(1) This Act may be cited as the Securities Act 1978.
(2) The provisions of this Act shall come into force on a date to be fixed by the Governor-General by Order in Council. For the purposes of this subsection, 1 or more Orders in Council may be made bringing different provisions of this Act into force on different dates.
Section 1(2): sections 1, 2, 5(5), Part 1, sections 48(3), (4), 70, 72, and 76 brought into force, on 1 May 1979, by the Securities Act Commencement Order 1979 (SR 1979/94).
Section 1(2): the provisions of this Act not already in force on 4 July 1983, including, in particular, sections 3, 4, 5(1)–(4), 6–8, 33–47, 48(1), (2), (5), 49–69, 71, and 73–75, and the schedules brought into force, on 1 September 1983, by the Securities Act Commencement Order 1983 (SR 1983/119).

2 Interpretation

(1) In this Act, unless the context otherwise requires,—
advertisement has the meaning set out in section 2A
allot includes sell, issue, assign, and convey; and allotment has a corresponding meaning
associated persons or persons associated with each other are—
- (a) persons who are relatives within the meaning of the Income Tax Act 2007; or
- (b) persons who are partners to whom the Partnership Act 1908 applies; or
- (c) bodies corporate that consist substantially of the same members or shareholders or that are under the control of the same persons; or
- (d) a body corporate and a person who has the power, directly or indirectly, to exercise, or control the exercise of, the rights to vote attached to 25% or more of the voting securities of the body corporate; or
- (e) a body corporate and a person who is a director of the body corporate
authorised advertisement has the meaning assigned to it by section 38 or section 38AA
bonus bond means a unit in an approved unit trust within the meaning of section 3(1) of the Finance Act (No 2) 1990
building society has the same meaning as in section 2(1) of the Building Societies Act 1965
chattel includes livestock and emissions units, but does not include a book debt or negotiable instrument
civil liability event has the meaning set out in section 55B
company means a company, or an overseas company, within the meaning of section 2(1) of the Companies Act 1993
contributory mortgage means a mortgage of land that—
- (a) secures money owing to 2 or more persons or to a nominee on behalf of 2 or more persons, whether or not the mortgage originally secured money owing to only 1 person; or
- (b) has the same priority in respect of the land as another mortgage or mortgages of that land;—
and, for the purposes of this definition, money owing to not more than 5 persons as joint tenants shall be deemed to be owed to 1 person
contributory mortgage broker means a person (not being a mortgagor under the mortgage or any other person to whom or for whose benefit any money is lent in consideration for the mortgage given by the mortgagor) who—
- (a) offers an interest in a contributory mortgage to the public for subscription; or
- (b) manages interests in a contributory mortgage, being interests that have been offered to the public for subscription, whether or not that person holds beneficially any interest in that mortgage
contributory scheme means any scheme or arrangement that, in substance and irrespective of the form thereof, involves the investment of money in such circumstances that—
- (a) the investor acquires or may acquire an interest in or right in respect of property; and
- (b) pursuant to the terms of investment that interest or right will or may be used or exercised in conjunction with any other interest in or right in respect of property acquired in like circumstances, whether at the same time or not;—
but does not include such a scheme or arrangement if the number of investors therein does not exceed 5, and neither a manager of the scheme nor any associated person is a manager of any other such scheme or arrangement
convertible note has the same meaning as in section YA 1 of the Income Tax Act 2007
co-operative company means—
- (a) a company registered as a co-operative company under the Co-operative Companies Act 1956 or the Co-operative Companies Act 1996; or
- (b) a company registered as a co-operative dairy company under the Co-operative Dairy Companies Act 1949 or Part 3 of the Co-operative Companies Act 1996; or
- (c) a company registered as a co-operative freezing company under the Co-operative Freezing Companies Act 1960; or
- (d) a company registered as a co-operative forestry company under the Co-operative Forestry Companies Act 1978
court means, in relation to any matter, the court before which the matter is to be determined
the Crown includes a government department
date of a prospectus means the date specified on a prospectus pursuant to section 39(1)(a)
date of a registered prospectus means the date specified on a registered prospectus pursuant to section 39(1)(a)
date of a statement of financial position or date of an interim statement of financial position means the date as at which the statement of affairs contained in the statement of financial position or interim statement of financial position has been drawn up
debt security means any interest in or right to be paid money that is, or is to be, deposited with, lent to, or otherwise owing by, any person (whether or not the interest or right is secured by a charge over any property); and includes—
- (a) a debenture, debenture stock, bond, note, certificate of deposit, and convertible note; and
- (b) an interest or right that is declared by regulations to be a debt security for the purposes of this Act; and
- (c) a renewal or variation of the terms or conditions of any such interest or right or of a security referred to in paragraph (a) or paragraph (b);—
but does not include—
- (d) an interest in a contributory mortgage where the interest is offered by a contributory mortgage broker; or
- (e) any such interest or right or a security referred to in paragraph (a) or paragraph (c) that is declared by regulations not to be a debt security for the purposes of this Act
delayed allotment order means an order made by the FMA under section 44A(2) or (3) that delays the date of allotment of a security that is offered in a simplified disclosure prospectus
director means—
- (a) in relation to a company, any person occupying the position of a director of the company by whatever name called:
- (b) in relation to a partnership (other than a special partnership or limited partnership), any partner:
- (c) in relation to a special partnership or limited partnership, any general partner:
- (d) in relation to a body corporate or unincorporate, other than a company, partnership, or special partnership or limited partnership, any person occupying a position in the body that is comparable with that of a director of a company:
- (e) in relation to any other person, that person
disclosure obligation means—
- (a) the requirements of the continuous disclosure provisions as defined in section 19D of the Securities Markets Act 1988; and
- (b) any obligation that—
  - (i) requires ongoing disclosure of information to the public or to a person who has a role in monitoring the person who disclosed the information; and
  - (ii) is imposed by an enactment; and
  - (iii) is specified in the regulations
distribute includes—
- (a) make available, publish, and circulate; and
- (b) communicate by letter, newspaper, broadcasting, sound recording, television, cinematographic film, video, or any form of electronic or other means of communication
document means any record of information; and includes—
- (a) anything on which there is writing or any image; and
- (b) information recorded by means of any article or device (for example, a disk) from which information is capable of being reproduced with or without the aid of any other article or device; and
- (c) material subsequently derived from information recorded by that means
emissions units means—
- (a) units as defined in section 4(1) of the Climate Change Response Act 2002; and
- (b) personal property that—
  - (i) is created by, or in accordance with, any enactment (whether of New Zealand, another country, or any jurisdiction of any country), rule of law, contractual provision, or international treaty or protocol as—
    (A) one of a fixed number of units issued by reference to a specified amount of greenhouse gas; or
    (B) evidence of a specified amount of reductions, removals, avoidance, storage, sequestration, or any other form of mitigation of greenhouse gas emissions; and
  - (ii) can be surrendered, retired, cancelled, or otherwise used to—
    (A) offset greenhouse gas emissions under, or otherwise comply with, any enactment (whether of New Zealand, another country, or any jurisdiction of any country), rule of law, contractual provision, or international treaty or protocol; or
    (B) enable a person who surrenders, retires, cancels, or otherwise uses it to claim an environmental benefit
