Another busy year ahead for business law reform

POSTED BY Andrew Wallace
20 January 2013

posted in Business | Legislation | Company Law

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The year ahead is shaping up as another busy one for law reform, with much of the work being done on New Zealand's corporate and securities laws. It's important for companies, and their directors and investors to keep on top of what's around the corner, since the reforms will bring about major changes. A few of the key areas of reform either coming into force or being developed further this year are:

AML/CFT: The main provisions of the Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) Act 2009 come into effect from 30 June 2013. The Act applies to "reporting entities”, a term which includes banks, life insurers, finance companies, building societies, credit unions, issuers of securities, trustee companies, futures dealers, brokers, certain financial advisers, casinos, money service businesses, those involved in financial leasing, and safe deposit businesses.

Reporting entities will need, amongst other things, a written risk assessment of the money laundering and financing of terrorism that could be expected in their business, an AML/CFT programme, an appointed compliance officer, customer due diligence processes, and suspicious transaction reporting, record-keeping, auditing and annual reporting systems and processes in place.

Companies and limited partnerships: The Commerce Select Committee has released its report recommending changes to the Companies and Limited Partnerships Amendment Bill including providing the Companies Office Registrar with more information about directors and partners who are natural persons, including their date and place of birth (which will remain confidential).

Companies will need to have a director who lives in New Zealand, or who lives in and is a director of a company in an approved jurisdiction. Despite feedback indicating it wasn't necessary, the Committee hasn't removed from the Bill the criminalisation of breaches of certain directors' duties in circumstances where a director has actual knowledge that their act would have serious consequences for the company or its creditors. The Committee has indicated a willingness to contemplate redrafting these new offences to avoid having a chilling impact on legitimate business risk-taking.

Financial Reporting: Submissions on the Financial Reporting Bill, which is intended to replace the current Financial Reporting Act, closed on last Friday. If ultimately enacted, the Bill should result in a reduced reporting obligation for a large number of businesses, particularly small and medium-sized companies, which should in turn reduce compliance costs for those businesses. The reforms are also intended to make life easier for charities and not-for-profits. The Select Committee report on the Bill is due in May and will be keenly awaited.

Securities laws: The Financial Markets Conduct Bill, which is intended to replace the current Securities Act and certain related legislation, is expected to be enacted in the first half of this year and to come into force by early 2014. The focus of this year's efforts in this area will be on the regulations which will contain the detail of the new regime. The first step was taken in December with the Ministry of Business, Innovation and Employment (MBIE) releasing a discussion paper seeking submissions on the framework to establish the regulations. A much anticipated draft of the regulations themselves is expected to be released later this year.

Other noteworthy business law reforms include new rules to be introduced for insolvency practitioners, a new regulatory regime for the audit industry, and changes to the fees payable by companies (including the re-introduction of an annual report fee), financial service providers and for the use of the Personal Property Securities Register.

To find further general information on these proposals look at the MBIE's website, http://www.mbie.govt.nz/

This article was first published in the Your Law column in the Sunday Star Times on 20 January 2013.

POSTED BY Andrew Wallace
20 January 2013

posted in BusinessLegislationCompany Law

VIEWED 3311 TIMES

PERMALINK

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