2 Sep 2013

Investor confidence legislation approved

7:54 am on 2 September 2013

A bill designed to give the public more confidence to invest in the sharemarket passed through Parliament last week and will become law.

The Financial Markets Conduct Bill was an outcome of the Capital Markets Development Taskforce and is aimed at providing greater transparency in the markets.

The intention of the new law is to provide better information and protections for investors, and clearer rules for companies looking to raise capital.

The bill is being described as a 'once in a generation' rewrite of legislation.

A partner at law firm Chapman Tripp, Roger Wallis, says that's a fair description of the new law and improving investor confidence is only part of the changes. The other part of it is to try to encourage greater development of the New Zealand financial markets.

He says there is a balance between investor protection and a more proportionate response to enforcement if there is non-compliance.

Mr Wallis says more flexibility for those seeking to raise money from investors is also being introduced, as well as more innovative provision of financial services.

He says there will be greater recognition of smaller fundraising, as well as a more coherent way of making disclosure about financial information to investors.

Mr Wallis says it's intended to make greater use of electronic technology such as email and the internet and to provide simplified explanations about core information for investors.