Commission says diclosure needs to improve

The Securities Commission has warned that it will be reviewing finance company disclosure documents this year and may take action if necessary.

Tuesday, 26 April 2005

“In particular the risks of the investment should be made clear to people who are considering investing with a finance company,” chairman Jane Diplock says.

The Commission has published its report on disclosure by finance companies, which follows a discussion paper released in September.

The report explains the commission’s expectations for disclosure by finance companies under the Securities Act and Securities Regulations.

“We have identified areas where disclosure by finance companies generally could be improved in order to comply with the law,” Diplock says.

“The report sets out the Commission’s understanding of certain aspects of the law and signals the approach that we intend to take in enforcement work”.

 Each finance company must determine how it interprets the disclosure required by law and how it assesses the matters raised in the Commission’s report.

The commission will review a sample of finance companies’ disclosure documents later this year. 

“If breaches of the law are found, we will raise these matters with the finance company concerned and if necessary take appropriate enforcement action,” Diplock says.

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