Securities Act 1978

5 Exemptions from this Act

  • (1) Nothing in Part 2 shall apply in respect of—

    • (a) [Repealed]

    • (b) any estate or interest in land for which a separate certificate of title can be issued under the Land Transfer Act 1952 or the Unit Titles Act 2010, other than any such estate or interest that—

      • (i) forms part of a contributory scheme; and

      • (ii) does not entitle the holder to a right in respect of a specified part of the land for which a separate certificate of title can be so issued; or

    • (c) any proprietary right to chattels (other than any such right that forms part of a contributory scheme); or

    • (d) any share in the share capital of a flat or office owning company (as defined in section 121A(1) of the Land Transfer Act 1952); or

    • (e) any interest or right to participate in the capital, assets, earnings, royalties, or other property of any company, partnership, or other person whose sole undertaking is the practice, conduct, or operation of any 1 or more of the professions, occupations, or businesses that may in law be practised, conducted, or operated only by persons having or possessing qualifications specified in Schedule 2; or

    • (f) a mortgage of land other than a contributory mortgage; or

    • (g) [Repealed]

    • (h)  a share purchased or subscribed for by an employee of a company under a share purchase scheme as defined in section YA 1 of the Income Tax Act 2007; or

    • (i) an interest in the Government Superannuation Fund; or

    • (j) [Repealed]

    • (k) an interest in a retirement village that is an interest exempted from this Act by section 107(1) of the Retirement Villages Act 2003.

    (2) An exemption under subsection (1) does not apply—

    • (a) in the circumstances prescribed by regulations made under section 70AAA; or

    • (b) if any additional requirements prescribed by regulations made under section 70AAA are not satisfied.

    (2A) [Repealed]

    (2B) [Repealed]

    (2C) Nothing in sections 33(2), 37, 37A(1)(c) and (d), 39 to 43B, 45 to 52, 54, and 54B(3) shall apply in respect of any debt security the issuer of which is a registered bank.

    (2CA) Nothing in Part 2 (except sections 38B and 58) or the regulations applies to an advertisement made by or on behalf of an issuer that—

    • (a) states that—

      • (i) the issuer is considering making an offer of securities to the public; and

      • (ii) no money is currently being sought and that no applications for securities will be accepted or money received unless the subscriber has received an investment statement or, if the securities are to be offered in a simplified disclosure prospectus, a copy of that prospectus; and

    • (b) if the issuer wishes, states that the issuer is seeking preliminary indications of interest and, in this case, also states—

      • (i) how indications of interest may be made; and

      • (ii) that no indication of interest will involve an obligation or commitment of any kind; and

    • (c) contains no other information, except any or all of the following:

      • (i) the name of the issuer:

      • (ii) a description of the securities intended to be offered, including a brief description of any rights or privileges to be attached:

      • (iii) the rate or rates of interest (if any) that may be earned by holding the securities intended to be offered:

      • (iv) the total number of securities intended to be offered:

      • (v) a statement of the intended use of the subscriptions:

      • (vi) the terms of the intended offer:

      • (vii) a description of the class of persons to whom it is intended the offer will be made:

      • (viii) the date at which the issuer expects that the offer will be made; and

    • (d) is dated and is not distributed to any person later than 6 months after its date.

    (2CB) Nothing in Part 2 (except sections 38B and 58) or the regulations applies in respect of a security if—

    • (a) the only persons in New Zealand who are able, under the terms of the offer of the security, to subscribe for the security are eligible persons; and

    • (b) the subscriber is an eligible person.

    (2CBA) Nothing in Part 2 (except sections 38B and 58) or the regulations applies in respect of a security if—

    • (a) the only persons in New Zealand who are able, under the terms of the offer of the security, to subscribe for the security are—

      • (i) eligible persons; and

      • (ii) persons who fall within 1 or more of the categories set out in subparagraphs (i) to (iii) of section 3(2)(a); and

    • (b) the subscriber is either—

      • (i) an eligible person; or

      • (ii) a person who falls within 1 or more of the categories set out in subparagraphs (i) to (iii) of section 3(2)(a).

    (2CC) For the purposes of subsections (2CB) and (2CBA), a person is an eligible person if the person is 1 or more of the following:

    • (a) wealthy (as defined in subsection (2CD)):

    • (b) experienced in investing money (as defined in subsection (2CE)):

    • (c) experienced in the industry or business to which the security relates (as defined in subsection (2CE)).

