The Financial Markets Conduct (FMC) bill is a 600-plus page document whose full contents are probably best digested by lawyers and insomniacs.

No doubt the legislation contains plenty of fish-hooks, loopholes and get-out clauses that the financial industry will be poring over as the FMC moves through its final official phases.

But if you don't want to read the bill in its entirety, perhaps the Commerce Committee report, released last Friday, might do.

According to the Commerce Committee report, the FMC has been designed to "promote and facilitate the development of fair, efficient, transparent financial markets and to promote the confident and informed participation of businesses, investors and consumers in the financial markets".


And it does this by trying to capture just about every detail of the financial products and services universe under its considerable ambit.

The contents alone run to about 30 mind-numbing pages but they do provide a good sketch of the financial industry structure.

The Commerce Committee's recommendations are, however, mercifully brief and include a few interesting facts.

For instance, the Committee has penciled in a new start date for the legislation, pushing it out to April 2017, two years later than originally intended, acknowledging the "complex nature of the reform".

The report also tries to clarify the criminal and civil liabilities of directors included in the bill a subject much in the news these days. Disappointingly for many readers, the use of trusts by directors to hide assets has been referred to the too-hard basket.

"We are aware of concern that directors might be unable to pay penalties or compensate investors, since most directors' assets can be transferred to trusts," the report says. "The use of trusts in commercial and asset-protection contexts has implications beyond the scope of this bill."

The Committee has also attempted to keep up on technological trends by recommending the practice of "crowd funding" ie raising money for projects over the internet be included in the FMC.

Under the Committee's proposal crowd-funding would be defined as an "intermediary service for which providers could apply for a licence".


As well, the Committee members have bowed to contemporary NZ financial reality by recommending a lower monetary threshold for defines a "large" person under its wholesale client exclusion rules.

If an individual or business is classified as a wholesale (sometimes called sophisticated) client, chunks of the FMC and other laws won't apply.

In the initial FMC draft a person or business could be defined as a wholesale client if they had $10 million in net assets or $20 million in turnover in each of the two previous years.

The Committee suggested a more appropriate benchmark would be $5 million in net assets or $5 million in turnover.

"Few businesses or individuals in New Zealand were likely to meet the higher threshold," the Committee report says especially if they're hiding much of it in trusts.