NEW ZEALAND Trends and Developments Contributed by: Brent Wicks, Violet Yu, Jonathon Russell and Sandy Chen, Cone Marshall Limited
It also recommended that the government allocate resources to prepare regulators such as the Financial Markets Authority and the Commerce Commission to deal with the risks of digital assets, and for edu - cational institutions to consider including courses in relation to digital assets, blockchain and a wider focus on technology. While the government did not address all recommen - dations outlined in the 2023 report, it did respond positively and generally supports the primary purpose of the report; it wishes to support the growth of the digital assets industry in New Zealand. It is suggested in the government’s response that there is currently work in progress which aligns with the recommenda - tions of the report, including: • the Reserve Bank of New Zealand undertaking work in looking at the opportunity of cryptocurren - cy and its use in New Zealand as a potential digital currency; and • the Financial Markets Authority providing guidance on the investment of cryptocurrencies and digital assets that may constitute financial products. Corporate Governance Legislation Changes Corporate governance legislation, in particular the Companies Act 1993, is under review and on the reform agenda because the legislative framework is considered outdated. The reform is divided into two phases. The first phase focuses on modernisation, simplifica - tion and digitalisation of the company administration process to increase efficiency and reduce compliance costs. Currently, New Zealand’s company registry is freely open to the public and all individuals who are directors or shareholders have their full name and residential address on display for all to see. Going forward, the creation of a unique ID for directors will enable individuals to be tracked on the register.
There are proposed changes to the Insolvency Act 2006, including a change in favour of related credi - tors, by extending the timeframe in which transactions maybe voidable before a business is insolvent. On the other hand, the timeframe for voidable transactions to unrelated party creditors will be reduced. Under the second phase, the Law Commission will review directors’ duties, liability, offences, penalties and enforcement. In particular, the issues raised in the case of Yan v Mainzeal Property and Construc- tion Limited (in liquidation) [2023] NZSC 113 (the Mainzeal Case ) and other cases will be considered. In the Mainzeal Case , the directors were held to be liable for insolvent trading. It was a significant case as the judgment highlighted the issue of insolvent trading and provided guidance for directors of insolvent com - panies and how they are to conduct themselves to avoid potential liability for breach of statutory duties. The Law Commission intends to review and refine directors’ duties and liabilities in consideration of the overall burden on directors and how these duties may impact on directors’ willingness to take on legitimate business risks. Conclusion The trends and developments in New Zealand laws and legislation are showing its sensitivity to chang - ing mindsets and the need for the law to catch up with present-day value systems, such as the attitude towards estate planning and increased focus on mak - ing New Zealand more accessible for business and investment. The changes discussed are just imple - mented, under review or only in the early stages, therefore it will be a matter of time before their ripple effects are observed.
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