Trustees to disclose client sector data
Trustees will be obliged to provide publicly available reports on their clients' activities once reforms are initiated, according to Clynton Hardy, chair of the Trustee Corporations Association (TCA).
Thursday, October 18th 2007, 5:22AM
by David Chaplin
"... and that data will be either published or discoverable," Hardy said. "While individual client information will be confidential the sector data will evidence the trustee in action."
He said trustees would also have to be registered with their activities coming under the supervision of the Securities Commission.
The role of trustees has come under increased scrutiny in recent months following the failure of several finance companies with the government fast-tracking regulations to bolster disclosure in the sector.
The latest regulations increase the power of trustees to demand more information from their clients.
"We welcome this strengthening of the trustee proposition and note that the changes that have been and will be introduced bear a significant similarity to the guidelines that this association published early in 2006," Hardy said.
"It is very pleasing to see that best practice is now standard practice."
Lianne Dalziel, Commerce Minister, also endorsed the role of trustees at a TCA function in Wellington last week.
Dalziel said while the recent turmoil in the finance company sector has "certainly concentrated attention" on trustees, proposals to enhance their powers were first made two years ago.
"Unfortunately when these matters shift from the specialist hands of the business page journalists to the headliners much can be lost in translation," she said.
Despite the criticism trustees faced, particularly after the collapse of Bridgecorp, Dalziel said the model remained the best way to supervise the sector.
"However, the proximity of trustees to the market and the knowledge and expertise that have been developed over the years confirms that they are best-positioned to provide that frontline role," she said.
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