General policy statement
This Bill is an omnibus Bill and 1 of a package of 3 omnibus Bills that contain amendments to legislation administered by the Ministry of Business, Innovation, and Employment (the Ministry). This Bill, the Regulatory Systems (Commercial Matters) Amendment Bill, makes amendments in the commerce, consumer affairs, communications, and energy and resources areas. The policy objective of each Bill is to maintain the effectiveness and efficiency of the regulatory systems established by the Acts amended by the Bills and so reduce the chance of regulatory failure. The amendments will achieve this objective by—
clarifying and updating statutory provisions in each Act amended to give effect to the purpose of that Act and its provisions; and
addressing regulatory duplication, gaps, errors, and inconsistencies within and between different pieces of legislation; and
keeping the regulatory system up to date and relevant; and
removing unnecessary compliance costs and costs of doing business.
The amendments were identified as part of the Ministry’s regulatory systems work programme, which arises from the chief executive’s responsibility to relevant Ministers, under section 32 of the State Sector Act 1988, for the stewardship of the legislation administered by the Ministry.
The Bills respond to the New Zealand Productivity Commission’s June 2014 report, Regulatory Institutions and Practices. The New Zealand Productivity Commission found that it can be difficult to find time on the Parliamentary calendar for “repairs and maintenance” of existing legislation. As a result, regulatory agencies often have to work with legislation that is out of date or not fit for purpose. This creates unnecessary costs for regulators and regulated parties and means that regimes may not keep up with public or political expectations.
This Bill, the Regulatory Systems (Commercial Matters) Amendment Bill, is a vehicle for these smaller regulatory fixes in the commerce, consumer affairs, communications, and energy and resources areas to be progressed in a timely and cost-effective fashion in order to deliver the flow-on benefits to business and the wider economy. It includes the following amendments:
Building Societies Act 1965 (see subpart 1 of Part 1)
The Building Societies Act 1965 changes will reduce compliance costs and bring the annual returns process for building societies into alignment with the Companies Act 1993.
Commerce Act 1986 (see subpart 2 of Part 1)
The Commerce Act 1986 amendments will improve legal clarity and certainty by clarifying provisions in relation to lay members of the High Court and expenses of the Commerce Commission incurred under multi-year appropriations.
Companies Act 1993 (see subpart 3 of Part 1)
The purpose of the Companies Act 1993 changes is to ensure that the requirements of that Act can be more efficiently and effectively achieved with minimum necessary compliance costs. The changes will remove unnecessary compliance costs in relation to—
the provision of information from directors:
the preparation of financial statements for companies that are subsidiaries of a body corporate that is required to prepare group financial statements:
notification requirements for listed companies.
The changes will increase the effective and efficient operation of the Act in relation to the—
registration and removal of overseas companies on the Companies Register:
maximum dollar employee priority payment for company liquidations:
application of netting agreements to trusts.
Construction Contracts Act 2002 (see Part 4)
This amendment provides that the new requirements that all retention money must be held on trust (which are due to come into force on 31 March 2017) will not apply to contracts entered into before that date.
Energy Efficiency and Conservation Act 2000 (see subpart 1 of Part 3)
The amendment to the Energy Efficiency and Conservation Act 2000 will improve the clarity and certainty of the operation of the Act in relation to certain information that can be incorporated by reference.
Fair Trading Act 1986 (see subpart 4 of Part 1)
The purpose of the Fair Trading Act 1986 amendments is to ensure consistency between regimes and provide clarity in the split of regulatory responsibilities between the Commerce Commission and the Financial Markets Authority (the FMA). The Bill aligns the definition of financial service with the definition in the Financial Markets Conduct Act 2013.
Financial Advisers Act 2008 (see subpart 5 of Part 1)
The purpose of the change to the Financial Advisers Act 2008 is to improve the operation of that Act by providing the FMA with an effective means of collecting fines.
Financial Markets Authority Act 2011 (see subpart 6 of Part 1)
The amendment to the Financial Markets Authority Act 2011 facilitates the FMA’s investigation and prosecution of contraventions by financial markets participants. The Bill adds the Secret Commissions Act 1910 to the list of financial markets legislation that the FMA is able to enforce.
