25 Jul 2011

Improved protection mooted for finance investors

7:46 pm on 25 July 2011

The Government will introduce legislation next week to further improve protection for investors in finance companies.

The Non-Bank Deposit Takers Bill will give the Reserve Bank the power to remove directors and management of some financiers where they fail to meet suitability criteria.

The criteria include bankrupts, those with involvement with firms previously placed in receivership, liquidation, voluntary administration, and statuatory or judicial management.

The bank would also have the power to remove those who have previously been censored by regulators or market operators.

Finance Minister Bill English says the bill adds to steps already taken to improve investor confidence following the collapse of a large part of the finance company sector.

These include tougher rules for related-party lending, increased capital requirements, and credit ratings.