The Financial Markets (Regulators and KiwiSaver) Bill makes changes to the functions, duties and powers of regulatory bodies with the aim of restoring investor confidence in the country's financial markets. It established the FMA by consolidating the functions fragmented across the Securities Commission, and parts of the Ministry of Economic Development.
The Bill addresses key recommendations from the Capital Market Taskforce, issues raised during the global financial crisis, the failure of a number of finance companies and concerns around KiwiSaver regulation.
"I'm committed to ensuring the FMA has the right tools to keep our capital markets working for mum and dad investors," Power said.
"The Bill gives the FMA the power to exercise investors’ rights of action in the public interest, but ensures individuals can opt out if they wish. It also allows regulations to be made to prevent products being structured to avoid being supervised by the FMA."
Power said he was pleased the Committee had retained key changes to the regulation of securities markets and that the FMA would have the ability to request rule changes and undertake real-time surveillance of market activity.
He also said the Committee recommended moves to target low-ball, unsolicited share offers.
"One change is an enhanced warning power for the FMA so those with a history of making these offers can be made to display a prominent warning to that effect when they send documents to investors."
Included in the Bill is regulation-making power to enable increased regulation of unsolicited offers, including minimum-offer, cooling-off periods and disclosure of market price.
The Financial Markets (Regulators and KiwiSaver) Bill was introduced to Parliament on September 14, and subject to the passage of the Bill the FMA will be established by May 2011.
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