Futures rules welcomed

Press, 30 September 1988, Page 19

Futures rules welcomed

PA Auckland Established futures dealers have welcomed proposed legislation which sets out to regulate their operations and to deter unscrupulous traders.

Parliament’s Law Reform Select Committee in Auckland yesterday heard submissions on the Securities Law Reform Bill. Submissions were presented by the New Zealand Futures Exchange on behalf of 17 trading members and 22 affiliated members, and by the independent Kinetic Investments (N.Z.), Ltd. Both groups said they were pleased less desirable traders had largely disappeared in the last 18 months. The exchange claimed the legislation in Australia had forced unscrupulous traders to move to New Zealand. “There was no statutory restriction on their operating in New Zealand,” the com-

pany’s managing director, Mr Len Ward, said. “The public has lost many millions of dollars in a very short time through the activities of these traders.” He said that at one time there were up to 20 organisations claiming to be futures brokers. The company’s solicitor, Mr John Lusk, said that statutory controls should discourage what he called "bucket shops.” The trading manager of Kinetic, Mr Michael Eaton, referred to such operators as "rogues” and "fringe operators.” His company, he said, had suffered as a result of the rogues both within New Zealand and overseas. He said fringe operators had stolen investors’ savings, often life savings. They had traded their own book.