equity security means any interest in or right to a share in, or in the share capital of, a company; and includes—
- (a) a preference share, and company stock; and
- (b) a security that is declared by regulations to be an equity security for the purposes of this Act; and
- (c) a renewal or variation of the terms or conditions of any such interest or right or a security referred to in paragraph (a) or paragraph (b);—
but does not include any such interest or right or a security referred to in paragraph (a) or paragraph (c) that is declared by regulations not to be an equity security for the purposes of this Act
expert means any person who holds himself or herself out to be of a profession or calling that gives authority to a statement made by him or her; but does not include a person acting in his or her capacity as an auditor or as a director or officer of a body
FMA means the Financial Markets Authority established under Part 2 of the Financial Markets Authority Act 2011
government department includes—
- (a) the Māori Trustee; and
- (b) Public Trust, but in relation only to money constituted in the common fund of Public Trust that is entitled to the protection against deficiency afforded by section 52 of the Public Trust Act 2001
greenhouse gas has the meaning set out in section 31 of the Climate Change Response Act 2002
interest in a superannuation scheme means an interest or right to participate in any capital, assets, earnings, or other property of a superannuation scheme; and includes—
- (a) any interest or right that is declared by regulations to be an interest in a superannuation scheme for the purposes of this Act; and
- (b) any renewal or variation of the terms or conditions of any such interest or right or a security referred to in paragraph (a);—
but does not include any such interest or right, or a security referred to in paragraph (b), that is declared by regulations not to be an interest in a superannuation scheme for the purposes of this Act
investment statement has the meaning set out in section 38C
issuer means,—
- (a) in relation to an equity security or a debt security, or to an advertisement, investment statement, prospectus, or registered prospectus that relates to an equity security or a debt security, or to a trust deed that relates to a debt security, the person on whose behalf any money paid in consideration of the allotment of the security is received:
- (b) in relation to a participatory security, or to an advertisement, investment statement, prospectus, or registered prospectus, or to a deed of participation that relates to a participatory security, the manager:
- (c) in relation to an interest in a contributory mortgage offered by a contributory mortgage broker, or to an advertisement that relates to such an interest, the contributory mortgage broker:
- (d) in relation to a unit in a unit trust, or to an advertisement, investment statement, prospectus, or registered prospectus that relates to such a unit, the manager:
- (e) in relation to a life insurance policy, or to an advertisement, investment statement, prospectus, or registered prospectus that relates to a life insurance policy, the life insurance company that is liable under the policy:
- (f) in relation to an interest in a superannuation scheme (including a restricted KiwiSaver scheme but not any other KiwiSaver scheme), or to an advertisement, investment statement, prospectus, or registered prospectus that relates to such an interest, the superannuation trustee of the scheme:
- (g) in relation to an interest in a KiwiSaver scheme other than a restricted KiwiSaver scheme, or to an advertisement, investment statement, prospectus, or registered prospectus that relates to such an interest, the manager of the scheme
KiwiSaver scheme has the same meaning as in section 4(1) of the KiwiSaver Act 2006
KiwiSaver trustee means a person who is designated or appointed as trustee of a KiwiSaver scheme other than a restricted scheme, or the successor of that person
life insurance company means any person or association of persons, whether incorporated or unincorporated, which, in the course of business issues, or is liable under, life insurance policies
life insurance policy means a policy of life or endowment insurance, or a policy securing an annuity; and includes—
- (a) a policy of insurance that is declared by regulations to be a life insurance policy for the purposes of this Act; and
- (b) a renewal or variation of the terms or conditions of any such policy or a security referred to in paragraph (a);—
but does not include any such policy, or a security referred to in paragraph (b), or a term life insurance policy (within the meaning of regulations) that is declared by regulations not to be a life insurance policy for the purposes of this Act
local authority has the meaning set out in section 5(1) of the Local Government Act 2002
manager,—
- (a) in relation to a participatory security,—
  - (i) means a person—
    (A) on whose behalf any money paid in consideration of the allotment of the security is received; or
    (B) with a substantial obligation to security holders to act in the continuing administration or management of the scheme to which the security relates; or
    (C) to whom both subsubparagraphs (A) and (B) apply; but
  - (ii) does not include a person who is a participatory security trustee in relation to the security if the person acts in the continuing administration or management of the scheme to which the security relates solely in the person's capacity as a participatory security trustee; and
- (b) in relation to a unit in a unit trust, has the same meaning as in section 2(1) of the Unit Trusts Act 1960:
- (c) in relation to an interest in a KiwiSaver scheme other than a restricted KiwiSaver scheme, has the same meaning as in section 4(1) of the KiwiSaver Act 2006
Minister means the Minister of the Crown who, under the authority of any warrant or with the authority of the Prime Minister, is for the time being responsible for the administration of this Act
money includes money's worth
offer includes an invitation, and any proposal or invitation to make an offer; and to offer has a corresponding meaning
offered in a simplified disclosure prospectus means an offer of securities to the public for subscription that is made—
- (a) by or on behalf of an issuer; and
- (b) in, or accompanied by, a simplified disclosure prospectus
participatory security means any security other than—
- (a) an equity security; or
- (b) a debt security; or
- (c) a unit in a unit trust; or
- (d) an interest in a superannuation scheme; or
- (e) a life insurance policy
participatory security trustee means a person appointed as a trustee in respect of participatory securities
person includes a corporation sole, a company or other body corporate (whether incorporated in New Zealand or elsewhere), an unincorporated body of persons, a public body, and a government department
portfolio investment entity means a portfolio investment entity within the meaning of the Income Tax Act 2004
portfolio investment interest means a portfolio investment interest within the meaning of the Income Tax Act 2004
prescribed means prescribed by regulations made under the authority of this Act
principal officer, in relation to a body corporate or other body, means—
- (a) a director of the body; or
- (b) a person in accordance with whose directions or instructions any or all of the directors of the body are accustomed to act; or
- (c) in relation to any particular requirement of this Act, any person whose function it is, or who has undertaken, to ensure that that requirement is complied with by the body:
provided that for the purposes of this Act, a person shall not be regarded as a person in accordance with whose directions or instructions any or all of the directors of a body are accustomed to act by reason only that the directors act on advice given by him or her solely in a professional capacity
prohibition order means an order made by the FMA under section 44AE(1) that prohibits a person from using a simplified disclosure prospectus
promoter, in relation to securities offered to the public for subscription,—
- (a) means a person who is instrumental in the formulation of a plan or programme pursuant to which the securities are offered to the public; and
- (b) where a body corporate is a promoter, includes every person who is a director thereof; but
- (c) does not include a director or officer of the issuer of the securities or a person acting solely in his or her professional capacity
prospective investor, in relation to a security, means any person who, under the terms of issue of the security, is eligible to subscribe for the security
prospectus means a document that contains an offer of securities to the public for subscription, and that is intended to be, or has been, delivered to the Registrar for registration under section 42