    (2CD) For the purposes of subsection (2CC)(a), a person is wealthy if an independent chartered accountant certifies, no more than 12 months before the offer is made, that the chartered accountant is satisfied on reasonable grounds that the person—

    • (a) has net assets of at least $2,000,000; or

    • (b) had an annual gross income of at least $200,000 for each of the last 2 financial years.

    (2CDA) To avoid doubt, for the purposes of subsections (2CC)(a) and (2CD), person includes—

    • (a) the trustees of a trust acting jointly in their capacity as trustees of that trust; and

    • (b) the sole trustee of a trust acting in his, her, or its capacity as trustee of that trust.

    (2CE) For the purposes of subsection (2CC)(b) and (c), a person is experienced in investing money or in the industry or business to which the security relates (as the case may be) if—

    • (a) an independent financial service provider is satisfied on reasonable grounds that the person to whom the offer is made, as a result of having experience of that kind, is able to assess—

      • (i) the merits of the offer; and

      • (ii) the value of the security; and

      • (iii) the risks involved in accepting the offer; and

      • (iv) that person's own information needs; and

      • (v) the adequacy of the information given by the person making the offer; and

    • (b) the financial service provider gives the person to whom the offer is made, before the security is allotted to the person, a written statement of the financial service provider's reasons for being satisfied as to those matters; and

    • (c) the person to whom the offer is made signs a written acknowledgment, before the security is allotted to the person, that—

      • (i) the financial service provider has given the person neither an investment statement nor a registered prospectus relating to the security; and

      • (ii) the person understands that he, she, or it will not receive information usually provided by an issuer in respect of an offer of securities to the public including (in particular) an investment statement and a registered prospectus.

    (2CF) For the purposes of subsection (2CE),—

    financial service provider means a person whose principal business consists of 1 or more of the following:

    • (a) the giving of investment advice:

    • (b) the receiving of investment money:

    • (c) the receiving of investment property

    investment advice has the same meaning as in section 2(1) of the Securities Markets Act 1988

    investment money means any money received from, or on account of, a member of the public in relation to buying or selling securities

    investment property means security certificates or other valuable property received from, or on account of, a member of the public in relation to buying or selling securities.

    (2CG) The Governor-General, by Order in Council, may make regulations for all or any of the following purposes:

    • (a) amending the amounts of minimum net assets and minimum annual gross income that apply under subsection (2CD):

    • (b) prescribing how net assets referred to in subsection (2CD) are to be determined and valued, either generally or in specified circumstances:

    • (c) prescribing how gross income referred to in subsection (2CD) is to be calculated, either generally or in specified circumstances.

    (2D) Nothing in sections 37A(1)(a) and 38C to 38E and 43F shall apply in respect of—

    • (a) an interest in a call debt security as defined in regulations made under this Act; or

    • (b) an interest in a call building society share as defined in regulations made under this Act; or

    • (c) an interest in a bonus bond.

    (2E) [Repealed]

    (2F) [Repealed]

    (3) Nothing in sections 33(2), 33(3), 34 to 37, 37A(1)(c) and (d) and (2), 39 to 43B, 44B to 54, and 57A to 65F shall apply in respect of any security the issuer of which is—

    • (a) the Crown; or

    • (b) [Repealed]

    • (c) the National Provident Fund Board established by the National Provident Fund Act 1950; or

    • (d) the Reserve Bank of New Zealand constituted under the Reserve Bank of New Zealand Act 1964; or

    • (f) [Repealed]

    (3A) Nothing in sections 37, 37A(1)(c) and (d) and (1A), and 39 to 43B applies in respect of a debt security the issuer of which is a local authority.

    (3B) The exemption in subsection (3A) is subject to the conditions that—

    • (a) the investment statement relating to the debt securities refers to the most recent audited financial statements, and audited consolidated financial statements, for the local authority; and

    • (b) if the date of allotment of the debt securities would be more than 9 months after the balance date of the financial statements referred to in paragraph (a), the investment statement relating to the debt securities refers to interim financial statements, and interim consolidated financial statements, for the local authority that have been prepared in accordance with generally accepted accounting practice (within the meaning of section 5(1) of the Local Government Act 2002) for a period beginning on the day after that balance date and ending on a date that is not more than 9 months later; and

    • (c) it is a term of the offer of the debt securities to the public that the local authority will, upon the request of a security holder or a prospective investor for a copy of any financial statements referred to in paragraph (a) or (b), without fee, send, or cause to be sent, to that security holder or prospective investor, a copy of those statements; and

    • (d) the investment statement relating to the debt securities contains, unless the debt securities are expressly guaranteed by the Crown under the Public Finance Act 1989, a statement that the debt securities being offered are not guaranteed by the Crown.

