(1) No security shall be offered to the public for subscription, by or on behalf of an issuer, unless—

• (a) the offer is made in, or accompanied by, an authorised advertisement that is an investment statement that complies with this Act and regulations; or

• (b) the offer is made in an authorised advertisement that is not an investment statement; or

• (c) the offer is made in, or accompanied by, a registered prospectus that complies with this Act and regulations.

(2) No debt security shall be offered to the public for subscription, by or on behalf of an issuer, unless—

• (a) the issuer of the security has appointed a person who holds a licence under the Securities Trustees and Statutory Supervisors Act 2011 that covers the security as a trustee in respect of the security and both the issuer and that person have signed a trust deed relating to the security; and

• (ab) the trust deed complies with this Act and the regulations; and

• (b) a copy of the trust deed has been registered by the Registrar pursuant to section 46; and

• (c) where the provisions of the trust deed have been amended, a copy of the instrument amending the deed has been registered by the Registrar pursuant to section 47.

(3) No participatory security shall be offered to the public for subscription, by or on behalf of an issuer, unless—

• (a) the issuer of the security has appointed a person who holds a licence under the Securities Trustees and Statutory Supervisors Act 2011 that covers the security as a statutory supervisor in respect of the security and both the issuer and that person have signed a deed of participation relating to the security; and

• (ab) the deed of participation complies with this Act and the regulations; and

• (b) a copy of the deed of participation has been registered by the Registrar pursuant to section 46; and

• (c) where the provisions of the deed of participation have been amended, a copy of the instrument amending the deed has been registered by the Registrar pursuant to section 47.

(1) No registered prospectus shall be distributed by or on behalf of an issuer,—

• (a) after it has been amended unless all the amendments have been incorporated in, or attached by way of an instrument to, every copy of the registered prospectus that is so distributed; or

• (b) if it is false or misleading in a material particular by reason of failing to refer, or give proper emphasis, to adverse circumstances (whether or not it became so misleading as a result of a change in circumstances occurring after the date of the prospectus).

(2) A registered prospectus shall not be distributed by or on behalf of an issuer unless it is accompanied by,—

• (a) if the registered prospectus refers to, but does not contain, financial statements registered under the Financial Reporting Act 1993, a copy of those financial statements; and

• (b) a copy of any documents registered under this Act for the purpose of extending the period during which allotments may be made under the registered prospectus.

(3) However, subsection (2)(a) does not apply to a simplified disclosure prospectus.

(1) No person shall go from house to house offering securities to the public or any member of the public.

(2) In this section, the term house shall not include an office used for business purposes, or any other premises used by the occupier wholly or partly for the purpose of carrying on any trade, business, profession, or calling.

(3) In this section, the term securities does not include life insurance policies or securities in any co-operative company or building society.

An issuer must ensure that subscriptions for securities offered to the public are held in trust for the subscribers until the securities are allotted or until the subscriptions are repaid to the subscribers under this Act.

(1) No allotment of a security offered to the public for subscription shall be made unless at the time of the subscription for the security there was a registered prospectus relating to the security.

(1A) No allotment of a security that is offered in a simplified disclosure prospectus may be made—

• (a) by a person who is subject to a prohibition order while that order is in force; or

• (b) in contravention of section 44AD(1).

(1B) No allotment of a security offered to the public for subscription may be made in contravention of section 43D(1), 43I(4), or 43K(5)(b).

(2) No allotment shall be made of an equity security or a participatory security or a unit in a unit trust offered to the public for subscription unless the amount stated in the registered prospectus relating thereto as the minimum amount which, in the opinion of the directors of the issuer, must be raised by the issue of the securities in order to provide for the matters specified in regulations made under this Act, is subscribed, and that amount is paid to, and received by, the issuer within 4 months after the date of the registered prospectus; and, for the purposes of this subsection—

• (a) a sum shall be deemed to have been paid to, and received by, the issuer if a cheque for that sum is received in good faith by the issuer and the directors of the issuer have no reason to suspect that the cheque will not be paid:

• (b) the amount so stated in the registered prospectus shall be reckoned exclusively of any amount payable otherwise than in cash.

(2A) Subsection (2) does not apply if there is no minimum amount which, in the opinion of the directors of the issuer, must be raised by the issue of the securities in order to provide for the matters specified in regulations made under this Act.

(3) An allotment of a participatory security offered to the public for subscription must not be made unless, at the time of allotment, a written statement from the subscriber authorising the subscription for that particular security has been received by—

• (a) the statutory supervisor; or

• (b) a person appointed by the statutory supervisor to receive, on the statutory supervisor's behalf, that written statement or written statements of that class.

(4) Any allotment made in contravention of the provisions of this section shall be invalid and of no effect.

(5) Where subscriptions for securities are received by or on behalf of an issuer, but, by virtue of this section, the securities may not be allotted, or for any reason the securities are not allotted, the issuer shall ensure that—

• (a) [Repealed]

• (b) the subscriptions, together with such interest (if any) as has been earned thereon, are repaid to the subscribers as soon as reasonably practicable.

(6) If any subscriptions to which this section applies are not so repaid within 2 months after the date on which the subscriptions were received by or on behalf of the issuer (or, in any case to which subsection (2) applies, within 5 months after the date of the registered prospectus), the issuer and all the directors thereof shall be jointly and severally liable to repay the subscriptions, together with interest at a rate prescribed from time to time by regulations made under this Act from the date on which the subscriptions were received by or on behalf of the issuer:

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.

(7) [Repealed]

(1) An application to the court for a relief order in respect of the application of section 37 to the allotment of a security may be made—

• (a) in respect of a contravention of section 37; and

• (b) regardless of whether the contravention occurred before or after this section comes into force; and

• (c) in connection with 1 or more subscribers.

(2) However, an application to the court for a relief order in respect of the application of section 37 to the allotment of a security may not be made if the subscription for the security has been repaid to the subscriber under section 37(5) or (6).