qualified auditor has the meaning given to it by section 2C
receive, in relation to a document, information, or other matter, includes receive by any form of electronic or other means of communication in a manner that enables the recipient to readily store the document, information, or other matter in a permanent form and, with or without the aid of any equipment, to retrieve and read it
registered bank has the same meaning as in section 2(1) of the Reserve Bank of New Zealand Act 1989
registered prospectus means,—
- (a) except if paragraph (b) applies,—
  - (i) a prospectus that has been registered under section 42 and the registration of which has not been cancelled under section 43G(2)(b); or
  - (ii) a document that, except in the matters specified in section 41(1), is identical to such a prospectus:
- (b) if an instrument that amends a prospectus of the kind specified in paragraph (a)(i) has been registered under section 43, and the registration of that prospectus as so amended has not been cancelled under section 43G(2)(b),—
  - (i) that prospectus as so amended; or
  - (ii) a document that, except for the matters specified in section 41(1), is identical to that prospectus as so amended
Registrar means the Registrar of Financial Service Providers under the Financial Service Providers (Registration and Dispute Resolution) Act 2008
regulations means regulations made under section 70
relative has the same meaning as in the Income Tax Act 2007
restricted KiwiSaver scheme and restricted scheme have the same meaning as in section 4(1) of the KiwiSaver Act 2006
scheme means,—
- (a) in relation to a participatory security, the arrangement or scheme to which the security relates; and
- (b) in relation to an interest in a superannuation scheme, that superannuation scheme; and
- (c) in relation to a unit in a unit trust, that unit trust
security has the meaning set out in section 2D
security holder, in relation to a security offered to the public, means—
- (a) in the case of a bearer security or a security to which section 51 does not apply, the holder of that security; or
- (b) in the case of any other security, the person who is registered as the holder of the security in a register kept pursuant to section 51
send, in relation to a document, information, or other matter, includes send by electronic or other means that enables the recipient to readily store the matter in a permanent and legible form
simplified disclosure prospectus means a registered prospectus that may be used only if—
- (a) the issuer is subject to a disclosure obligation; and
- (b) the regulations provide for the use of a simplified disclosure prospectus by a person who is subject to that type of disclosure obligation
statutory supervisor means a person appointed as a statutory supervisor in respect of participatory securities for the purposes of, and in accordance with, this Act
subscribe includes purchase and contribute to, whether by way of cash or otherwise; and subscription and subscriber have corresponding meanings
superannuation scheme means a registered superannuation scheme within the meaning of section 2(1) of the Superannuation Schemes Act 1989
superannuation trustee has the same meaning as the term trustees has in the Superannuation Schemes Act 1989
trust deed means a trust deed required by section 33(2)(a)
trustee means a person appointed as a trustee in respect of debt securities for the purposes of, and in accordance with, this Act
trustee corporation means Public Trust or the Māori Trustee or any corporation authorised by any Act of the Parliament of New Zealand to administer the estates of deceased persons and other trust estates
unit means an interest or right to participate in any capital, assets, earnings, or other property of a unit trust; and includes—
- (a) any interest or right that is declared by regulations to be a unit for the purposes of this Act; and
- (b) any renewal or variation of the terms or conditions of any such interest or right;—
but does not include any such interest or right or a security referred to in paragraph (b) that is declared by regulations not to be a unit for the purposes of this Act
unit trust has the same meaning as in section 2(1) of the Unit Trusts Act 1960
unit trustee has the same meaning as the term trustee has in section 2(1) of the Unit Trusts Act 1960
working day means a day of the week other than—
- (a) Saturday, Sunday, Good Friday, Easter Monday, Anzac Day, the Sovereign's birthday, Labour Day, and Waitangi Day; and
- (b) a day in the period commencing with 25 December in any year and ending with 2 January in the following year; and
- (c) if 1 January in any year falls on a Friday, the following Monday; and
- (d) if 1 January in any year falls on a Saturday or a Sunday, the following Monday and Tuesday
writing includes—
- (a) the recording of words in a permanent and legible form; and
- (b) the display of words by any form of electronic or other means of communication in a manner that enables the words to be readily stored in a permanent form and, with or without the aid of any equipment, to be retrieved and read;—
and written has a corresponding meaning.
(2) [Repealed]
Section 2(1) advertisement: substituted, on 1 October 1997, by section 3(1) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) approved superannuation scheme: repealed, on 22 March 1989, by section 31 of the Superannuation Schemes Act 1989 (1989 No 10).
Section 2(1) associated persons or persons associated with each other: substituted, on 1 October 1997, by section 3(2) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) associated persons or persons associated with each other paragraph (a): amended, on 1 April 2008 (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).
Section 2(1) authorised advertisement: amended, on 1 October 1997, by section 3(3) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) authorised life insurance company: repealed, on 1 October 1997, by section 3(4) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) bonus bond: inserted, on 1 October 1997, by section 3(5) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) books and papers or books or papers: repealed, on 1 October 1997, by section 3(4) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) chattel: substituted, on 15 April 2004, by section 3(1) of the Securities Amendment Act 2004 (2004 No 31).
Section 2(1) chattel: amended, on 24 November 2009, by section 4(1) of the Securities Amendment Act 2009 (2009 No 56).
Section 2(1) civil liability event: inserted, on 25 October 2006, by section 6(2) of the Securities Amendment Act 2006 (2006 No 46).
Section 2(1) Commission: repealed, on 1 May 2011, by section 5(1) of the Securities Amendment Act 2011 (2011 No 6).
Section 2(1) company: substituted, on 15 April 2004, by section 3(2) of the Securities Amendment Act 2004 (2004 No 31).
Section 2(1) contributory mortgage broker: inserted, on 16 December 1982, by section 2(2) of the Securities Amendment Act 1982 (1982 No 147).
Section 2(1) convertible note: amended, on 1 April 2008 (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).
Section 2(1) co-operative company paragraph (a): substituted, on 1 September 1996, by section 51 of the Co-operative Companies Act 1996 (1996 No 24).
Section 2(1) co-operative company paragraph (b): substituted, on 1 September 1996, by section 51 of the Co-operative Companies Act 1996 (1996 No 24).
Section 2(1) co-operative company paragraph (c): substituted, on 16 December 1982, by section 2(3) of the Securities Amendment Act 1982 (1982 No 147).
Section 2(1) co-operative company paragraph (d): added, on 16 December 1982, by section 2(3) of the Securities Amendment Act 1982 (1982 No 147).
Section 2(1) court: substituted, on 1 December 2002, by section 3(1) of the Securities Amendment Act 2002 (2002 No 43).
Section 2(1) date of a balance sheet or date of an interim balance sheet: repealed, on 1 October 1997, by section 2 of the Securities Amendment Act 1997 (1997 No 16).
Section 2(1) date of a prospectus: amended, on 15 April 2004, by section 3(4) of the Securities Amendment Act 2004 (2004 No 31).
Section 2(1) date of a registered prospectus: inserted, on 16 December 1982, by section 2(5) of the Securities Amendment Act 1982 (1982 No 147).
Section 2(1) date of a registered prospectus: amended, on 15 April 2004, by section 3(4) of the Securities Amendment Act 2004 (2004 No 31).
Section 2(1) date of a statement of financial position or date of an interim statement of financial position: inserted, on 1 October 1997, by section 2 of the Securities Amendment Act 1997 (1997 No 16).
Section 2(1) debt security: substituted, on 1 October 1997, by section 3(6) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) delayed allotment order: inserted, on 28 July 2009, by section 4 of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Section 2(1) delayed allotment order: amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 2(1) director: substituted, on 16 December 1982, by section 2(7) of the Securities Amendment Act 1982 (1982 No 147).