    (3C) The conditions in subsection (3B) apply despite anything to the contrary in any regulations made under this Act.

    (3D) The financial statements referred to in subsection (3B)(a) and (b) must, for the purposes of this Act, be treated as forming part of the investment statement relating to the debt securities.

    (4) Nothing in sections 6, 33(3), 37, 37A, 38C to 38E, 39 to 43B, and 45 to 53 shall apply in respect of an interest in a contributory mortgage that is offered to the public for subscription by a contributory mortgage broker.

    (4A) Nothing in sections 33, 37, and 37A(1)(a) shall apply in respect of an adjustment under section HL 7(3) of the Income Tax Act 2004 of the portfolio investor interest of an investor by a portfolio investment entity.

    (4B) The exemption in subsection (4A) does not apply if the portfolio investment entity has under section HL 7(4) of the Income Tax Act 2004 offered the investor a choice of the method of adjustment.

    (5) [Repealed]

    (5A) [Repealed]

    (5B) [Repealed]

    (6) [Repealed]

    Section 5(1)(a): repealed, on 1 July 1989, by section 43(1) of the Securities Markets Act 1988 (1988 No 234).

    Section 5(1)(b): amended, on 20 June 2011, by section 233(1) of the Unit Titles Act 2010 (2010 No 22).

    Section 5(1)(d): substituted, on 1 July 1994, by section 2 of the Company Law Reform (Transitional Provisions) Act 1994 (1994 No 16).

    Section 5(1)(d): amended, on 28 July 2009, by section 7(1) of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).

    Section 5(1)(g): repealed, on 1 September 1983, by section 5(1) of the Securities Amendment Act 1982 (1982 No 147).

    Section 5(1)(h): amended, on 1 April 2008, by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).

    Section 5(1)(h): amended, on 1 April 2005, by section YA 2 of the Income Tax Act 2004 (2004 No 35).

    Section 5(1)(h): amended, on 15 April 2004, by section 7(1) of the Securities Amendment Act 2004 (2004 No 31).

    Section 5(1)(j): repealed, on 1 September 1983, by section 5(1) of the Securities Amendment Act 1982 (1982 No 147).

    Section 5(1)(k): added, on 1 May 2007, by section 110 of the Retirement Villages Act 2003 (2003 No 112).

    Section 5(2): substituted, on 1 May 2011, by section 7(1) of the Securities Amendment Act 2011 (2011 No 6).

    Section 5(2A): repealed, on 1 October 1997, by section 6(1) of the Securities Amendment Act 1996 (1996 No 100).

    Section 5(2B): repealed, on 1 October 1997, by section 6(2) of the Securities Amendment Act 1996 (1996 No 100).

    Section 5(2C): substituted, on 1 October 1997, by section 6(3) of the Securities Amendment Act 1996 (1996 No 100).

    Section 5(2C): amended, on 1 May 2011, by section 7(2) of the Securities Amendment Act 2011 (2011 No 6).

    Section 5(2CA): inserted, on 15 April 2004, by section 7(2) of the Securities Amendment Act 2004 (2004 No 31).

    Section 5(2CA)(a)(ii): amended, on 28 July 2009, by section 7(2) of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).

    Section 5(2CB): inserted, on 15 April 2004, by section 7(2) of the Securities Amendment Act 2004 (2004 No 31).

    Section 5(2CB)(a): amended, on 28 July 2009, by section 7(3) of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).

    Section 5(2CBA): inserted, on 28 July 2009, by section 7(4) of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).

    Section 5(2CC): inserted, on 15 April 2004, by section 7(2) of the Securities Amendment Act 2004 (2004 No 31).

    Section 5(2CC): amended, on 28 July 2009, by section 7(5) of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).

    Section 5(2CD): inserted, on 15 April 2004, by section 7(2) of the Securities Amendment Act 2004 (2004 No 31).

    Section 5(2CD): amended, on 28 July 2009, by section 7(6) of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).