(3) In this section and sections 37AB to 37AL, unless the context otherwise requires,—

• (a) security holder means the person who would be the current security holder but for the application of section 37(4); and

• (b) the references to the security holder apply if the security holder is a person other than the subscriber.

Section 37(4) to (6) does not apply to the allotment of a security if a relief order under section 37AC or section 37AH or section 37AI is made in respect of the application of section 37 to the allotment of the security.

(1) The court must make a relief order in respect of the application of section 37 to the allotment of the security if the application for that order is made by—

• (a) the subscriber; or

• (b) the security holder; or

• (c) the issuer, if the subscriber consents in writing to the making of the relief order; or

• (d) the issuer, if the security holder consents in writing to the making of the relief order; or

• (e) the issuer, if—

  • (i) the contravention of section 37 was caused by a failure to comply with a condition of an exemption granted under section 5(5) (as in force before its repeal) or under section 70B or of an exemption provided under section 5(3A) or 5A; and

  • (ii) the issuer has given notice of that contravention to the subscriber in accordance with sections 37AE and 37AF; and

  • (iii) the subscriber has not objected to the court making a relief order by—

    • (A) notifying the issuer in writing within 30 working days after the day on which the notice is given that the subscriber objects to the making of the relief order; and

    • (B) including in the subscriber's objection a description as to how the contravention has materially prejudiced the interests of the subscriber.

(2) An order may be made under this section regardless of whether the contravention of section 37 occurred before or after this section comes into force.

(3) An application under this section may be made in conjunction with an application under section 37AH or section 37AI.

(1) The issuer must not obtain the consent of a person under section 37AC(1)(c) or (d) until after—

• (a) the contravention in relation to the proposed application for the relief order has occurred; and

• (b) a notice that contains, or has attached to it, the following is sent by the issuer to the person:

  • (i) any information that is necessary to enable a reasonable person to understand the nature and implications of the contravention that has occurred:

  • (ii) a statement to the effect that the notice concerns the legal rights of the person and that, if there is anything about the person's legal rights that the person does not understand, then the person should seek legal advice before giving their consent to the making of a relief order:

  • (iii) any information, documents, or copies of documents required to be sent, delivered, or provided to the person in accordance with an exemption of a kind referred to in section 37AC(1)(e)(i), if the contravention of section 37 was caused by a failure to send, deliver, or provide that information, those documents, or those copies to the person in accordance with that exemption:

  • (iv) an investment statement relating to the security, unless an exemption from section 37A(1)(a) granted or provided under this Act applies to the security or to the issuer in respect of the security (or would have applied but for a failure to comply with a condition of that exemption):

  • (v) a statement to the effect that there is a registered prospectus in relation to the security and that, at the request of the person and on payment of any prescribed fee, the issuer will send the registered prospectus to the person:

  • (vi) a statement that information concerning that prospectus can be obtained from the register:

  • (vii) if the security is offered in a simplified disclosure prospectus, a copy of that simplified disclosure prospectus.

(1A) However, subsection (1)(b)(iv) and (v) do not apply to securities that are offered in a simplified disclosure prospectus.

(2) Subsection (1)(b)(v) and (vi) does not apply if an exemption from section 37(1) granted or provided under this Act applies to the security or to the issuer in respect of the security (or would have applied but for a failure to comply with a condition of that exemption).

(3) A person's consent is of no effect for the purposes of section 37AC(1)(c) or (d) if either or both of the following apply:

• (a) that consent is given before the date on which the notice referred to in subsection (1)(b) has been received by the person:

• (b) that consent is given before there is a registered prospectus relating to the security if the notice referred to in subsection (1)(b) is required to contain, or have attached to it, the statements referred to in subsection (1)(b)(v) and (vi).

(1) The issuer must, if an application is to be made under section 37AC(1)(e), give a notice to the subscriber in accordance with this section and section 37AF after the contravention in relation to the proposed application for the relief order has occurred.

(2) The notice must contain statements or information to the following effect:

• (a) a description of the securities to which the notice relates; and

• (b) a description of the manner in which the issuer has contravened section 37; and

• (c) a summary of the effect of section 37(4) and (6) if a relief order is not made; and

• (d) a summary, if appropriate, of the effect of section 37(5) if a relief order is not made; and

• (e) that the court has the power to make an order that grants relief from the application of section 37(4) to (6); and

• (f) that the issuer is seeking, or may seek, a relief order; and

• (g) that the subscriber may object to the making of a relief order by notifying the issuer in writing within 30 working days after the day on which the notice is given that the subscriber objects to the making of the relief order; and

• (h) that, if the subscriber objects to the making of the relief order, then the subscriber must include in the subscriber's objection a description as to how the contravention has materially prejudiced the interests of the subscriber; and

• (i) that the court must make a relief order if the subscriber does not object to the making of the relief order in the manner referred to in paragraphs (g) and (h); and

• (j) the address of the issuer to which objections must be sent; and

• (k) that the notice affects the subscriber's legal rights and that, if there is anything about the subscriber's legal rights that the subscriber does not understand, then the subscriber should seek legal advice immediately; and

• (l) a summary of the effect of section 37AF(1)(d) and the names and addresses of the persons to whom the notice will be sent under section 37AF(1)(d); and

• (m) any further information and explanation as may be necessary to enable a reasonable person to understand the nature and implications of an application for a relief order and the notice.

(3) The notice may contain statements and information in connection with 1 or more subscribers.

(4) The form of the notice must be approved by the court before the notice is given to any subscriber.

(5) The court may—

• (a) grant its approval subject to any terms and conditions concerning the form and content of the notice that it thinks fit; and

• (b) require the notice to contain any information concerning the security or the issuer that it considers may assist the subscriber to decide whether or not to object to the making of the relief order.