Section 2(1) director paragraph (b): amended, on 2 May 2008, by section 121(3) of the Limited Partnerships Act 2008 (2008 No 1).
Section 2(1) director paragraph (c): amended, on 2 May 2008, by section 121(3) of the Limited Partnerships Act 2008 (2008 No 1).
Section 2(1) director paragraph (d): amended, on 2 May 2008, by section 121(3) of the Limited Partnerships Act 2008 (2008 No 1).
Section 2(1) disclosure obligation: inserted, on 28 July 2009, by section 4 of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Section 2(1) distribute: substituted, on 1 October 1997, by section 3(7) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) document: substituted, on 1 December 2002, by section 3(2) of the Securities Amendment Act 2002 (2002 No 43).
Section 2(1) emissions units: inserted, on 24 November 2009, by section 4(2) of the Securities Amendment Act 2009 (2009 No 56).
Section 2(1) equity security: substituted, on 1 October 1997, by section 3(8) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) expert: amended, on 15 April 2004, by section 3(5) of the Securities Amendment Act 2004 (2004 No 31).
Section 2(1) expert: amended, on 3 May 2001, by section 5(d) of the Securities Amendment Act 2001 (2001 No 25).
Section 2(1) expert: amended, on 3 May 2001, by section 5(e) of the Securities Amendment Act 2001 (2001 No 25).
Section 2(1) expert: amended, on 3 May 2001, by section 5(f) of the Securities Amendment Act 2001 (2001 No 25).
Section 2(1) FMA: inserted, on 1 May 2011, by section 5(2) of the Securities Amendment Act 2011 (2011 No 6).
Section 2(1) government department: substituted, on 1 March 2002, by section 170(1) of the Public Trust Act 2001 (2001 No 100).
Section 2(1) government department paragraph (a): amended, on 1 July 2009, pursuant to section 30(2)(a) of the Māori Trustee Amendment Act 2009 (2009 No 12).
Section 2(1) greenhouse gas: inserted, on 24 November 2009, by section 4(2) of the Securities Amendment Act 2009 (2009 No 56).
Section 2(1) interest in a superannuation scheme: inserted, on 1 October 1997, by section 3(9) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) investment statement: inserted, on 1 October 1997, by section 3(9) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) issuer: substituted, on 1 October 1997, by section 3(10) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) issuer paragraph (f): amended, on 1 May 2011, by section 56 of the KiwiSaver Amendment Act 2011 (2011 No 8).
Section 2(1) issuer paragraph (g): added, on 1 May 2011, by section 56 of the KiwiSaver Amendment Act 2011 (2011 No 8).
Section 2(1) KiwiSaver scheme: inserted, on 1 May 2011, by section 56 of the KiwiSaver Amendment Act 2011 (2011 No 8).
Section 2(1) KiwiSaver trustee: inserted, on 1 May 2011, by section 56 of the KiwiSaver Amendment Act 2011 (2011 No 8).
Section 2(1) labour share: repealed, on 15 April 2004, by section 3(6) of the Securities Amendment Act 2004 (2004 No 31).
Section 2(1) life insurance company: inserted, on 1 July 1989, by section 42(2) of the Securities Markets Act 1988 (1988 No 234).
Section 2(1) life insurance policy: substituted, on 1 October 1997, by section 3(11) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) local authority: substituted, on 9 April 2008, by section 4 of the Securities (Local Authority Exemption) Amendment Act 2008 (2008 No 23).
Section 2(1) manager: substituted, on 1 October 1997, by section 3(12) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) manager paragraph (a): substituted, on 15 April 2004, by section 3(7) of the Securities Amendment Act 2004 (2004 No 31).
Section 2(1) manager paragraph (c): added, on 1 May 2011, by section 56 of the KiwiSaver Amendment Act 2011 (2011 No 8).
Section 2(1) Minister: substituted, on 1 October 1995, by section 10(3) of the Department of Justice (Restructuring) Act 1995 (1995 No 39).
Section 2(1) offered in a simplified disclosure prospectus: inserted, on 28 July 2009, by section 4 of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Section 2(1) overseas regulator: repealed, on 1 May 2011, by section 5(1) of the Securities Amendment Act 2011 (2011 No 6).
Section 2(1) participatory security: substituted, on 1 October 1997, by section 3(13) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) participatory security trustee: inserted, on 15 April 2004, by section 3(8) of the Securities Amendment Act 2004 (2004 No 31).
Section 2(1) portfolio investment entity: inserted, on 1 October 2007, by section 232 of the Taxation (Savings Investment and Miscellaneous Provisions) Act 2006 (2006 No 81).
Section 2(1) portfolio investment interest: inserted, on 1 October 2007, by section 232 of the Taxation (Savings Investment and Miscellaneous Provisions) Act 2006 (2006 No 81).
Section 2(1) principal officer proviso: amended, on 3 May 2001, by section 5(e) of the Securities Amendment Act 2001 (2001 No 25).
Section 2(1) prohibition order: inserted, on 28 July 2009, by section 4 of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Section 2(1) prohibition order: amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 2(1) promoter: substituted, on 16 December 1982, by section 2(9) of the Securities Amendment Act 1982 (1982 No 147).
Section 2(1) promoter paragraph (c): amended, on 3 May 2001, by section 5(d) of the Securities Amendment Act 2001 (2001 No 25).
Section 2(1) prospective investor: inserted, on 1 October 1997, by section 3(14) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) prospectus: substituted, on 16 December 1982, by section 2(10) of the Securities Amendment Act 1982 (1982 No 147).
Section 2(1) qualified auditor: substituted, on 1 October 1997, by section 3(15) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) receive: inserted, on 1 October 1997, by section 3(15) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) registered bank: inserted, on 24 March 1995, by section 13(2) of the Reserve Bank of New Zealand Amendment Act 1995 (1995 No 5).
Section 2(1) registered prospectus: substituted, on 1 May 2011, by section 5(2) of the Securities Amendment Act 2011 (2011 No 6).
Section 2(1) Registrar: substituted, on 1 May 2011, by section 5(2) of the Securities Amendment Act 2011 (2011 No 6).
Section 2(1) regulations: inserted, on 1 October 1997, by section 3(16) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) relative: amended, on 1 April 2008 (effective for 2008–09 income year and later income years, except when the context requires otherwise), by section ZA 2(1) of the Income Tax Act 2007 (2007 No 97).
Section 2(1) restricted KiwiSaver scheme and restricted scheme: inserted, on 1 May 2011, by section 56 of the KiwiSaver Amendment Act 2011 (2011 No 8).
Section 2(1) scheme: inserted, on 1 October 1997, by section 3(17) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) security: substituted, on 1 October 1997, by section 3(18) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) send: inserted, on 1 October 1997, by section 3(19) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) simplified disclosure prospectus: inserted, on 28 July 2009, by section 4 of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Section 2(1) superannuation scheme: inserted, on 1 October 1997, by section 3(20) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) superannuation trustee: inserted, on 1 October 1997, by section 3(20) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) Takeovers Panel: repealed, on 1 May 2011, by section 5(1) of the Securities Amendment Act 2011 (2011 No 6).
Section 2(1) trust deed: inserted, on 1 October 1997, by section 3(20) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) trustee corporation: amended, on 1 July 2009, pursuant to section 30(2)(a) of the Māori Trustee Amendment Act 2009 (2009 No 12).
Section 2(1) trustee corporation: amended, on 1 March 2002, by section 170(1) of the Public Trust Act 2001 (2001 No 100).
Section 2(1) trustee corporation: amended, on 1 January 1987, pursuant to section 29(2) of the Constitution Act 1986 (1986 No 114).
Section 2(1) unit: added, on 1 October 1997, by section 3(21) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) unit trust: added, on 1 October 1997, by section 3(21) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) unit trustee: added, on 1 October 1997, by section 3(21) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) working day: added, on 1 October 1997, by section 3(21) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(1) writing: added, on 1 October 1997, by section 3(21) of the Securities Amendment Act 1996 (1996 No 100).
Section 2(2): repealed, on 1 October 1997, by section 3(22) of the Securities Amendment Act 1996 (1996 No 100).

