Botherway in box seat to make changes

Simon Botherway was yesterday named chairman of a new nine-member board selected to set up the new Financial Markets Authority. Photo / Dean Purcell

Former activist fund manager Simon Botherway wants the new super regulator to help close the "yawning gaps" between what people expect from a regulator and what they are empowered to do - and now he will have the power to make it happen.

Botherway was yesterday named chairman of a new nine-member board selected to set up the new Financial Markets Authority (FMA).

The establishment board, which also includes fiery shareholders' advocate Bruce Sheppard and former Commerce Commission chairwoman Paula Rebstock, will consolidate the powers and functions of the Securities Commission, some functions of the Registrar of Companies and the Government Actuary, and some of the regulatory roles of sharemarket operator the NZX into a new Crown entity.

Commerce Minister Simon Power, who announced the new authority last month, said the members were recognised leaders in their fields and would bring a wealth of experience and expertise in financial markets to the board.

Botherway said the appointment had come as a surprise.

"I don't think anybody really expected to be asked to do something like that. I feel quite honoured. It's a big task ahead."

Botherway said he believed his selection was down to his broad market experience from the practitioner side.

"Regulators globally have come in for some criticism in the last couple of years and I guess they were looking for a slightly different approach."

Botherway said the Government wanted to kick-off the FMA by May next year and one of the first priorities of the board would be the establishment of its structure and identification of the duties required in terms of the executive.

Botherway did not want to commit to a set date for the appointment of a chief executive, if that was the structure the board chose, but said he would prefer it to happen sooner.

"Personally I would like to see that happen in a tight timeframe. But it's important to get the right person."

The search would be international although it would be harder to meet a tight timeframe if someone from overseas was appointed, he admitted.

The board would also decide whether new commissioners for the FMA would be full-time or part-time.

"That will have a significant bearing on the number of commissioners selected."

Botherway, who joined investment watchdog the Securities Commission as a member last year, said there had been a lot of criticism of regulators around the world, not just in New Zealand. But he believed much of that stemmed from a misunderstanding of the powers of regulators.

"The shortcomings at least partially spring from what is something of a yawning gap between what were the expectations of what a regulator could do and what regulations empowered them to do. I would anticipate something of a closing of that gap."

Botherway said the powers of the new FMA would be very important in allowing it to take action at the top of the cliff rather than at the bottom.

Botherway said he was pleased with other people appointed to the board.

New Zealand Shareholders Association chairman Bruce Sheppard said he was honoured by the appointment.

"It's a job of a lifetime. It's a once in a generation chance to do something fundamentally good."

But it will be a big change for Sheppard, who said he felt like it was 1945 after the end of World War II.

"It's Berlin, I'm General Patton and for the last 10 years I've been happy to kill everything in my path. But the war is over and now I have to work out how to rebuild the economy."

Sheppard said his priority was to successfully preserve the good parts of what New Zealand had while creating a "robust safety net" and getting it all under one umbrella. "We all have views. But the challenge in a committee is to have an open mind and it has to be an open environment to allow for the free flow of views."

The establishment board will hold its first meeting next month in Wellington.

CREATING A SUPER REGULATOR

* The Financial Markets Authority (FMA) will have the sole responsibility for enforcing securities, financial reporting and company laws. It was announced by the Government in April.

* Yesterday the Government announced the board which will set up the FMA. Its nine members are:

Simon Botherway - Chairman
Founded Brook Asset Management and was its executive chair until June 2008. He is a chartered financial analyst, a director on the board of Fisher & Paykel Appliances, and a member of the Securities Commission and the Electricity Authority Establishment Board.

Bruce Sheppard
Established Gilligan Sheppard Chartered Accountants in 1985, and formed the NZ Shareholders Association in 2001. His background is in auditing and accounting. He has served on a number of private company boards and SMEs.

Paula Rebstock
Economic consultant and professional director. She chairs the Welfare Working Group, is Deputy Chair of the board of NZ Railways, and is a member of the Shared Services Establishment Board. She chaired the Commerce Commission from 2003 until 2009.

Frank Mclaughlin
Corporate lawyer and partner at law firm Chapman Tripp. He advises a wide range of corporate and financial institutions on corporate governance and financial market law matters.

Andrew Harmos
The chairman of NZX Limited and a director of specialist corporate legal advisory firm Horton Harmos Lusk Limited, which he founded in 2002 with two colleagues. He started his legal career with the law firm Russell McVeagh in 1981, becoming a partner in 1986.

Shelley Cave
A member of the Securities Commission. She has been a partner at commercial law firm Simpson Grierson since 2001.

Neville Harris
The Registrar of Companies. His previous roles include chief investigating solicitor for the commercial affairs division of the Department of Justice, and Assistant Secretary for Justice.

Mariette Van Ryn
The general manager of regulatory affairs, customer advocacy and general counsel at Westpac NZ. Van Ryn is a widely recognised expert in banking and finance law.

Scott St John
Chief executive of First NZ Capital, chairman of the Securities Industry Association, and was a member of the Capital Markets Development Taskforce. He is an NZX accredited adviser, a member of the New Zealand Institute of Chartered Accountants, and a member of the Institute of Finance Professionals of New Zealand.