Financial markets law reform – the shape of things to come

FMC Bill Shape of Things to come

Financial markets law reform – the shape of things to come

Introduction

In recent weeks the release of a number of Cabinet papers provides an insight into the likely shape of the next phase of the financial markets law reform process. Specifically, it is clear that the next phase in the process will be dominated by the final steps required to implement the Financial Markets Conduct Bill (“FMC Bill”) and the regulations that are required to make the FMC Bill “work”.

The Cabinet papers also help us to understand the Government’s proposals for the remaining key parts of the financial markets law reform process – dealing with such issues as disclosure obligations, exclusions/ safe harbours / carve-outs, governance issues and licensing matters.

An Overview of the decisions signaled in the Cabinet papers is contained in the attached pdf (follow the BLUE link above).

Timetable

The new regime under the FMC Bill regime is earmarked as coming into force in April 2014 – but will be subject to a transition period of 2 years. An exposure draft of the regulations is likely to be distribution for comment in October – and whilst there has been one round of consultation on the shape of the regulations – this is still quite a tight timetable for such a large body of new regulations.

Some other commentators have also noted that one of the key elements required to achieve the proposed timeline is building of the new (online) securities register platform. This online platform is seen by some as providing the functional core of the financial services law reform package. Once established, the platform will provide the primary source of data about an issuers and issues as well as access to the information lodged under the new periodic reporting obligations and the requirements for event-based disclosures. As a result, it appears to require functionality that is similar to the NZX reporting platform.