2A Meaning of advertisement

(1) In this Act, unless the context otherwise requires, advertisement means a form of communication—
- (a) that—
  - (i) contains or refers to an offer of securities to the public for subscription; or
  - (ii) is reasonably likely to induce persons to subscribe for securities of an issuer, being securities to which the communication relates and that have been, or are to be, offered to the public for subscription; and
- (b) that is authorised or instigated by, or on behalf of, the issuer of the securities or prepared with the co-operation of, or by arrangement with, the issuer of the securities; and
- (c) that is to be, or has been, distributed to a person.
(2) The following are also advertisements:
- (a) a statement relating to an interest in a contributory mortgage required to be distributed to a person by regulations:
- (b) an investment statement:
- (c) documents, information, and other matters required to be made publicly available under section 54C.
(3) None of the following is an advertisement:
- (a) a registered prospectus:
- (b) [Repealed]
- (c) a statement or report made in accordance with section 3(7):
- (d) a disclosure statement published by a registered bank under section 81 of the Reserve Bank of New Zealand Act 1989.
(4) A communication is an advertisement whether or not consideration is to be, or has been, paid for the distribution of the communication.
(5) The definition of the term advertisement in this section does not apply to the term advertisement in section 3(1)(c).
(6) Where—
- (a) an advertisement within the meaning of this section appears in association with another advertisement that is not an advertisement within the meaning of this section; and
- (b) both advertisements are authorised or instigated by, or on behalf of, the same person or prepared with the co-operation of, or by arrangement with, the same person,—
those advertisements are deemed to be a single advertisement within the meaning of this section.
(7) Unless this Act or regulations provide otherwise, nothing in this Act or regulations limits the information, statements, and other matters that may be contained in an advertisement.
Section 2A: inserted, on 1 October 1997, by section 4 of the Securities Amendment Act 1996 (1996 No 100).
Section 2A(2)(c): added, on 1 May 2011, by section 6 of the Securities Amendment Act 2011 (2011 No 6).
Section 2A(3)(b): repealed, on 15 April 2004, by section 4 of the Securities Amendment Act 2004 (2004 No 31).

