"Once-in-a- generation" financial markets legislation reform
08 Mar 2012
The Financial Markets Conduct Bill had its first reading in Parliament on 7 March 2012. The Bill has now been referred to the Commerce Select Committee, which has called for submissions. The closing date for submissions is 26 April 2012.
The Commerce Select Committee is required to report back to Parliament on the Bill by 7 September 2012. It has been reported that the Bill will receive its second reading by October 2012.
Once the Bill is in force, offers of financial products will be required to transition to the new regime within two years.
The Bill will have a major impact on how securities are offered publicly and privately, and on the governance requirements for managed investments such as unit trusts and superannuation schemes. Financial product markets and market-related services will also have new licensing requirements, with transitional arrangements for existing markets and licensed services.
Perhaps one of the most important changes brought by the Bill is to the liability regime. The Bill contains an escalating scale of liability, with an increased emphasis on civil liability that will be easier for investors to enforce against issuers and directors. The most serious offences will involve actual knowledge of wrongdoing, or recklessness, and could result in imprisonment.
Simpson Grierson made submissions on the Exposure Draft of the Bill released last year and will be making submissions on the Bill. We would be happy to discuss the potential impact of the Bill on your business and to assist in the preparation of specific submissions.