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Reviews Of Financial Market Architecture Continue

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Sept 24 NZPA - The financial markets meltdown, in which many investors lost money on investments they did not appreciate the risk of, has triggered a review or two.

Today a review of the effectiveness of the New Zealand Securities Commission by a French expert and former secretary of foreign affairs was released.

This review was recommended by a review carried out by KPMG and the Ministry of Economic Development last year.

Today's report concluded the Securities Commission discharged its responsibilities efficiently and to a high professional standard within the limits of its power and resources.

It makes suggestions about increased powers and resources, advocating a review of the commission's funding and staffing.

There are also recommendations on improving engagement with the media and public.

The review makes recommendations relating to a separate review of securities law, but sees the need for "alignment within the trans-Tasman relationship" in this area.

"There are too many agencies involved in the supervision of securities market conduct, including investigation and enforcement," the report said.

The same problems existed in the area of public education and financial literacy.

"Roles and responsibilities need to be consolidated and rationalised. Where this is not possible, boundaries should be clarified and co-ordination improved."

The Securities Commission was set up in 1978 to monitor compliance with securities legislation and comment on securities market practices.

Since then it has become a broader financial markets regulator.

Commission chairwoman Jane Diplock has been criticised for spending too much time at international conferences but has defended her performance in media interviews.

In 2003 an independent review of New Zealand securities regulation was carried out under International Organisation of Securities Commissions (IOSCO) standards as part of a broader review of the New Zealand financial system by the International Monetary Fund.

New Zealand was seen as badly out of step with international market regulators.

Today's report said Ms Diplock should be congratulated for a strong leadership role in IOSCO.

The commission monitors the sharemarket operator NZX and today's report said the relationship between the two in the past has not been particularly harmonious but is becoming more constructive.

Today's report is separate to a review of capital markets by the Capital Market Development Taskforce, an industry led group.

Separately the Business Roundtable this week praised the Government Statement on Regulation and accompanying cabinet paper released last month.

The paper submitted by Finance Minister Bill English and Regulatory Reform Minister Rodney Hide notes that re-regulation of the economy has been a major factor behind the slump in productivity growth.

It suggests a review of existing regulation to remove unnecessary regulation and stronger tests for new regulation.

NZPA WGT pjg nb

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