(1) The notice to be given to a subscriber under section 37AE must be given by—

• (a) sending the notice to a current address for the subscriber; and

• (b) publishing the notice in each of the daily newspapers published in Whangarei, Auckland, Hamilton, Rotorua, Hawke's Bay, New Plymouth, Palmerston North, Wellington, Nelson, Christchurch, Dunedin, and Invercargill (unless a daily newspaper is not published in that place); and

• (c) publishing the notice on the issuer's website (if the issuer has a website) in an electronic form that is publicly accessible; and

• (d) sending a copy of the notice to,—

  • (i) in the case of a participatory security, the statutory supervisor (if any); and

  • (ii) in the case of a debt security, the trustee (if any); and

  • (iia) in the case of an interest in a KiwiSaver scheme other than a restricted scheme, the KiwiSaver trustee; and

  • (iii) in the case of a unit in a unit trust, the unit trustee (if any); and

  • (iv) the FMA.

(2) The issuer must comply with subsection (1)(a) to (d) within a consecutive period of 5 working days.

(3) However, the issuer does not have to comply with subsection (1)(a) if the issuer does not have knowledge of a current address for a subscriber and has taken reasonable steps to obtain a current address for the subscriber.

(4) The notice must be treated as having been given to the subscriber on the day within the consecutive period of 5 working days—

• (a) on which subsection (1)(a) to (d) was complied with by the issuer; or

• (b) on which subsection (1)(b) to (d) was complied with by the issuer if subsection (3) applies.

(5) The form of the notice that is published under subsection (1)(b) and (c) must not contain any personal information (within the meaning of the Privacy Act 1993) unless the court orders otherwise.

(1) The court may, on the application of a subscriber, order an issuer to pay compensation to the subscriber for any loss or damage suffered by the subscriber that is caused by a contravention of section 37.

(2) An application may be made under subsection (1) only if—

• (a) an application has been made to the court for a relief order under section 37AC; or

• (b) the court has made a relief order under section 37AC.

(3) An application under subsection (1) may not be made 1 year or more after the date on which the court makes a relief order under section 37AC (if the court has made an order).

(4) Subsection (1) applies regardless of whether the contravention of section 37 occurred before or after this section comes into force.

(1) The court may in the course of any proceedings, or on the application of the issuer under this section, make a relief order in respect of the application of section 37 to the allotment of a security if the court considers that it is just and equitable to do so.

(2) An order may be made under this section regardless of whether the contravention of section 37 occurred before or after this section comes into force.

(3) In determining whether to make a relief order under this section, the court must have regard to—

• (a) all of the circumstances relating to the allotment of the security; and

• (b) the nature and seriousness of the contravention of section 37; and

• (c) whether the contravention has materially prejudiced the interests of the subscriber; and

• (d) whether the subscriber has disposed of the security to any other person; and

• (e) any other matters that the court thinks fit.

(4) An application under this section may be made in conjunction with an application under section 37AC or section 37AI.

(1) This section applies to a contravention of section 37 in connection with the allotment of a security if that contravention is caused solely by a failure to comply, before this section comes into force, with—

• (a) any of the requirements in paragraph (d) of the definition of Australian prospectus in clause 3 of the Securities Act (Australian Unit Trusts) Exemption Notice 1995 (SR 1995/105); or

• (b) any of the requirements in paragraph (d) of the definition of Australian prospectus in clause 4 of the Securities Act (Australian Unit Trusts) Exemption Notice 1996 (SR 1996/74); or

• (c) the condition in clause 5 of the Securities Act (Australian Unit Trusts) Exemption Notice 1997 (SR 1997/216); or

• (d) the condition in clause 5 of the Securities Act (Australian Registered Managed Investment Schemes) Exemption Notice 1999 (SR 1999/119); or

• (e) the condition in clause 6 of the Securities Act (Great Britain Collective Investment Schemes) Exemption Notice 1999 (SR 1999/420).

(2) The court must, on the application of the issuer, make a relief order in respect of the application of section 37 to the allotment of the security if the contravention has not materially prejudiced the interests of the subscriber.

(3) If the contravention has materially prejudiced the interests of the subscriber, the court may make a relief order in respect of the application of section 37 to the allotment of the security if the court considers that it is just and equitable to do so having regard to—

• (a) whether the subscriber has disposed of the security to any other person; and

• (b) any other matters that the court thinks fit.

(4) An application under this section may be made in conjunction with an application under section 37AC or section 37AH.

If the court makes a relief order under section 37AH or section 37AI, the court may—

• (a) make the relief order subject to any terms and conditions that it thinks fit if the contravention of section 37 has materially prejudiced the interests of the subscriber; and

• (b) in respect of a security, order the issuer to pay compensation to—

  • (i) the subscriber for any loss or damage suffered by the subscriber that is caused by the contravention of section 37; and

  • (ii) any person who has, at any time, been a security holder in relation to the security for any loss or damage suffered by the person that is caused by the contravention of section 37; and

• (c) grant any mandatory, restrictive, or prohibitory injunction that the court thinks fit; and

• (d) make an order for any consequential relief that the court thinks fit, unless the court makes the relief order under section 37AI.

(1) If an application for an order is made under section 37AC(1)(a) or (b) in connection with a security, the applicant must, as soon as practicable, serve notice of the application on the following persons:

• (a) the issuer:

• (b) any other person that the court orders must be served with notice of the application.

(2) If an application for an order is made under section 37AC(1)(c) or (d) in connection with a security, the applicant must, as soon as practicable, serve notice of the application on the following persons:

• (a) the subscriber:

• (b) the security holder:

• (c) the FMA:

• (d) any other person that the court orders must be served with notice of the application.

(3) If an application for an order is made under any of the provisions of sections 37AG to 37AI in connection with a security, the applicant must, as soon as practicable, serve notice of the application on the following persons (unless the person is the applicant):

• (a) the issuer:

• (b) the subscriber or a representative defendant appointed by the court:

• (c) the security holder or a representative defendant appointed by the court:

• (d) the FMA:

• (e) in the case of a participatory security, the statutory supervisor (if any):

• (f) in the case of a debt security, the trustee (if any):

• (fa) in the case of an interest in a KiwiSaver scheme other than a restricted scheme, the KiwiSaver trustee:

• (g) in the case of a unit in a unit trust, the unit trustee (if any):

• (h) any other person that the court orders must be served with notice of the application.