2B Meaning of due enquiry

(1) For the purposes of this Act, a person who is required to make due enquiry about a matter does not fail to do so if—
- (a) he or she receives information or advice about the matter from another person whom he or she believes on reasonable grounds is reliable and competent; and
- (b) the information or advice received—
  - (i) is of the same kind and standard as that which it would be reasonable to expect to be supplied in the ordinary course of management of businesses of the same kind to persons in the same kind of position; and
  - (ii) does not state or indicate that further information, advice, or investigation is or may be required; and
- (c) he or she has no reason to believe that the information or advice is or may be incorrect.
(2) Nothing in subsection (1) limits the ways in which a person may make due enquiry about a matter.
Section 2B: inserted, on 1 October 1997, by section 4 of the Securities Amendment Act 1996 (1996 No 100).

2C Meaning of qualified auditor

(1) For the purposes of this Act, a person is a qualified auditor only if—
- (a) the person is a chartered accountant (within the meaning of section 19 of the New Zealand Institute of Chartered Accountants Act 1996); or
- (b) the person is an auditor appointed by the Auditor-General under section 32 of the Public Audit Act 2001; or
- (c) the person is a member, fellow, or associate of an association of accountants constituted outside New Zealand where—
  - (i) the association is, by notice in the Gazette, approved for the time being for the purposes of this Act by the Registrar; and
  - (ii) the person is entitled to act as an auditor in the country, State, or territory in which the association is constituted; or
- (d) the person, not being a person referred to in paragraph (c), is—
  - (i) entitled to act as an auditor in a country, State, or territory outside New Zealand; and
  - (ii) approved for the time being for the purposes of this Act by the Registrar by notice in the Gazette.
(2) None of the following persons is qualified for appointment as an auditor of the accounting or other records of an issuer of securities:
- (a) the issuer, or a principal officer, officer, or employee of the issuer:
- (b) a person who is a partner of or in the employment of a person specified in paragraph (a):
- (c) a body corporate.
(3) A person is not qualified for appointment as auditor of an issuer of securities if the person is, by virtue of subsection (2), disqualified for appointment as auditor of a person that is the issuer's subsidiary or holding company or a subsidiary of the issuer's holding company, or would be so disqualified if that person were a company.
Section 2C: inserted, on 1 October 1997, by section 4 of the Securities Amendment Act 1996 (1996 No 100).
Section 2C(1)(a): amended, on 7 July 2010, by section 10 of the New Zealand Institute of Chartered Accountants Amendment Act 2010 (2010 No 74).
Section 2C(1)(b): amended, on 1 July 2001, by section 53 of the Public Audit Act 2001 (2001 No 10).

2D Meaning of security

(1) In this Act, unless the context otherwise requires, the term security means any interest or right to participate in any capital, assets, earnings, royalties, or other property of any person; and includes—
- (a) an equity security; and
- (b) a debt security; and
- (c) a unit in a unit trust; and
- (d) an interest in a superannuation scheme; and
- (e) a life insurance policy; and
- (f) any interest or right that is declared by regulations to be a security for the purposes of this Act; and
- (g) any renewal or variation of the terms or conditions of any such interest or right;—
but does not include any such interest or right (other than a security referred to in paragraph (f)) that is declared by regulations not to be a security for the purposes of this Act.
(2) Where the terms of a security require or allow the subscriber to pay separate amounts of money at different times, each such payment shall, for the purposes of this Act, be treated as payment for the same security as each other payment.
Section 2D: inserted, on 1 October 1997, by section 4 of the Securities Amendment Act 1996 (1996 No 100).

3 Construction of references to offering securities to the public

(1) Any reference in this Act to an offer of securities to the public shall be construed as including—
- (a) a reference to offering the securities to any section of the public, however selected; and
- (b) a reference to offering the securities to individual members of the public selected at random; and
- (c) a reference to offering the securities to a person if the person became known to the offeror as a result of any advertisement made by or on behalf of the offeror and that was intended or likely to result in the public seeking further information or advice about any investment opportunity or services,—
whether or not any such offer is calculated to result in the securities becoming available for subscription by persons other than those receiving the offer.
(2) None of the following offers shall constitute an offer of securities to the public:
- (a) an offer of securities made to any or all of the following persons only:
  - (i) relatives or close business associates of the issuer or of a director of the issuer:
  - (ii) persons whose principal business is the investment of money or who, in the course of and for the purposes of their business, habitually invest money:
  - (iia) persons who are each required to pay a minimum subscription price of at least $500,000 for the securities before the allotment of those securities:
  - (iib) persons who have each previously paid a minimum subscription price of at least $500,000 for securities (the initial securities) in a single transaction before the allotment of the initial securities, provided that—
    - (A) the offer of the securities is made by the issuer of the initial securities; and
    - (B) the offer of the securities is made within 18 months of the date of the first allotment of the initial securities:
  - (iii) any other person who in all the circumstances can properly be regarded as having been selected otherwise than as a member of the public:
- (b) an invitation to a person to enter into a bona fide underwriting or sub-underwriting agreement with respect to an offer of securities.
- (c) [Repealed]
- (d) [Repealed]
(3) A person shall not be precluded from being regarded as a member of the public in regard to any offer of securities by reason only that he or she is a purchaser of goods from, or an employee or client of, or a holder of securities previously issued by, the issuer or any promoter of the securities.
(4) Any reference in this Act to an offer of securities to the public shall be construed as including a reference to distributing an advertisement, a prospectus, a registered prospectus, or an application form for the subscription of securities.
(5) Proof of an offer of securities to 1 person selected as a member of the public shall be prima facie evidence of an offer of securities to the public.
(6) [Repealed]
(7) A statement or report—
- (a) made to or for the purposes of a general meeting of the members of the issuer, or a report of the proceedings of such a meeting; or
- (b) relating to the affairs of the issuer made to any stock exchange for the purposes of compliance with the listing requirements relating to that stock exchange, by or on behalf of that issuer, or any report of such statement or report—
shall not constitute an offer of securities to the public.
(8) In calculating the subscription price payable, or paid, for securities for the purposes of subsection (2)(a)(iia) or (iib), any amount payable, or paid, must be disregarded to the extent to which it is to be paid, or was paid, out of money lent by the issuer, the offeror, or any associated person of the issuer or offeror.
(9) The Governor-General may, by Order in Council, amend the minimum subscription price that applies under subsection (2)(a)(iia) or (iib).
Section 3(2)(a)(i): amended, on 15 April 2004, by section 5(1) of the Securities Amendment Act 2004 (2004 No 31).
Section 3(2)(a)(iia): inserted, on 15 April 2004, by section 5(2) of the Securities Amendment Act 2004 (2004 No 31).
Section 3(2)(a)(iib): inserted, on 28 July 2009, by section 5(1) of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Section 3(2)(c): repealed, on 1 July 2001, by section 12(2) of the Takeovers Amendment Act 2001 (2001 No 30).
Section 3(2)(d): repealed, on 1 July 2001, by section 12(2) of the Takeovers Amendment Act 2001 (2001 No 30).
Section 3(3): amended, on 3 May 2001, by section 5(c) of the Securities Amendment Act 2001 (2001 No 25).
Section 3(4): substituted, on 1 September 1983, by section 3(1) of the Securities Amendment Act 1982 (1982 No 147).
Section 3(6): repealed, on 15 April 2004, by section 5(3) of the Securities Amendment Act 2004 (2004 No 31).
Section 3(7): added, on 1 September 1983, by section 3(2) of the Securities Amendment Act 1982 (1982 No 147).
Section 3(8): added, on 15 April 2004, by section 5(4) of the Securities Amendment Act 2004 (2004 No 31).
Section 3(8): amended, on 28 July 2009, by section 5(2) of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Section 3(9): added, on 15 April 2004, by section 5(4) of the Securities Amendment Act 2004 (2004 No 31).
Section 3(9): amended, on 28 July 2009, by section 5(3) of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).

