3 Dec 2010

Teeth needed by FMA - Shareholders Assn

7:07 am on 3 December 2010

The New Zealand Shareholders Association says the new Financial Markets Authority needs teeth to perform its duties, and concerns that its powers will reduce competition are nonsensical.

The Parliamentary Commerce Select Committee has been hearing submissions on the Financial Markets Bill which establishes the new super regulator.

The NZX and other parties have expressed concerns at the hearing that the bill is fundamentally flawed, and risks favouring international operators.

The Shareholders Association says views that the stock exchange will become uncompetitive are nonsense, as the Australian and London stock exchanges are subject to much more stringent regulation and compliance costs in both jurisdictions are much higher.

Chairman John Hawkins says clear, concise regulation with appropriate powers of investigation and sanction are an advantage to the NZX.

Given the same returns, he says sensible investors will always place their funds in a soundly regulated environment, instead of ones operated by cowboys and with weak enforcement.