Implementation of Act an important step in restoring investor confidence

The Trustee Corporations Association today welcomed the new Securities Trustees and Statutory Supervisors Act which comes into force tomorrow.

"This is an important step in the investor confidence value chain," TCA Chairman, Clynton Hardy said.

"We approached the Government in early 2009 and volunteered to relinquish the then statutory right held by our members in favour of a new robust licensing regime, under the control of the regulator. The offer was accepted, and this new Act is the result."

"The new licences will be tougher to get and tougher to retain, and that's as it should be, he said."

"Investors and regulators must have confidence that the highest levels of professional supervision are in place."

"Another important feature of the change is that for the first time there is legislative provision for supervisors to report comprehensively to the regulator."

"This is not only a major step toward improving investor confidence, but will mean that whole-of-industry statistics are publicly available for the first time."

Mr Hardy said that the TCA was hoping to sign a Memorandum of Understanding with the Financial Markets Authority in the new year. This was expected to cover the FMA's expectations of supervisors and communication, including market surveillance and early warnings.

"The TCA has a similar MOU with the Reserve Bank, signed in March 2010.

"We are expecting an open, professional relationship, though some distance, just as supervisors need distance from those under supervision," he said.