(4) For the purposes of subsection (3)(b), a notice of an application does not have to be served on a subscriber if, in connection with the security, the issuer has given the subscriber a notice in accordance with sections 37AE and 37AF and the subscriber has not objected to the making of a relief order in the manner referred to in section 37AE(2)(g) and (h).

(5) If an issuer applies, in connection with a security, to the court for the court's approval for the purposes of section 37AE(4), the issuer must, as soon as practicable, serve notice of that application on the following persons:

• (a) the FMA:

• (b) in the case of a participatory security, the statutory supervisor (if any):

• (c) in the case of a debt security, the trustee (if any):

• (ca) in the case of an interest in a KiwiSaver scheme other than a restricted scheme, the KiwiSaver trustee:

• (d) in the case of a unit in a unit trust, the unit trustee (if any):

• (e) any other person that the court orders must be served with notice of the application.

(6) Despite subsections (1) to (5), the court may, if it thinks fit, order that notice of an application does not have to be served on a person or a class of persons.

(7) If a person has been served, or should have been served, with notice of an application—

• (a) in accordance with subsections (1) to (3), the person may appear and be heard on the application and on any related matter, in person or by a barrister or solicitor, in the court:

• (b) in accordance with subsection (5), the person may appear and be heard in relation to the matters referred to in section 37AE(5), in person or by a barrister or solicitor, in the court.

(8) A person has the right to adduce evidence and the right to cross-examine witnesses if the person appears under this section, unless the proceedings are by way of appeal.

(9) The rights referred to in this section apply whether or not the person was a party to the proceedings at any earlier stage in the proceedings.

(10) This section does not limit the rights of any person, under any other enactment or rule of law, to appear and be heard or to adduce evidence.

(1) This section applies—

• (a) to all proceedings commenced after this section comes into force that relate to an allotment of a security made in contravention of section 37; and

• (b) to all proceedings that have not been finally disposed of by the court of first instance before this section comes into force that relate to an allotment of a security made in contravention of section 37.

(2) The court must not, in respect of an allotment of a security made in contravention of section 37, make any order or declaration, including an order or declaration in respect of moneys payable, relief, validation, restitution, compensation, variation of a contract, or relief of a contract in whole or part or for any particular purpose, other than any of the following orders:

• (a) any order in accordance with any of the provisions of sections 37AA to 37AK, this section, and sections 37B to 37G:

• (b) any order or direction in relation to a matter of procedure:

• (c) any order as to costs:

• (d) any order to require the repayment of any subscriptions or interest under section 37(5) or (6):

• (e) any order in relation to proceedings under section 59:

• (f) any order in relation to proceedings under section 60(2).

(3) This section does not limit—

• (a) the right of a person to discontinue any proceedings; or

• (b) the right of a person to commence proceedings in accordance with any of the provisions of sections 37AA to 37AK, this section, and sections 37B to 37G.

(4) Subsection (5) applies if—

• (a) proceedings have been commenced to require the repayment of subscriptions or interest under section 37(5) or (6) in relation to the allotment of a security; and

• (b) an application has been made for a relief order in relation to the security under 1 or more of the following provisions:

  • (i) section 37AC:

  • (ii) section 37AH:

  • (iii) section 37AI.

(5) The court must, on the application of the issuer, order that the proceedings to require the repayment of subscriptions or interest under section 37(5) or (6) be stayed until after the determination of the application, or applications, for a relief order unless the application, or applications, for a relief order—

• (a) is, or are, frivolous or vexatious; or

• (b) is, or are, an abuse of the process of the court.

(6) Nothing in this section applies to an appeal against a final judgment given or made before this section comes into force.

(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 instrument that amends that prospectus that is registered under section 43 before the time of allotment; or

  • (ii) the FMA 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), 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), 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), 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) 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); 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), prescribed period means—

• (a) a period of 1 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).

(6) Where an allotment made in contravention of this section is avoided by the subscriber under subsection (3), 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 1 month after the date of the receipt by the issuer of notice under subsection (3), 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) [Repealed]

(1) The issuer of a security may make an application to the court for a relief order under section 37C or section 37D in respect of the application of section 37A to the allotment of a security if the subscriber has given notice to the issuer under section 37A(3).

(2) However, an application to the court for a relief order in respect of the application of section 37A to the allotment of a security may not be made if the subscription for the security has been repaid to the subscriber under section 37A(6) or (7).

(3) If a relief order in respect of the application of section 37A to the allotment of a security is made,—

• (a) the notice given under section 37A(3) does not affect the validity of the allotment of the security; and

• (b) section 37A(6) and (7) does not apply to the allotment of the security.

(4) An application to the court may be made in connection with 1 or more subscribers.

(1) The court may in the course of any proceedings, or on the application of the issuer under this section, make a relief order in respect of the application of section 37A to the allotment of a security if the court considers that it is just and equitable to do so.

(2) An order may be made under this section regardless of whether the contravention of section 37A occurred before or after this section comes into force.

(3) In determining whether to make a relief order under this section, the court must have regard to—

• (a) all of the circumstances relating to the allotment of the security; and

• (b) the nature and seriousness of the contravention of section 37A; and

• (c) whether the contravention has materially prejudiced the interests of the subscriber; and

• (d) whether the subscriber has disposed of the security to any other person; and

• (e) any other matters that the court thinks fit.

(4) An application under this section may be made in conjunction with an application under section 37D.

(1) This section applies to a contravention of section 37A in connection with the allotment of a security if that contravention is caused solely by a failure to comply, before this section comes into force, with the condition in clause 6 of the Securities Act (Great Britain Collective Investment Schemes) Exemption Notice 1999 (SR 1999/420).

(2) The court must, on the application of the issuer, make a relief order in respect of the application of section 37A to the allotment of the security if the contravention has not materially prejudiced the interests of the subscriber.

(3) If the contravention has materially prejudiced the interests of the subscriber, the court may make a relief order in respect of the application of section 37A to the allotment of the security if the court considers that it is just and equitable to do so having regard to—

• (a) whether the subscriber has disposed of the security to any other person; and

• (b) any other matters that the court thinks fit.

