Fiscal Implications
83. The Securities Commission already conducts monitoring of securities exchanges, and has an existing regulatory role in relation to futures exchanges and futures dealers. Given this, the additional costs to the Securities Commission of performing its statutory functions as regulator under the proposals outlined in this paper are expected to be minimal and can be met from the Securities Commission's existing funding.
84. Similarly, as the Reserve Bank has an existing oversight role in relation to New Zealand's financial system under the Reserve Bank of New Zealand Act 1989, the additional costs to the Reserve Bank under the proposals outlined in this paper are also expected to be minimal.
Human Rights
85. The proposals in this paper are not inconsistent with the New Zealand Bill of Rights Act 1990 and the Human Rights Act 1993.
Legislative Implications
86. The proposals require amendments to be made to the Securities Markets Act 1988, the Personal Properties Securities Act 1999, the Securities Act 1978 and the Securities Transfer Act 1991 (along with other minor consequential amendments). Officials consider legislation can be drafted by the end of 2007 for introduction to parliament in February 2008.
87. NZX submit that the proposed amendments are necessary to ensure the proposed futures trading platform meets international best practice. NZX plan to launch their emissions trading platform in mid 2008 (expected May 2008) and would prefer to have the necessary legislative amendments in place by then. I propose, therefore, that the recommendations in this paper be the subject of a standalone Bill separate from the anticipated Bill on a New Zealand Emissions Trading Scheme and that the standalone Bill be added to the 2007 legislative programme with a category 5 priority (instructions to the Parliamentary Counsel Office to be provided in the year).
Regulatory Impact Analysis
88. The Ministry of Economic Development (MED) confirms that the Code of Good Regulatory Practice and the regulatory impact analysis requirements, including the consultation RIA requirements, have been complied with. A RIS was prepared and MED considers the RIS and the RIA analysis undertaken to be adequate. A draft RIS was circulated with the Cabinet paper for departmental consultation purposes.
Publicity
89. It is important to ensure that there is a clear conceptual separation between the Emissions Trading Scheme (which provides a register of ownership of interests in emissions units) and the proposals in this paper (which relate to improvements to the regulatory environment for futures exchanges and clearing and settlement systems more generally).
90. Therefore, I do not intend to issue a general media release, however I will communicate Cabinet's decisions to NZX in order to provide them with the assurance they require to continue development of the TZ1 emissions trading platform.
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