3A Status of examples

(1) An example used in this Act is only illustrative of the provisions to which it relates. It does not limit those provisions.
(2) If an example and a provision to which it relates are inconsistent, the provision prevails.
Section 3A: inserted, on 28 July 2009, by section 6 of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).

4 Application of this Act

(1) The provisions of this Act shall have effect notwithstanding anything to the contrary in any other enactment or in any deed, agreement, application, prospectus, registered prospectus, or advertisement.
(2) A condition of any agreement requiring or binding an applicant for securities to waive compliance with any requirement of this Act, or purporting to affect him or her with notice of any contract, document, or matter relating to the securities that is not specifically referred to in a prospectus or registered prospectus, shall be void.
(3) Nothing in this Act shall limit any powers a trustee, superannuation trustee, unit trustee, or statutory supervisor may have other than pursuant to this Act.
(4) Nothing in this section or in any other provision of this Act limits the Illegal Contracts Act 1970.
(5) Despite subsection (4), nothing in the Illegal Contracts Act 1970 applies to sections 37 and 37A.
Section 4(1): amended, on 1 September 1983, by section 4(a) of the Securities Amendment Act 1982 (1982 No 147).
Section 4(2): amended, on 3 May 2001, by section 5(e) of the Securities Amendment Act 2001 (2001 No 25).
Section 4(2): amended, on 1 September 1983, by section 4(b) of the Securities Amendment Act 1982 (1982 No 147).
Section 4(3): amended, on 1 October 1997, by section 5(1) of the Securities Amendment Act 1996 (1996 No 100).
Section 4(4): added, on 1 October 1997, by section 5(2) of the Securities Amendment Act 1996 (1996 No 100).
Section 4(5): added, on 15 April 2004, by section 6 of the Securities Amendment Act 2004 (2004 No 31).

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
- (e) Housing New Zealand Corporation established by the Housing Corporation Act 1974; 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).

5A Exemption for employer superannuation schemes

Nothing in sections 37, 37A(1)(c), and 39 to 43B applies to any interest in a superannuation scheme that is an employer superannuation scheme.
Section 5A: inserted, on 15 April 2004, by section 8 of the Securities Amendment Act 2004 (2004 No 31).
Section 5A: amended, on 1 May 2011, by section 8 of the Securities Amendment Act 2011 (2011 No 6).

5B Conditions of exemption for employer superannuation schemes

The exemption in section 5A is subject to the conditions that—
- (a) each annual report prepared under section 14 of the Superannuation Schemes Act 1989 for a financial year during which the superannuation trustees of the scheme relied on that exemption must include the following statements and information:
  - (i) if any superannuation trustee, promoter, or manager of the scheme, or any director of that superannuation trustee, promoter, or manager, has, during the 5 years preceding the specified date, been adjudged bankrupt or insolvent, convicted of any crime involving dishonesty, prohibited from acting as a director of a company, or placed in statutory management or receivership, a statement to that effect including the name and any alternative or former name or names of the superannuation trustee, promoter, manager, or director concerned:
  - (ii) if more than 10% of the value of the scheme's assets (calculated in accordance with generally accepted accounting practice) was, at any time during the year preceding the specified date, represented directly or indirectly by any securities that were issued by a superannuation trustee, manager, or custodian of the scheme (or any associated person of any of them), a description of those securities:
  - (iii) a brief description of any legal proceedings or arbitrations that are pending at the specified date and that may have a material adverse effect on the scheme:
  - (iv) a statement by the superannuation trustees of the scheme (or, if a superannuation trustee is a body corporate or unincorporate, by the directors of that body) as to whether, in their opinion, after due enquiry by them, either or both of the following have materially and adversely changed since the specified date:
    - (A) the value of the scheme's assets relative to its liabilities (including contingent liabilities):
    - (B) the ability of the scheme to pay its debts as they become due in the normal course of business; and
- (b) the superannuation trustees of the scheme must, within 5 working days of receiving a member's request for a description of the investment objectives and policy for the scheme or of the means by which changes can be made to those objectives and that policy, without fee, send, or cause to be sent, to that member a brief description of those matters, except to the extent that those matters have been disclosed in the investment statement.
Section 5B: inserted, on 15 April 2004, by section 8 of the Securities Amendment Act 2004 (2004 No 31).