    Section 5(2CDA): inserted, on 28 July 2009, by section 7(7) of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).

    Section 5(2CE): inserted, on 15 April 2004, by section 7(2) of the Securities Amendment Act 2004 (2004 No 31).

    Section 5(2CE)(c): substituted, on 28 July 2009, by section 7(8) of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).

    Section 5(2CF): inserted, on 15 April 2004, by section 7(2) of the Securities Amendment Act 2004 (2004 No 31).

    Section 5(2CF) investment advice: amended, on 29 February 2008, by section 14 of the Securities Markets Amendment Act 2006 (2006 No 47).

    Section 5(2CG): inserted, on 15 April 2004, by section 7(2) of the Securities Amendment Act 2004 (2004 No 31).

    Section 5(2D): inserted, on 1 October 1997, by section 6(3) of the Securities Amendment Act 1996 (1996 No 100).

    Section 5(2D): amended, on 1 May 2011, by section 7(3) of the Securities Amendment Act 2011 (2011 No 6).

    Section 5(2E): repealed, on 15 April 2004, by section 7(3) of the Securities Amendment Act 2004 (2004 No 31).

    Section 5(2F): repealed, on 15 April 2004, by section 7(3) of the Securities Amendment Act 2004 (2004 No 31).

    Section 5(3): amended, on 1 May 2011, by section 7(2) of the Securities Amendment Act 2011 (2011 No 6).

    Section 5(3): amended, on 1 May 2011, by section 7(4) of the Securities Amendment Act 2011 (2011 No 6).

    Section 5(3): amended, on 1 October 1997, by section 6(4) of the Securities Amendment Act 1996 (1996 No 100).

    Section 5(3): amended, on 1 September 1983, by section 5(4) of the Securities Amendment Act 1982 (1982 No 147).

    Section 5(3)(b): repealed, on 1 July 1998, by section 13(1) of the Local Government Amendment Act (No 3) 1996 (1996 No 83).

    Section 5(3)(e): amended, on 1 July 2001, by section 24(1) of the Housing Corporation Amendment Act 2001 (2001 No 37).

    Section 5(3)(f): repealed, on 1 May 1990, by section 20 of the Rural Banking and Finance Corporation of New Zealand Act 1989 (1989 No 81).

    Section 5(3A): inserted, on 9 April 2008, by section 5(1) of the Securities (Local Authority Exemption) Amendment Act 2008 (2008 No 23).

    Section 5(3A): amended, on 1 May 2011, by section 7(2) of the Securities Amendment Act 2011 (2011 No 6).

    Section 5(3B): inserted, on 9 April 2008, by section 5(1) of the Securities (Local Authority Exemption) Amendment Act 2008 (2008 No 23).

    Section 5(3C): inserted, on 9 April 2008, by section 5(1) of the Securities (Local Authority Exemption) Amendment Act 2008 (2008 No 23).

    Section 5(3D): inserted, on 9 April 2008, by section 5(1) of the Securities (Local Authority Exemption) Amendment Act 2008 (2008 No 23).

    Section 5(4): substituted, on 1 September 1983, by section 5(5) of the Securities Amendment Act 1982 (1982 No 147).

    Section 5(4): amended, on 1 May 2011, by section 7(2) of the Securities Amendment Act 2011 (2011 No 6).

    Section 5(4): amended, on 1 May 2011, by section 7(5) of the Securities Amendment Act 2011 (2011 No 6).

    Section 5(4): amended, on 1 October 1997, by section 6(5) of the Securities Amendment Act 1996 (1996 No 100).

    Section 5(4A): inserted, on 1 October 2007, by section 233 of the Taxation (Savings Investment and Miscellaneous Provisions) Act 2006 (2006 No 81).

    Section 5(4B): inserted, on 1 October 2007, by section 233 of the Taxation (Savings Investment and Miscellaneous Provisions) Act 2006 (2006 No 81).

    Section 5(5): repealed, on 1 May 2011, by section 7(6) of the Securities Amendment Act 2011 (2011 No 6).

    Section 5(5A): repealed, on 1 May 2011, by section 7(6) of the Securities Amendment Act 2011 (2011 No 6).

    Section 5(5B): repealed, on 1 May 2011, by section 7(6) of the Securities Amendment Act 2011 (2011 No 6).

    Section 5(6): repealed, on 1 May 2011, by section 7(6) of the Securities Amendment Act 2011 (2011 No 6).