Monitoring enforceable undertakings

Enforceable undertakings are one of the sanctions available to the New Zealand Securities Commission. This remedy is a form of settlement that allows this regulator to deal with alleged contraventions of the laws it administers without the need to initiate court action. This article firstly gives a brief overview of the sanction of an undertaking to highlight one of the main characteristics of this sanction: The ability of the regulator to enforce the undertaking in court. This will in turn illustrate the importance of the establishment of a good monitoring system to ensure compliance with the terms of the undertaking. The paper then considers the methods used by the New Zealand Securities Commission to monitor compliance of the promisor with the terms of the undertaking to examine the strength and weaknesses of the system.