Printed from: http://www.seccom.govt.nz/publications/soi/2007-2010/06.shtml?print=true on Wed 25 November 2009

Statement of Intent 2007-2010

Statement of Forecast Service Performance

Performance standards and measures for the outputs of the Commission

OUTPUT 1

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

Activities

Take enforcement action in the following areas:

Primary market -

offer documents, illegal offers, contributory mortgages.

Secondary market -

insider trading, market manipulation, secondary market disclosures (substantial security holder disclosure, continuous disclosure, disclosure of trading by directors and officers),

Intermediaries -

futures 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 measures Enforcement	Performance standards
Performance measures Enforcement	2007/2008 Forecast	2006/07 Estimate
Quantity
Complete the enforcement actions that meet the Commission’s case selection criteria, relating to the above matters.	5	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	Not measured
Quality
Our enforcement actions achieve the desired regulatory result.	80%	Not measured
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.	On average, within 24 months of commencement of investigation	No cases taken
Complete other enforcement actions.	On average, within 6 months of action commencing
Cost
Expenditure allocated to enforcement	4%	2%

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 measures Monitoring and market oversight	Performance standards
Performance measures Monitoring and market oversight	2007/2008 Forecast	2006/2007 Estimate
Quantity
Complete monitoring and market oversight matters relating to matters listed above.	155	200
Complete NZX oversight review.	1 time in the year	1
Complete financial reporting surveillance programme.	2 cycles in the year	2
Advise the Minister on proposed changes to Conduct Rules of the NZX.	2 times in the year	3
Consider and comment on continuous disclosure applications under the MOU with the NZX.	6	12
MMO resources are applied in accordance with established targets subject to variances under the Commission’s case selection and public interest criteria	Full compliance	Not measured
Quality
There is no successful judicial review of the Commission’s decisions or actions.	100%	Not measured
Percentage of cases where compliance breaches or poor standards of conduct in the markets are identified and the desired regulatory result is achieved	90%	Not measured
Timeliness
Complete monitoring and market oversight matters.	On average within 3 months	On average within 3 months
Complete NZX oversight review.	Within 6 months	Within 6 months
Complete financial reporting surveillance programme.	On average within 9 months of commencing each cycle	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.	100%	100%
Cost
Expenditure allocated to monitoring and market oversight	41%	40%

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 measures Law and practice reform	Performance standards
Performance measures Law and practice reform	2007/2008 Forecast	2006/2007 Estimate
Quantity
Make recommendations for securities law reform and improved market practice in accordance with obligations under the Securities Act 1978 and other relevant legislation.	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 its experience gained in the course of its enforcement work	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 its experience gained in the course of its enforcement work
Review exposure drafts of financial reporting and auditing standards, and Financial Reporting Act.	Review as required	Review as required
Participate on projects and reviews with the Ministry of Economic Development, other government departments and interested parties.	Participation as required	Participation as required
Quality
The recommendations for securities law reform and improved market practice in accordance with obligations under the Securities Act 1978 and other relevant legislation, and the quality of advice and assistance on MED reform programmes satisfy MED.	MED is satisfied with the quality of advice and assistance given	The Commission will base its work on thorough and accurate research into, and analysis of, the existing law and practice
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%	6%

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 measures Exemptions and authorisations	Performance standards
Performance measures Exemptions and authorisations	2007/2008 Forecast	2006/2007 Estimate
Quantity
Consider all applications for exemptions and authorisations of market participants.	All applications	75 15
Review existing exemption notices and authorisations.	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	8%	9%

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 FSAP recommendations.
Respond to overseas enquiries about New Zealand's regulatory regime.
Participate in the international standard setting process by completing comparative surveys on securities law and regulation.
Fulfill the obligations under the IOSCO MMoU and bilateral MOUs.
Contribute towards trans-Tasman initiatives.

Performance measures International recognition	Performance standards
Performance measures International recognition	2007/2008 Forecast	2006/2007 Estimate
Quantity
Take part in the work of IOSCO’s Executive Committee, Asia Pacific Regional Committee and the Implementation of Objectives and Principles of Securities Regulation Committee	100% of relevant meetings	Participated as required
Make presentations at IOSCO meetings which promote New Zealand’s markets and regulatory environment	60% of meetings attended	Not measured
Meet with ASIC	Twice per year	Not measured
Meet with overseas regulators and institutional investors.	As required	As required
Contribute towards trans-Tasman initiatives.	As required	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.	Presentations include information about NZ’s regulatory environment	The Commission based its presentations on sound research, consultation and analysis
Cooperative work with ASIC is completed to agreed standards and time frames	100%
Timeliness
Presentations at meetings and responses to committees provided within agreed timeframes.	100%	100%
Contribute towards trans-Tasman initiatives within agreed time.	100%	100%
Obligations under MOUs with overseas regulators are fulfilled within mutually agreed times.	100%	Not measured
Cost
Expenditure allocated to international liaison	14%	16%

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 measures Public understanding	Performance standards
Performance measures Public understanding	2007/2008 Forecast	2006/2007 Estimate
Quantity
Publish The Bulletin.	4 times a year	4 times a year
Deal with inquiries from the public.	All inquiries	1,400 a year
Manage the Commission’s website.	Website is available 95% of the time	Website is available
Develop and implement public education projects	3 sub-projects are implemented per year	Develop and implement approved sub-projects
Quality
Readers respond that The Bulletin is interesting and relevant.	80% of reader response to survey.	80% of reader response to survey.
Education projects meet their set measures of success.	90% of measures of success for each sub-project are met	Objectives for each sub-project are met
Inquiries are dealt with effectively.	Absence of material number of complaints	Absence of material number of complaints
Market tests indicate the Guide to the New Law is useful and relevant	Market test reports indicate guide is useful & relevant	New measure in 2007
Timeliness
The Bulletin is produced on time.	July/October/January/ April	July/October/January/ April
Education projects are carried out to agreed timetables.	Sub-projects milestones are achieved	Achieve sub-projects milestones
Public inquiries are handled within 5 working days of receipt.	95%	95%
New information is published on the website without delay.	New information is available on the website within 3 days of receipt	Not measured
Meetings with, and responses to, news media meet agreed timetables.	At all times	At all times
Cost
Expenditure allocated to public understanding	11%	12%

Performance measures	Performance standards
Performance measures	2007/2008 Forecast	2006/2007 Estimate
Takeovers Panel
Quality, Quantity 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 public understanding	15%	15%

Expected revenue and proposed expenses (for class of output)

Class of output - Performance of Securities Market Functions (Vote Commerce)

	2007/08 Forecast $000	2006/07 Estimate $000

Expected revenue	8,208	8,057

Proposed expenses	8,202	7,657

Operating surplus	6	400

Litigation fund

	2007/08 Vote Commerce $000	2006/07 Estimate $000

Expected revenue	2,400	272

Proposed expenses	487	272

Litigation surplus	1,913

This information is provided pursuant to section 142(2)(b), Crown Entities Act 2004.

Glossary

Functions

For the purposes of this SOI functions are the areas of work for which the Commission is funded from the Vote Commerce. [The Commission's statutory functions are set out in the Securities Act 1978.]

Outcomes

The six specific outcomes for the New Zealand securities markets that the Commission contributes to by delivering the outputs for which it is funded and achieving its objectives.

Outputs

The six areas of work undertaken by the Commission which are funded from the Vote Commerce.

Objectives

Objectives set by the Commission which it intends to achieve within specified periods in the term of this SOI, and which also contribute to the outcomes.

Primary markets

Offers of new securities made to the public.

Secondary markets

Trading of securities.

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