KEY POINTS:
The Securities Commission and the Commerce Commission are commonly known as the market watchdogs. They're the ones who ensure rules and regulations are fair, investigate claims of bad business practice - and publicly haul companies and individuals over the coals for it.
Both commissions are independent of the Crown, but there are times when the two clash. Commission members are appointed by or recommended by the Government, and both commissions are answerable to their ministers.
The Securities Commission is the country's main investment regulator and is charged with protecting investors from bad practice, and building confidence in New Zealand's investment markets. It's generally regarded as having fewer "teeth" than the Commerce Commission since it mainly investigates claims and recommends action to the government.
When carpet maker Feltex was put into liquidation last year the commission investigated its practices, and reported that the company had failed to make material disclosures about its banking arrangements in the months leading up to its collapse.
The commission is headed by Jane Diplock, and its roles include:
* investigating people who sell illegal investments or scams;
* investigating offer documents and advertisements for investments that might mislead people, and banning them if they are likely to deceive, confuse or mislead people.
* investigating claims of insider trading. The commission also reports publicly on bad securities practices, examines the rules for stock exchanges and advises whether the Government should approve them, and recommends changes to improve securities law.
The commission has the power to collect evidence concerning securities law and practice. That includes being able to summon people to appear before it and answer to it. It can also:
* suspend or cancel a company's registered prospectus, and suspend or prohibit an investment statement.
* enforce insider trading and substantial security holder law, and continuous disclosure law.
See the Securities Commission's website for more information.
