support services by agreement.

 
Activities

Provide services related to the Panel’s outputs including:

  • review of Takeovers Code,
  • approvals,
  • exemptions,
  • enforcement,
  • market practice,
  • public understanding,
  • international liaison,
  • administration.
 
Performance standards
Performance measures
Takeovers Panel
Actual
2008
Budget
2008
Quantity, Quality and Timeliness    
Services are provided as per the MOU between the Panel and the Commission. In accordance with the MOU In accordance with the MOU
Cost    
Expenditure allocated to providing administrative services to Takeovers Panel. 15% 15%
...PREV | CONTENTS | NEXT...

 

About | Publications | Notices | What's new? | International | Speeches | Site map
Search | Information for investors | Contact us | Accessibility Disclaimer
Copyright | Privacy | newzealand.govt.nz | Home
© Copyright New Zealand Securities Commission