New Zealand Legislation: Acts
Acts are laws made by Parliament
(1) No allotment of a security offered to the public for subscription shall be made if—
(a) The subscriber did not receive an investment statement relating to the security before subscribing for the security; or
(ab) in the case of a security that is offered in a simplified disclosure prospectus,—
(i) the subscriber did not receive, before subscribing for the security, a copy of—
(A) that simplified disclosure prospectus; and
(B) every memorandum of amendments to that prospectus that is registered by the Registrar under section 43 before the time of allotment; or
(ii) the Commission made a delayed allotment order in relation to that simplified disclosure prospectus and the subscriber subscribed for the security before the delayed allotment order was made; or
(b) At the time of allotment, the investment statement or registered prospectus relating to the security is known by the issuer of the security, or any director of the issuer, to be false or misleading in a material particular by reason of failing to refer, or give proper emphasis, to adverse circumstances (whether or not the investment statement or registered prospectus became so false or misleading as a result of a change of circumstances occurring after the date of the investment statement or registered prospectus); or
(c) The date of allotment would be more than,—
(i) Where the registered prospectus relating to the security contains or refers to a statement of financial position or interim statement of financial position in accordance with regulations and no certificate has been registered in relation to that prospectus under subsection (1A) of this section, 9 months after the date of that statement of financial position or interim statement of financial position (whichever is the later); or
(ii) Where the registered prospectus relating to the security contains or refers to a statement of financial position (but not an interim statement of financial position) in accordance with regulations and a certificate has been registered in relation to that prospectus under subsection (1A) of this section, 9 months after the date of that certificate; or
(iii) In any other case, 6 months after the date of the registered prospectus; or
(d) In the case of an equity security, debt security, or participatory security, after the allotment, the total amount of securities allotted under the registered prospectus relating to the security would (after deducting, in the case of an allotment of debt securities, the total amount of debt securities of the issuer redeemed since the date of the registered prospectus) exceed the amount specified in the registered prospectus as the maximum amount that will be so allotted.
(1AA) However, subsection (1)(a) does not apply to securities that are offered in a simplified disclosure prospectus.
(1A) For the purposes of subsection (1)(c) of this section, if no interim statement of financial position is contained or referred to in a registered prospectus, an issuer may deliver to the Registrar for registration under this Act, and the Registrar shall register, a certificate that relates to the registered prospectus and that—
(a) Is signed on behalf of all the directors by at least 2 directors of the issuer (or, where the issuer has only 1 director, by that director); and
(b) Is dated no later than 9 months after the date of the statement of financial position contained or referred to in the registered prospectus; and
(c) States that, in the opinion of all directors of the issuer after due enquiry by them,—
(i) The financial position shown in the statement of financial position referred to in paragraph (b) of this subsection has not materially and adversely changed during the period from the date of that statement of financial position to the date of the certificate; and
(ii) The registered prospectus is not, at the date of the certificate, false or misleading in a material particular by reason of failing to refer, or give proper emphasis, to adverse circumstances; and
(d) Where the registered prospectus relates to equity securities, debt securities, or participatory securities, is accompanied by financial statements—
(i) For the 6-month period from the date of the statement of financial position referred to in paragraph (b) of this subsection; and
(ii) Prepared in accordance with regulations as if they were required to be contained or referred to in a registered prospectus for those securities, except that they need not be audited.
(2) [Repealed]
(3) An allotment made in contravention of this section is (whether or not the issuer is in liquidation) voidable at the instance of the subscriber by notice in writing to the issuer at any time within the prescribed period.
(4) For the purpose of subsection (3) of this section, prescribed period means—
(a) A period of one year after the security or a certificate of the security has been sent to the subscriber; or
(b) A period of 6 months after the subscriber knows, or ought reasonably to know, that the allotment was made in contravention of the provisions of this section—
whichever is the lesser.
(5) Without limiting any enactment or rule of law, an allotment made in contravention of this section shall be valid unless notice avoiding the allotment is given by the subscriber in accordance with subsection (3) of this section.
(6) Where an allotment made in contravention of this section is avoided by the subscriber under subsection (3) of this section, the issuer shall forthwith upon receiving notice under that subsection, repay the subscriptions to the subscriber.
(7) If such subscriptions are not so repaid within one month after the date of the receipt by the issuer of notice under subsection (3) of this section, the issuer and all the directors thereof shall be jointly and severally liable to repay the subscriptions with interest at a rate prescribed from time to time by regulations made under this Act from the date on which such notice was received:
Provided that a director shall not be so liable if he or she proves that the default in the repayment of the subscriptions was not due to any misconduct or negligence on his or her part.
(8) For the purposes of the Limitation Act 1950, any sum recoverable under subsection (6) or subsection (7) is not a penalty or forfeiture or sum by way of penalty or forfeiture.
Section 37A was inserted, as from 1 September 1983, by section 16 Securities Amendment Act 1982 (1982 No 147).
Subsection (1) was substituted, as from 1 October 1997, by section 15(1) Securities Amendment Act 1996 (1996 No 100). See section 2 of that Act for transitional provisions relating to its application.
Subsection (1)(a) was amended, as from 1 October 1997, by section 4(1)(a) Securities Amendment Act 1997 (1997 No 16) by substituting the word “an”
for the word “any”
.
Section 37A(1)(ab): inserted, on 28 July 2009, by section 11(1) of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Subsection (1)(b) was amended, as from 1 October 1997, by section 4(1)(b) Securities Amendment Act 1997 (1997 No 16) by substituting the word “the”
for the word “any”
.
Subsection (1)(c)(i) and (ii) was amended, as from 1 October 1997, by section 4(1)(a) Securities Amendment Act 1997 (1997 No 16) by substituting the words “statement of financial position”
for the words “balance sheet”
in each place where they occur.
Section 37A(1AA): inserted, on 28 July 2009, by section 11(2) of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Subsection (1A) was inserted, as from 1 October 1997, by section 15(1) Securities Amendment Act 1996 (1996 No 100). See section 2 of that Act for transitional provisions relating to its application.
Subsection (1A) was amended, as from 1 October 1997, by section 4(2) Securities Amendment Act 1997 (1997 No 16) by substituting the words “statement of financial position”
for the words “balance sheet”
.
Subsection (2) was repealed, as from 15 April 2004, by section 13(1) Securities Amendment Act 2004 (2004 No 31).
Section 37A(3): amended, on 28 July 2009, by section 11(3) of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Subsection (3) was amended, as from 1 October 1997, by section 15(2) Securities Amendment Act 1996 (1996 No 100) by substituting the words “in liquidation”
for the words “wound up”
. See section 2 of that Act for transitional provisions relating to its application.
Subsection (7) was amended, as from 1 October 1997, by section 4(3) Securities Amendment Act 1997 (1997 No 16) by substituting the words “a rate prescribed from time to time by regulations made under this Act”
for the words “the rate of 10 percent per annum”
.
Subsection (7) was amended, as from 3 May 2001, pursuant to section 5(c) Securities Amendment Act 2001 (2001 No 25), by inserting after the word “he”
the words “or she”
.
Subsection (7) was amended, as from 3 May 2001, pursuant to section 5(d) Securities Amendment Act 2001 (2001 No 25), by inserting after the word “his”
the words “or her”
.
Subsection (8) was inserted, as from 15 April 2004, by section 13(2) Securities Amendment Act 2004 (2004 No 31).