The Government continues to work through the aftermath of the global financial crisis and the subsequent failure of finance companies. Part of the clean up effort is to restore investor confidence, and the government has taken it upon itself to overhaul the existing securities law. The Financial Markets Conduct Bill (the Bill) has been introduced by Simon Power and is “the result of a comprehensive review of securities law and takes into account the work of the Capital Markets Development Taskforce, the effects of the global financial crisis, and the failure of finance companies [and] will play a crucial role in restoring investor confidence”. However a re-write of the securities law will involve a tricky balancing act, the Government must not stifle markets with over-regulation but rather provide for an appropriate level of innovation and flexibility whilst protecting investors as much as reasonably possible.
Parliament’s Commerce Committee has also responded with suggested improvements to the securities law. The Committee recommended that legislation should clearly state the duties imposed on directors. The committee also recommended that the relationship between investors and financial market agents be governed by an overarching principle of fiduciary duty. Along with other measures that the Government has set into play, the introduction of this Bill will ensure positive changes to the securities law and both investors and finance companies will need to stay attentive to these developments.