(4) An application under this section may be made in conjunction with an application under section 37C.

If the court makes a relief order under section 37C or section 37D, the court may—

• (a) make the relief order subject to any terms and conditions that it thinks fit if the contravention of section 37A has materially prejudiced the interests of the subscriber; and

• (b) in respect of a security, order the issuer to pay compensation to—

  • (i) the subscriber for any loss or damage suffered by the subscriber that is caused by the contravention of section 37A; and

  • (ii) any person who has, at any time, been a security holder in relation to the security for any loss or damage suffered by the person that is caused by the contravention of section 37A; and

• (c) grant any mandatory, restrictive, or prohibitory injunction that the court thinks fit; and

• (d) make an order for any consequential relief that the court thinks fit, unless the court makes the relief order under section 37D.

(1) If an application for an order is made under section 37C or section 37D in connection with a security, the applicant must, as soon as practicable, serve notice of the application on the following persons:

• (a) the subscriber or a representative defendant appointed by the court:

• (b) the security holder (being the person who would be the current security holder but for the application of section 37A(3)) or a representative defendant appointed by the court:

• (c) the FMA:

• (d) in the case of a participatory security, the statutory supervisor (if any):

• (e) in the case of a debt security, the trustee (if any):

• (ea) in the case of an interest in a KiwiSaver scheme other than a restricted scheme, the KiwiSaver trustee:

• (f) in the case of a unit in a unit trust, the unit trustee (if any):

• (g) any other person that the court orders must be served with notice of the application.

(2) Despite subsection (1), the court may, if it thinks fit, order that notice of an application does not have to be served on a person or a class of persons.

(3) If a person has been served, or should have been served, with notice of an application, the person may appear and be heard on the application and on any related matter, in person or by a barrister or solicitor, in the court.

(4) A person has the right to adduce evidence and the right to cross-examine witnesses if the person appears under this section, unless the proceedings are by way of appeal.

(5) The rights referred to in this section apply whether or not the person was a party to the proceedings at any earlier stage in the proceedings.

(6) This section does not limit the rights of any person, under any other enactment or rule of law, to appear and be heard or to adduce evidence.

(1) This section applies—

• (a) to all proceedings commenced after this section comes into force that relate to an allotment of a security made in contravention of section 37A; and

• (b) to all proceedings that have not been finally disposed of by the court of first instance before this section comes into force that relate to an allotment of a security made in contravention of section 37A.

(2) The court must not, in respect of an allotment of a security made in contravention of section 37A, make any order or declaration, including an order or declaration in respect of moneys payable, relief, validation, restitution, compensation, variation of a contract, or relief of a contract in whole or part or for any particular purpose, other than any of the following orders:

• (a) any order in accordance with any of the provisions of sections 37AA to 37AL, sections 37B to 37F, and this section:

• (b) any order or direction in relation to a matter of procedure:

• (c) any order as to costs:

• (d) any order to require the repayment of any subscriptions or interest under section 37A(6) or (7):

• (e) any order in relation to proceedings under section 59:

• (f) any order in relation to proceedings under section 60(2).

(3) This section does not limit—

• (a) the right of a person to discontinue any proceedings; or

• (b) the right of a person to commence proceedings in accordance with any of the provisions of sections 37AA to 37AL, sections 37B to 37F, and this section.

(4) Subsection (5) applies if—

• (a) proceedings have been commenced to require the repayment of subscriptions or interest under section 37A(6) or (7) in relation to the allotment of a security; and

• (b) an application has been made for a relief order under section 37C or section 37D (or both of them) in relation to the security.

(5) The court must, on the application of the issuer, order that the proceedings to require the repayment of subscriptions or interest under section 37A(6) or (7) be stayed until after the determination of the application, or applications, for a relief order unless the application, or applications, for a relief order—

• (a) is, or are, frivolous or vexatious; or

• (b) is, or are, an abuse of the process of the court.

(6) Nothing in this section applies to an appeal against a final judgment given or made before this section comes into force.

In this Act, the term authorised advertisement means,—

• (a) in relation to an offer of securities to the public in respect of which an investment statement is required, an advertisement—

  • (i) that is an investment statement that relates to the securities and that complies with this Act and regulations; or

  • (ii) that refers to an investment statement that relates to the securities referred to in the advertisement and that complies with this Act and regulations:

• (b) in relation to an offer of securities to the public in respect of which an investment statement is not required, but in respect of which a registered prospectus or a disclosure statement under section 81 of the Reserve Bank of New Zealand Act 1989 is required, an advertisement—

  • (i) that refers to a registered prospectus or a current disclosure statement; and

  • (ii) that describes where a copy of the prospectus or the disclosure statement can be obtained free of charge; and

  • (iii) that complies with this Act and regulations:

• (c) in any other case, an advertisement that complies with this Act and regulations.

No advertisement shall contain a statement purporting to be made by an expert unless—

• (a) the expert has given and has not, before distribution of the advertisement, withdrawn his or her written consent to the distribution of the advertisement with the statement included in the form and context in which it is included; and

• (b) a statement of the expert's qualifications appears in the advertisement; and

• (c) if the expert is, or is intended to be, an officer, director, or employee of, or professional adviser to, the issuer of the securities referred to in the advertisement, a statement appears in the advertisement to that effect.

(1) Where, at any time, the FMA is of the opinion that an advertisement—

• (a) is likely to deceive, mislead, or confuse with regard to any particular that is material to the offer of securities to which it relates; or

• (b) is inconsistent with any registered prospectus referred to in it; or

• (c) does not comply with this Act and regulations,—

the FMA may make an order prohibiting the distribution of that advertisement or any advertisement which relates to the offer of securities.

(2) Without limiting subsection (1), where, at any time, the FMA is of the opinion that an advertisement that contains or refers to an offer of debt securities the issuer of which is a registered bank is inconsistent with the most recent disclosure statement published by the registered bank under section 81 of the Reserve Bank of New Zealand Act 1989, the FMA may make an order prohibiting the distribution of that advertisement or any advertisement which relates to the offer of securities.

