The Securities Commission admits it is falling short in its enforcement role, including its prompt investigation of insider trading.
"Our ability to get enforcement work done promptly and efficiently is not as good as it should be," chief executive John Farrell says.
He says the commission is spending less of its resources on enforcement and more dealing with an increased demand for exemptions from securities regulations.
In the past six years funding remained stable, but the proportion spent on enforcement fell fro 45 per cent to 30 per cent.
Government funding to the commission had been reduced by $244,000 this year and it was looking at supplementing its income through fees or levies on market participants.
Chairman Euan Abernethy said demand for the commission's services was increasing, due to a growing number of savings and investment products, complexity and the speed of change in the market, and increased globalisation.
New advertising code The Advertising Standards Authority has adopted a new code for financial advertising.
The new code has three very simple basic principles and replaces a long six page and rather complex code of a prescriptive nature.
Authority chairman Phil O'Reilly says the authority is moving towards a "principle" approach to advertising regulation as it allows the Advertising Standards Complaints Board to adjudicate on complaints in a commonsense way based on commonsense principles.
The former financial code was so complex it was extremely difficult to understand.
"Interpretation of the rules became literal and legalistic instead of commonsense," he says. "This was no way to regulate advertising."
"Now advertisements are expected to comply with the spirit an intention of the code which is not only more sensible, but easier to enforce," he says.
A full copy of the new code will soon be available on Good Returns' features page.
A full bottle The Villa Maria backed vineyard offering Terra Vitae has closed fully subscribed one month ahead of schedule.
The offer raised $9.5 million and the proceeds will be used to buy three vineyards.
New fixed interest trust
New Zealand investors will be able to invest in local authority debt through a bond trust being set up by Credit Suisse First Boston (CSFB).
The trust will buy debt securities issued by local government entities and in turn will issue its own securities with matching terms and coupons to retail investors.
The catalyst for the trust is changes taking place to the way local government raises finance. They are no longer exempt from the Securities Act and must now publish a prospectus and an investment statement to sell their securities to the retail market.
CSFB expects the local authority bond trust to grow by between $100 million and $200 million a year.
One of the advantages of the trust was that the creditworthiness of an individual local authority issuer was enhanced by being backed by the credit of the entire pool of local authority securities in the trust.
CSFB will manage the trust including asset acquisition.
The Securities Commission admits it is falling short in its enforcement role, including its prompt investigation of insider trading. 