Happily, it looks like the police have decided it's a non-issue after discussion with the FMA:

*"The Financial Markets Authority (FMA) said the Cluster Munitions Prohibition Act contained two "thresholds" that were a barrier to establishing whether a KiwiSaver manager had broken the law....

The way the law is framed, it is extremely unlikely that either threshold would be established for collective investment funds that are investing in other funds or participating indirectly in secondary markets," the FMA said"* -- stuff.

They even point out that money traded on secondary markets isn't money actually funding the companies in question, and will revisit again as required. I think that's a good decision.

As for re-writing the laws, I don't think it's needed. If we were to update them, I'd be happy if (non-munition sector) index funds were explicitly carved out. I think going the other way would be myopic.

The 43% Fonterra owned company Sanlu poisoned 300,000 Chinese causing six fatalities and 54,000 hospitalisations. I think we're yet to charge direct owners of Fonterra (incl. 10,500 farmers) for their responsibility for it for anything close to "a term not exceeding seven years or a fine not exceeding $500,000, or both" -- Cluster Munitions Prohibition Act 2009, or even a week and $50. Why? Because they're not responsible and in this case, they might be able to actually exercise some influence over Fonterra.

As I've said before, I like the idea of Vanguard offering it's funds in New Zealand. Here's hoping this discussion has them noticing we're interested in their products, and bring more of what they're offering to market directly.