(3) An order may be made on such terms and conditions as the FMA thinks fit.

(4) Where the FMA makes an order under this section,—

• (a) it shall forthwith notify the issuer of the securities that the order has been made and the reasons for making it; and

• (b) it may notify any other person that the order has been made and the reasons for making it.

(5) Every person who contravenes an order made under this section commits an offence and is liable on conviction to a fine not exceeding $5,000.

(6) It is a defence to a charge under subsection (5) if the defendant proves that the advertisement was distributed—

• (a) without the defendant's knowledge; or

• (b) without the defendant's knowledge of the order.

(7) The FMA must, after an order has been made under this section, give the issuer or the issuer's representative an opportunity to make written submissions and to be heard on the matter.

(8) The FMA, if it is satisfied that the order should not continue in force, may revoke the order.

(9) In this section, the term advertisement does not include an investment statement.

In this Act, the term investment statement means a written document that—

• (a) contains or refers to 1 or more offers of securities to the public for subscription; and

• (b) states that it is an investment statement for the purposes of this Act.

The purpose of an investment statement is to—

• (a) provide certain key information that is likely to assist a prudent but non-expert person to decide whether or not to subscribe for securities; and

• (b) bring to the attention of such a person the fact that other important information about the securities is available to that person in other documents.

(1) Every investment statement shall—

• (a) be in writing; and

• (b) state, in a prominent place, the date as at which the investment statement is prepared; and

• (c) if a registered prospectus is required in respect of the securities referred to in the investment statement, state that there is a registered prospectus containing an offer of securities to which the investment statement relates; and

• (d) contain all information, statements, and other matters that it is required to contain by regulations.

(2) An investment statement may relate to any or all of the following:

• (a) 1 or more kinds of securities:

• (b) 1 or more offers of or subscriptions for securities of a particular kind.

(3) Unless this Act or regulations provide otherwise, nothing in this Act or in regulations limits the information, statements, or other matters that may be contained in an investment statement.

(1) Every prospectus and registered prospectus shall—

• (a) be in writing and be dated; and

• (b) specify any documents required by section 41 to be endorsed on or attached to the prospectus or registered prospectus for the purposes of that section; and

• (c) contain all information, statements, certificates, and other matters that it is required to contain by regulations made under this Act.

(2) A prospectus or registered prospectus may form part of, or be combined with, any annual report or other document that is required by any enactment; and, in any such case, the provisions of this Act and of all regulations made under this Act shall apply to that annual report or other document.

(3) Unless this Act or regulations provide otherwise, nothing in this Act or in regulations made under this Act limits the information, statements, certificates, or other matters that may be contained in a prospectus or registered prospectus.

(1) No prospectus delivered to the Registrar for registration under this Act, and no registered prospectus, shall contain a statement purporting to be made by an expert unless—

• (a) the expert has given and has not, before delivery of a copy of the prospectus for registration in accordance with section 41, withdrawn his or her written consent to the distribution of the prospectus with the statement included in the form and context in which it is included; and

• (b) a statement that the expert has given and has not withdrawn his or her consent as aforesaid appears in the prospectus or registered prospectus; and

• (c) a statement of the expert's qualifications appears in the prospectus or registered prospectus; and

• (d) a statement which appears in the prospectus or registered prospectus states whether or not the expert is or is intended to be a director, officer, or employee of, or professional adviser to, the issuer of the prospectus; and

• (e) if the statement by the expert was made more than 4 months before the date of delivery of the prospectus for registration in accordance with section 41, a supplementary statement on the same matter made by the same or another expert less than 4 months before that date appears in the prospectus and registered prospectus.

(2) Where under subsection (1)(e), a supplementary statement by an expert is required to appear in a prospectus or registered prospectus—

• (a) the supplementary statement shall specifically affirm, deny, or qualify all assertions of fact contained in the original statement; and

• (b) if in the opinion of the expert making the supplementary statement, any opinions expressed in the original statement require further comment because of any such denial or qualification of any assertions of fact, or for any other reason, the supplementary statement shall contain such comments.

(1) Every prospectus delivered to the Registrar for registration under this Act shall—

• (a) have endorsed thereon or attached thereto—

  • (i) any consent to the issue thereof required by section 40 from any person as an expert; and

  • (ii) all documents, information, certificates, and other matters required to be endorsed thereon or attached thereto for the purposes of this section by regulations made under this Act; and

• (b) be signed by—

  • (i) the issuer of the prospectus (if an individual) and every person who is a director of the issuer at the time the prospectus is delivered to the Registrar, or by its or his or her agent authorised in writing; and

  • (ii) every promoter of the securities to which the prospectus relates, or by its or his or her agent authorised in writing.

(2) The prescribed information and documents (if any) must be supplied to the Registrar, when the prospectus is delivered to the Registrar for registration, in the manner specified by the Registrar.

(1) The Registrar must promptly register every prospectus delivered to him or her.

(2) However, the Registrar must refuse to register a prospectus if,—

• (a) in his or her opinion,—

  • (i) it does not comply with section 39(1)(a) or 41(1)(b); or

  • (ii) it contains any material matter that is not clearly legible; or

  • (iii) section 41(2) is not complied with; or

• (b) the prescribed amount payable on registration is not paid; or

• (c) the date of registration would be earlier than the date of the prospectus.

(3) The Registrar must, on the registration of a prospectus under this section, give a certificate of the registration (and the certificate is conclusive evidence that the prospectus has been registered under this section).

(4) The certificate must specify a registration number for the prospectus.

(1) A registered prospectus may be amended by an instrument to amend the prospectus that is delivered to the Registrar and registered under this section.

(2) The prescribed information and documents (if any) must be supplied to the Registrar, when an instrument to amend the prospectus is delivered to the Registrar for registration, in the manner specified by the Registrar.

