Reform of financial markets laws
The Financial Markets Conduct Bill has been tabled in the House. The Bill was borne out of the securities law reform process which has been underway for some time now, and sets out the framework for the future regulation of our financial markets (much of the detail of the new regime will be set out in regulations which are yet to be developed).
The Bill rewrites and consolidates a number of pieces of legislation including the Securities Act, Securities Markets Act, Unit Trusts Act, Superannuation Schemes Act, Securities Transfer Act and parts of the KiwiSaver Act.
Key aspects of the Bill include changes to the offers of securities that are exempted from compliance with the disclosure requirements of our securities laws, a product disclosure statement and securities register to replace the prospectus and investment statement, a regime for the regulation of collective investment schemes, a licensing framework for certain financial market participants and a modified liability regime.
The Bill is of particular relevance to those who have raised or are looking to raise funds – whether from public or private sources, those who have authority to manage others’ investments, those involved in the operation of collective investment schemes and derivatives dealers. It is expected that the Bill will go through the Select Committee process through the first part of 2012, with the regulations being developed though the year and the legislation enacted in late 2012.
Copyright law: an update on s92A
After a false start with the infamous s92A, the regime to discourage copyright infringement over peer-to-peer networks has finally been implemented in the Copyright (Infringing File Sharing) Amendment Act 2011 and associated regulations.
The jury is out as to how effective the law will be; we have, however, already found that it is prompting useful discussions within client businesses about how staff and contractors use the business internet connection (since the business is typically liable for whatever they do with it). Combine this with the explosive growth in the use of smartphones in the workplace and we are finding many businesses using the s92A situation as an opportunity to discuss just what the parameters are.
»» Can I use Facebook or Twitter at work? If so, what can I share with others?
»»What if I comment unfavourably on the service provided by someone who happens to be a major customer of the business I work for?
We’ll keep you informed on discussion around copyright infringement issues.
The IRD’s powers to search premises
A recent High Court decision1 confirms the wide reach of the IRD’s powers to search premises and seize documents, including searches of private dwellings.
The case involved search warrants executed on three private homes (and other premises) in an investigation concerning possible tax avoidance and/or evasion. The background, including a history of non-compliance with document production notices issued by the IRD and a series of ‘black letter law’ arguments raised by the taxpayers may have informed the courts’ reluctance to interfere.
Justice Venning held that it was for the court to monitor the manner in which the Commissioner exercised his powers, not the decision to exercise such powers (our italics). The case demonstrates that the courts will not lightly interfere with the IRD’s search powers (which are arguably wider than most government entities), unless those powers were exercised in breach of the Bill of Rights Act 1990.
1 Tauber v Commissioner of Inland Revenue (2011) 25 NZTC 20-071 (HC)
