In brief: The PNG Government has announced it will introduce new legislation to repeal and replace the Securities Act 1997 and set up the Securities Commission as an independent government agency. Senior Associate Ryan Warokra reports.

BACKGROUND

On 3 June 2015, Prime Minister Peter O'Neil announced that the Government will soon introduce legislation aimed at reforming PNG's securities legislation. The legislation will set up the Securities Commission of Papua New Guinea as an independent government agency and introduce changes to the Port Moresby Stock Exchange, which the Government hopes will spur greater competition and capital market growth.

The new Bills to be presented to the Parliament are:

  • Securities Commission Bill;
  • Capital Market Bill; and
  • Central Depository Bill.

The Bills, however, are not yet publicly available.

Amendments to the Securities Act 1997

The Prime Minister indicates that there is a number of vagaries and ambiguities in the existing Securities Act 1997 that has undermined the ability of the Securities Commission of PNG to perform its regulatory functions.

While the Prime Minister did not elaborate on what those perceived gaps are, public consultations held by the Securities Commission of PNG in July 2014 suggest that the proposed changes may focus on licensing requirements for financial intermediaries and advisors, greater clarity around offers to the public, issue of a prospectus and disclosure obligations.

Securities Commission of Papua New Guinea

The Securities Commission is currently a division of the Investment Promotion Authority of Papua New Guinea and is chaired by the Registrar of Companies. The new reforms seek to give the Securities Commission an independent organisational and administrative structure, and to build capacity to enable it to better perform its regulatory functions.

Port Moresby Stock Exchange

The proposed reforms aim to improve competition and transparency by introducing changes to the ownership structure and board composition of the Port Moresby Stock Exchange, which the Government hopes will encourage more activity in PNG's capital market.

TIMING

The draft Bills could be introduced to the Parliament as early as August 2015, after which they will become publicly available. 
It is unclear whether implementation of the new legislation will occur soon after the Bills are passed or whether the Government plans to do this in phases.