(3) Every instrument to amend a registered prospectus that is delivered to the Registrar must be—

• (a) signed by the issuer of the prospectus (if an individual) and every person who is a director of the issuer at the time the instrument is delivered to the Registrar, or by the issuer's or director's agent authorised in writing; and

• (b) accompanied by a copy of the registered prospectus as amended.

(4) The Registrar must promptly register every instrument delivered to him or her in accordance with this section.

(5) However, the Registrar must refuse to register an instrument under this section if,—

• (a) in his or her opinion,—

  • (i) he or she could, under section 42(2), have refused to register the registered prospectus as amended if it had been delivered for registration at the time of the delivery to him or her of the instrument; or

  • (ii) subsection (2) or (3) is not complied with; or

• (b) the prescribed amount payable on registration is not paid; or

• (c) the date of the registered prospectus is altered.

(6) The Registrar must, on the registration of an instrument of amendment under this section, give a certificate of that registration (and the certificate is conclusive evidence that the instrument has been registered under this section).

It is not the function of the Registrar, when acting under section 42 or 43, to consider whether a prospectus—

• (a) complies with section 39(1)(b) or (c), 40, or 41(1)(a); or

• (b) contains a statement that is false or misleading as to a material particular or omits any material particular.

(1) If a prospectus, or an instrument to amend a prospectus, is registered under section 42 or 43, the issuer must, within 5 working days after it receives the certificate of the registration, ensure that an Internet site maintained by or on behalf of the issuer—

• (a) contains a reasonably prominent statement—

  • (i) to the effect that the prospectus or instrument has been registered; and

  • (ii) describing where a copy of the prospectus or instrument can be obtained; or

• (b) contains a reasonably prominent link to such a statement.

(2) The statement or link referred to in subsection (1) may be removed from the Internet site maintained by or on behalf of the issuer if the period within which allotments of securities may be made under the prospectus in accordance with this Act has finally ended (for example, as a result of section 37A(1)(c)).

(3) If a prospectus, or an instrument to amend a prospectus, is registered under section 42 or 43, the Registrar may, in any manner that the Registrar thinks fit, give notice of the registration to any person or class of persons or to the public generally.

(4) The Registrar may, in any manner that the Registrar thinks fit, give notice to any person or class of persons or to the public generally of any changes in the information referred to in section 43P in respect of a registered prospectus.

(1) The Registrar must, immediately after a prospectus or an instrument to amend a prospectus is registered under this Act, notify the FMA of the registration for the purpose of allowing the FMA an opportunity to consider whether the prospectus, or the prospectus as amended,—

• (a) complies with this Act and the regulations; or

• (b) contains any material misdescription or error or any material matter that is not clearly legible; or

• (c) is false or misleading as to a material particular or omits any material particular (whether or not it was so false or misleading, or the omission was material, at the time the prospectus or instrument was registered).

(2) The Registrar must, immediately after a trust deed, a deed of participation, or an instrument to amend a deed of that kind is registered under this Act, notify the FMA of the registration for the purpose of allowing the FMA an opportunity to consider whether the trust deed or deed of participation, or the trust deed or deed of participation as amended,—

• (a) complies with this Act and the regulations; or

• (b) contains any material misdescription or error or any material matter that is not clearly legible.

(3) The nature and extent of the consideration (if any) that the FMA gives to a prospectus, trust deed, or deed of participation or an instrument to amend a prospectus or deed is at the FMA's discretion.

(4) Nothing in this section or any other provision of this Act limits the FMA's power to consider or reconsider at any time whether—

• (a) a registered prospectus—

  • (i) complies with this Act and the regulations; or

  • (ii) contains any material misdescription or error or any material matter that is not clearly legible; or

  • (iii) is false or misleading as to a material particular or omits any material particular (whether or not it was so false or misleading, or the omission was material, at the time the prospectus or instrument was registered):

• (b) a trust deed or deed of participation—

  • (i) complies with this Act and the regulations; or

  • (ii) contains any material misdescription or error or any material matter that is not clearly legible.

(1) No allotment of securities offered to the public for subscription may be made, and no applications for those securities or subscriptions for those securities may be accepted, during the period—

• (a) starting on the date that the prospectus relating to the offer of the securities is registered; and

• (b) ending on the close of—

  • (i) the date that is 5 working days after that date; or

  • (ii) a later date specified by the FMA by notice to the issuer.

(2) However,—

• (a) if the prospectus is a continuous issue prospectus, subsection (1) applies to the prospectus only if it is of a class that is prescribed by the FMA in a notice under section 43EA:

• (b) if subsection (1) applies to a prospectus that relates to particular securities but another registered prospectus also relates to those securities, subsection (1) does not prevent—

  • (i) an offer and allotment of those securities being made in accordance with this Act in reliance upon the other registered prospectus; and

  • (ii) applications for those securities and subscriptions for those securities from being accepted in respect of the offer and allotment referred to in subparagraph (i).

(3) In subsection (2) and section 43EA, a prospectus is a continuous issue prospectus if it—

• (a) relates to securities that the issuer, in the ordinary course of its business, continuously offers to the public for subscription; and

• (b) is not the first prospectus to be registered in respect of that class of securities.

(4) The later date specified under subsection (1)(b)(ii) must be no more than 10 working days after the prospectus is registered.

(5) If a person contravenes subsection (1), section 37(1B) and (4) to (7) apply (which provide that an allotment of a security in contravention of subsection (1) is invalid and of no effect).

(1) This section applies if the FMA is satisfied that—

• (a) its consideration of a prospectus is complete; or

• (b) consideration or further consideration of a prospectus is, in the circumstances, unnecessary.

(2) The FMA may give notice to the issuer that—

• (a) the period that applies under section 43D ends at a particular time specified by the FMA (being an earlier time than that provided for under section 43D); or

• (b) section 43D(1) does not apply in respect of the prospectus.

(3) Section 43D is subject to this section.

(4) Nothing in this section limits section 70B (which also allows the FMA to grant exemptions in respect of compliance with section 43D).

(1) The FMA may issue a notice that prescribes the class or classes of continuous issue prospectuses to which section 43D(1) applies.

