Submissions closed on Friday 1 March 2013 for the Ministry of Business, Innovation, and Employment's (MBIE) consultation on regulations under the Financial Markets Conduct Bill (FMC Regulations and FMC Bill).
The FMC Bill, which is expected to pass into law in the middle of this year and become operational in 2014, will overhaul New Zealand's capital markets legislation. It will replace the Securities Act, Securities Markets Act, and other pieces of legislation. Much of the detail to make the new regime work, however, will be found in the FMC Regulations. For example, the FMC Bill will replace the current registered prospectus and investment statement with a new offering document, the product disclosure statement (PDS) – but the FMC Regulations will set out what information issuers must include in the PDS. During 2012 market participants were able to see how the skeleton outline of the new regime will look, but in 2013 they are keen to see what meat will be put on the bones with the format of the FMC Regulations.
MBIE decided to adopt a two-stage process of public consultation. The first step was the publishing of the Discussion Paper in December 2012 seeking comments on the general "shape" of the FMC Regulations. This was a lengthy document, asking for feedback on over 300 questions. The second step will follow later this year, when MBIE publishes exposure drafts of the FMC Regulations for public comment. When this second stage is carried out, we will be able to see more fully how the new system will operate.
In the Discussion Paper MBIE sought input on a range of areas where regulations will need to be made, with the most substantial being disclosure (what information will need to be provided to prospective investors in the PDS and other sources), and licensing (what requirements should apply to the range of persons who will need to apply for licences from the Financial Markets Authority (FMA), for example funds managers).