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Power to fast-track moves to tighten up KiwiSaver regulation after Huljich affair

Power to fast-track moves to tighten up KiwiSaver regulation after Huljich affair

Commerce Minister Simon Power has announced he has asked officials to report back within 4 weeks on quickly adopting recommendations made by the Capital Market Development Taskforce that would extend the disclosure rules for default KiwiSaver funds to all KiwiSaver funds. The announcement follows controversy around misleading reporting of returns by Huljich Funds Management. "In recent weeks there has been growing concern regarding the regulation of KiwiSaver schemes. Mum and dad investors must have confidence that their money is being well managed," Power said in a statement. "We were intending to make changes in this area as part of the current review of the Securities Act. However, in light of recent developments, I have asked my officials to fast-track this work to ensure investor confidence is maintained," he said. There are 1.3 million savers who have invested NZ$4.88 billion in KiwiSaver funds. Power said officials would report back to him on the following areas and whether:

* The monitoring and reporting regime for default funds should be extended to all KiwiSaver funds. This would require detailed quarterly reporting to an expert monitoring panel and require that one of the trustees of KiwiSaver schemes be a trustee corporation, rather than just an independent trustee, as at present. * KiwiSaver funds should be required to regularly report to investors and the regulator on the returns, fees and assets of each fund in a consistent and comparable manner. At present, the only requirement for non-default schemes is for annual returns, and I am advised these are not prepared in a manner which allows for easy comparison between schemes. * To increase the ability of the regulator to supervise the trustees of KiwiSaver schemes and hold them accountable for fulfilling their obligations. * Further powers for enforcement by regulators are necessary.
“Improving public confidence in financial markets has been a key objective of this Government. We must ensure where possible that mistakes from the finance company collapses are not repeated," Power said.

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