The New Zealand Shareholders Association has appeared before Parliament's Commerce Select Committee, encouraging it to allow the new Financial Markets Authority to take civil action against a financial markets participant on behalf of investors and/or shareholders.
The NZSA said it was essential to instill confidence in the retail or 'small' investor that they were adequately protected by the new 'super regulator', which will consolidate regulatory functions of the Securities Commission, the Government Actuary , the Companies Office, and some from sharemarket operator NZX.
See more in Gareth Vaughn's October 27 story here.
The FMA should be empowered, with funds, to begin proceedings in an efficient and timely manner under, new NZSA chairman John Hawkins told the Select Committee, supporting clause 34 of the Bill. Any 'profits' made from civil actions would be put back into a fund for the FMA to undertake future actions in other cases.
1 Comments
Well the would wouldn't they... after all their Jesus (Bruce Sheppard) is on the FMA Establishment Board and it is these guys that have driven this into the FMA Bill...
However, while I don't have a problem with the principal of the FMA taking over actions I do have problems with the way this has been drafted into the Bill. Like a number of the legal submitters I worry that there is the strong possibility for unintended consequences coming out of this aspect of securities law needs to be more carefully considered.
As just one example, the FMA can take over a private action, but the private party still has to pay and if that party doesn't want the FMA to take the action over the party has to go to the High Court to get the FMA's action overturned.
How in God's name is that 'helping the small guys'??
THis is an example of the bad incentives that have crept into the drafting of this piece of the FMA bill because it has been rushed through and not properly considered.
I don't disagree with what they are trying to do here, but it is poorly drafted and may well lead to bad outcomes.
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