(2) The FMA must, before issuing a notice under subsection (1) in respect of a class of continuous issue prospectuses, be satisfied that it is in the public interest for the FMA to have an opportunity to act under section 43C(1) in respect of those prospectuses before the allotment of securities in reliance upon those prospectuses (for example, where in the circumstances a particular risk relates to a particular class of issuers or securities).

(3) A notice issued by the FMA—

• (a) is a legislative instrument and a disallowable instrument for the purposes of the Legislation Act 2012; and

• (b) must be presented to the House of Representatives under section 41 of that Act.

(4) The FMA may vary or revoke a notice issued under this section, and subsections (2) and (3) apply, with necessary modifications, in all respects to the variation or revocation.

(1) The FMA may, at any time, make an order prohibiting the distribution of an investment statement if the FMA is of the opinion that the investment statement—

• (a) is likely to deceive, mislead, or confuse with regard to any particular that is material to the offer of securities to which it relates; or

• (b) is inconsistent with any registered prospectus referred to in it; or

• (c) does not comply with this Act or the regulations.

(2) If an order is made under subsection (1) in respect of an investment statement,—

• (a) no allotment may be made of any securities subscribed for whether before or after the order is made (being securities to which the investment statement relates):

• (b) all subscriptions received for securities to which the investment statement relates, not being subscriptions for securities that were allotted before the order is made or subscriptions received after the order is revoked, must be immediately repaid to the subscribers.

(3) An allotment made in contravention of subsection (2)(a) is invalid and of no effect.

(1) This section applies if, at any time, the FMA is of the opinion that—

• (a) a registered prospectus does not comply with this Act or the regulations; or

• (b) a registered prospectus contains any material misdescription or error or any material matter that is not clearly legible; or

• (c) a registered prospectus is false or misleading as to a material particular or omits any material particular (whether or not it was so false or misleading, or the omission was material, at the time the prospectus was registered); or

• (d) section 41 has not been complied with in respect of a registered prospectus; or

• (e) a trust deed or deed of participation in respect of the securities offered in a registered prospectus—

  • (i) does not comply with this Act or the regulations; or

  • (ii) contains any material misdescription or error or any material matter that is not clearly legible.

(2) The FMA may exercise either or both of the following powers in respect of the registered prospectus if it considers that it is desirable in the public interest:

• (a) make an order prohibiting the allotment of securities under the registered prospectus for a period not exceeding 18 months:

• (b) cancel the registration of the registered prospectus (with effect from the time that the Registrar is notified of the cancellation).

(3) If an order is made under subsection (2)(a) in respect of a registered prospectus,—

• (a) during the period in which the order is in force, no allotment may be made of any securities subscribed for whether before or after the order is made (being securities to which the prospectus relates); and

• (b) all subscriptions received for securities to which the prospectus relates, not being subscriptions for securities that were allotted before the order is made or subscriptions received after the order ceases to be in force, must be immediately repaid to the subscribers.

(4) If the registration of a registered prospectus is cancelled,—

• (a) no allotment may be made of any securities subscribed for whether before or after the cancellation (being securities to which the prospectus relates); and

• (b) all subscriptions received for securities to which the prospectus relates, not being subscriptions for securities that were allotted before the cancellation, must be immediately repaid to the subscribers.

(5) An allotment made in contravention of subsection (3)(a) or (4)(a) is invalid and of no effect.

(1) If any subscriptions that are required under section 43F or 43G to be repaid to the subscribers entitled to those subscriptions are not repaid within 1 month after the relevant date, the issuer and all the directors of the issuer are jointly and severally liable to repay the subscriptions with interest at the prescribed rate from the date the subscriptions were received by or on behalf of the issuer.

(2) A director of an issuer is not liable to repay any subscriptions and interest on the subscriptions under subsection (1) if the director proves that the default in the repayment of the subscriptions was not due to any misconduct or negligence on his or her part.

(3) In this section, relevant date means,—

• (a) in the case of subscriptions received before the order is made under section 43F or 43G or before the registration of the prospectus is cancelled, the date that the order is made or the registration is cancelled; or

• (b) in any other case, the date that the subscriptions are received by or on behalf of the issuer.

(1) The FMA may make an order under section 43F or 43G on the terms and conditions that the FMA thinks fit.

(2) The FMA may vary an order under section 43F or 43G in the same way as it may make the order.

(3) The FMA may, either of its own volition or on the application of the person concerned, revoke an order under section 43F or 43G, on the terms and conditions it thinks fit, if it is satisfied that it should not continue in force.

(4) No allotment may be made of a security—

• (a) to which an investment statement relates in contravention of the terms or conditions of an order under section 43F or of the revocation of an order made under that section; or

• (b) that is offered under a prospectus to which an order under section 43G has been made in contravention of the terms or conditions of the order or of the revocation of the order.

(5) If a person contravenes subsection (4), section 37(1B) and (4) to (7) apply (which provide that an allotment of a security in contravention of that subsection is invalid and of no effect).

(1) The FMA may exercise a power under section 43F, 43G, or 43I(2) or (3) only if—

• (a) the FMA gives the issuer at least 5 working days' written notice of the following matters before the FMA exercises the power:

  • (i) that the FMA may make an order under section 43F or 43G, vary or revoke an order under section 43I(2) or (3), or cancel the registration of the prospectus under section 43G (as the case may be); and

  • (ii) the reasons why it is considering exercising that power; and

• (b) the FMA gives the issuer or the issuer's representative an opportunity to make written submissions and to be heard on the matter within that notice period.

(2) If the FMA exercises a power under section 43F or 43G,—

• (a) it must, immediately after exercising the power, notify the issuer of—

  • (i) the reasons for making the order or for the cancellation; and

  • (ii) the terms and conditions of the order (if any); and

• (b) it must, immediately after exercising the power, give notice to the Registrar and on its Internet site of—

  • (i) the reasons for making the order or for the cancellation; and

  • (ii) the terms and conditions of the order (if any); and

  • (iii) any other information the FMA thinks relevant in the circumstances; and