Settlement Systems, Futures and Emissions Units Bill
In Committee
[Volume:658;Page:7657]
Hon NATHAN GUY (Minister of Internal Affairs) : I rise to make a contribution on the Settlement Systems, Futures, and Emissions Units Bill. It was good to hear that Labour is supporting the bill, but then I just heard the previous speaker say it is an embarrassing bill, which somewhat confused me. I want to get back to the facts of the parts of the bill, which we are debating as a whole.
Part 1 provides that trades, securities, and other products can be cleared and settled through designation systems that meet expectations of international and domestic participants in the New Zealand financial sector. Part 2 contains a savings provision that ensures that two payment systems already designated under existing Part 5C of the Reserve Bank of New Zealand Act are not affected by the amendments in this bill. Part 3 of the bill is to do with the Securities Markets Act 1988, and it amends the Act to align the regulatory environment for exchanges seeking to operate in both securities and futures markets. Registered securities exchanges and authorised futures exchanges are regulated slightly differently from each other under the Securities Markets Act. Currently, a securities exchange registers under Part 2B of the Securities Markets Act, while a futures exchange is authorised under Part 3 of the Act. Part 4 of the bill, which addresses the Personal Property Securities Act 1999, claims to clarify the regulatory treatment of emissions units to support the development of the market for emissions units. We have just heard a fair bit about that from the previous speaker. Emissions units are a relatively new product in our market. Some members of the financial sector submitted that in order to trade emissions units, the treatment of those units under our securities legislation needed to be clarified. Part 4 of the bill supports that objective by defining what an emissions unit is for the purposes of the Personal Property Securities Act. Part 5 addresses issues to do with the Securities Act 1978. It defines what an emissions unit is, and it amends the definition of “chattel” in the Securities Act to include an emissions unit. It also inserts new definitions of “emissions units” and “greenhouse gas”.
There are two Supplementary Order Papers on the table. The first, Supplementary Order Paper 81, divides the bill into four bills. That will enable Part 1 and Part 2 to become the Reserve Bank of New Zealand Amendment Bill; Part 3 and schedules 1 and 2 to become the Securities Markets Amendment Bill; Part 4 to become the Personal Property Securities Amendment Bill; and Part 5 to become the Securities Amendment Bill. Supplementary Order Paper 80 makes very technical amendments to the bill.