Financial Markets Conduct Act 2013 (see subpart 7 of Part 1)
Minor changes to the Financial Markets Conduct Act 2013 are proposed. The changes have been identified during the implementation of that Act and will help ensure that the policy of the Act is efficiently and effectively achieved with minimum compliance costs. The Bill—
removes a minor inconsistency between the licensing test for applicants and the test for authorising a related body corporate:
empowers the FMA to make exemptions from subpart 8 of Part 8 of the Act, which contains prohibitions on indemnity and insurance that may not be appropriate in all circumstances:
allows financial statements for a registered scheme to be filed within 4 months of the scheme’s balance date (rather than the scheme manager’s balance date):
clarifies that standard indemnities do not prevent transfers of financial products continuing to be made without a signature from the transferee:
allows discretionary investment management service providers and prescribed intermediary service providers (crowd funding and peer-to-peer lending service providers) to continue providing services where defective disclosure has been made, subject to prescribed conditions:
shifts some matters currently dealt with in regulations to the Act and vice versa, clarifies the relationship between the Act and regulations, and adjusts some regulation-making powers to ensure that the policy intent can be achieved:
removes minor inconsistencies between some provisions and clarifies others.
Financial Service Providers (Registration and Dispute Resolution) Act 2008 (see subpart 8 of Part 1)
The change to the Financial Service Providers (Registration and Dispute Resolution) Act 2008 ensures the integrity of the register of financial service providers by ensuring that the Registrar of Financial Service Providers has the power to initiate deregistration of a financial service provider where the provider is not, but should be, a member of a dispute resolution scheme.
Friendly Societies and Credit Unions Act 1982 (see subpart 9 of Part 1)
The Friendly Societies and Credit Unions Act 1982 amendments are intended to improve the efficiency and effectiveness of that Act. The Bill promotes innovation, efficiency, and accountability and removes unnecessary operating and compliance costs by allowing friendly societies and credit unions to use electronic and postal voting for general and special resolutions.
Gas Act 1992 (see subpart 2 of Part 3)
The purpose of the amendments to the Gas Act 1992 is to provide certainty by addressing a regulatory error in relation to the definition of gas distributor. The Bill will give the Minister of Consumer Affairs responsibility for recommending exemptions under the Gas Act 1992 from the requirement to belong to the electricity and gas consumer complaint scheme, as the Minister responsible for the scheme under the Electricity Industry Act 2010.
Insolvency Act 2006 (see subpart 10 of Part 1)
The purpose of the Insolvency Act 2006 amendments is to ensure the requirements of that Act can be more efficiently achieved with minimum necessary compliance costs in relation to the functions of the Official Assignee.
New Zealand Superannuation and Retirement Income Act 2001 (see subpart 11 of Part 1)
The purpose of the amendment to the New Zealand Superannuation and Retirement Income Act 2001 is to ensure that the Act accurately reflects the work of the Retirement Commissioner in relation to work on financial capability and other functions as directed by the Minister of Commerce under the Crown Entities Act 2004.
Postal Services Act 1998 (see Part 2)
The purpose of the amendments to the Postal Services Act 1998 is to change the definition of letter in that Act to ensure that it is aligned with the increased cost of postage over time, and to clarify that courier services are not regulated by that Act.
Takeovers Act 1993 (see subpart 12 of Part 1)
The purpose of the Takeovers Act 1993 amendments is to ensure that timely and cost-effective decisions are made in relation to takeovers code company takeover expense-related disputes.
Minister of Finance’s statement on consultation process followed in formulation of amendment to New Zealand Superannuation and Retirement Income Act 2001
Section 73 of the New Zealand Superannuation and Retirement Income Act 2001 (the Act) provides that the Minister must, on the introduction into the House of Representatives of a Government Bill that proposes an amendment to the Act, bring to the attention of the House the consultation process that was followed in the formulation of the proposed amendment.
This Bill proposes amendments to Part 4 of the Act. The Bill proposes to amend section 83 to confer additional functions on the Retirement Commissioner.
In preparing the Bill, consultation occurred with, and agreement was gained from, the Retirement Commissioner, the Treasury, and the State Services Commission.
The Bill does not propose to amend Part 1 or Part 2 of the Act, so no consultation was undertaken with the parties in Parliament that are in agreement with those Parts (as listed in Schedule 4 of the Act).
The Bill does not propose to amend Part 2 of the Act, so no consultation was undertaken with the Guardians of New Zealand Superannuation.