5C Definitions for the purposes of sections 5A to 5C

(1) For the purposes of this section and sections 5A and 5B, unless the context otherwise requires,—
crime involving dishonesty has the same meaning as in section 2(1) of the Crimes Act 1961
custodian does not include a bare trustee
de facto partner has the same meaning as in the Property (Relationships) Act 1976
employer superannuation scheme means a registered superannuation scheme (within the meaning of section 2(1) of the Superannuation Schemes Act 1989) that is promoted by an employer—
- (a) admission to the membership of which is conditional on either or both of the following:
  - (i) being an employee of that employer or an employee of an associated person of that employer:
  - (ii) being a relative, spouse, partner, or dependant of a person who is an employee of that employer or an employee of an associated person of that employer; and
- (b) in respect of which that employer is required to incur in any financial year costs (by way of contributions, expense payments, or both) at least equal to the amount of the costs of administering the scheme in respect of that financial year that are not met in that year from any excess in the value of the scheme's assets over the value of the members' accrued benefits
manager,—
- (a) in relation to a KiwiSaver scheme other than a restricted scheme, has the same meaning as in section 4(1) of the KiwiSaver Act 2006; and
- (b) in relation to any other scheme, means an administration manager or an investment manager (as those terms are defined in section 2(1) of the Superannuation Schemes Act 1989)
partner means a civil union partner or de facto partner
specified date means, in relation to an annual report for a financial year, the date on which the financial year ends
spouse has the same meaning as in the Property (Relationships) Act 1976.
(2) For the purposes of the definition of employer superannuation scheme, the costs of administering a scheme do not include costs that are directly attributable to the management of the investments of the scheme.
Section 5C: inserted, on 15 April 2004, by section 8 of the Securities Amendment Act 2004 (2004 No 31).
Section 5C(1) employer superannuation scheme paragraph (a)(ii): amended, on 26 April 2005, by section 7 of the Relationships (Statutory References) Act 2005 (2005 No 3).
Section 5C(1) manager: substituted, on 1 May 2011, by section 56 of the KiwiSaver Amendment Act 2011 (2011 No 8).
Section 5C(1) partner: inserted, on 26 April 2005, by section 7 of the Relationships (Statutory References) Act 2005 (2005 No 3).

6 Previously allotted securities

(1) Subject to this section, nothing in sections 33, 34, 37 to 38A, 38C to 43B, and 44B to 59 shall apply in respect of a security that has previously been allotted.
(2) All the provisions of this Act shall apply in respect of a security that has previously been allotted (whether in New Zealand or elsewhere) if the security was originally allotted with a view to its being offered for sale to the public in New Zealand and the security has not previously been offered for sale to the public in New Zealand or to the public outside New Zealand under an application regime under Part 5.
(2AA) A provision of Part 2 or the Regulations applies to a previously allotted security that is offered to a person outside New Zealand if—
- (a) the provision applies to the security under section 77; and
- (b) the security was originally allotted with a view to its being offered for sale to the public outside New Zealand in circumstances in which an application regime under Part 5 would have applied to the security; and
- (c) the security has not previously been offered for sale to the public in New Zealand or to the public outside New Zealand under an application regime under Part 5.
(2A) All the provisions of this Act shall apply in respect of a unit in a unit trust that has previously been allotted (whether in New Zealand or elsewhere) and that is being offered, sold, or otherwise disposed of to the public for subscription by the manager or unit trustee of the unit trust or by an associated person of that manager or unit trustee.
(3) All the provisions of this Act shall apply in respect of an equity security or a security convertible into an equity security if the holder or offeror, not being the original allotter, offers the security for sale to the public and the original allotter advises, encourages, or knowingly assists the holder or offeror in connection with the offer or sale of the security.
(4) Nothing in subsection (3) applies in respect of—
- (a) an offer by the holder of a security, being an offer of the security to the public, that is made only to persons who, at the time of the offer, are holders of securities of the original allotter under terms of the articles of association or the constitution of the original allotter that require the offer to be made to those persons; or
- (b) an offer by the holder of a security, being an offer of the security to the public, where the aggregate amount received by the holder, or persons associated with the holder, pursuant to offers of such securities to the public for subscription does not exceed $200,000 in any period of 12 months; or
- (c) an offer by the holder of a security that is made—
  - (i) to not more than 6 members of the public; or
  - (ii) if the offer is made to more than 6 members of the public, the offer is made with a view to its being accepted by not more than 6 members of the public.
(5) For the purposes of subsections (2) and (2AA), unless the contrary is proved, a security shall be deemed to have been allotted with a view to its being offered for sale to the public if it is shown—
- (a) that an offer of the security for sale to the public was made within 6 months after the allotment; or
- (b) that, at the date when the offer was made, the consideration to be received by the allotter in respect of the security had not been received.
(6) For the purposes of subsection (4)(c), unless the contrary is proved, an offer shall be deemed to have been made with a view to its being accepted by more than 6 members of the public if, within the period of 12 months immediately following the making of the offer, more than 6 persons acquire an interest, whether direct or indirect, in securities of the same class offered to the public for subscription by the holder.
(7) Notwithstanding anything in section 2, in this Act, unless the context otherwise requires, in relation to a security to which subsection (2) or subsection (2AA) or subsection (2A) or subsection (3) applies, the term issuer means the original allotter of the security, and, except for the purposes of sections 51 to 54, also includes the offeror of the security.
Section 6: substituted, on 1 July 1994, by section 2(1) of the Securities Amendment Act 1993 (1993 No 120).
Section 6(1): amended, on 1 May 2011, by section 9 of the Securities Amendment Act 2011 (2011 No 6).
Section 6(1): amended, on 1 October 1997, by section 7(1) of the Securities Amendment Act 1996 (1996 No 100).
Section 6(2): amended, on 1 December 2002, by section 5(1) of the Securities Amendment Act 2002 (2002 No 43).
Section 6(2AA): inserted, on 1 December 2002, by section 5(2) of the Securities Amendment Act 2002 (2002 No 43).
Section 6(2A): inserted, on 1 October 1997, by section 7(2) of the Securities Amendment Act 1996 (1996 No 100).
Section 6(3): amended, on 1 December 2002, by section 5(3) of the Securities Amendment Act 2002 (2002 No 43).
Section 6(5): amended, on 1 December 2002, by section 5(4) of the Securities Amendment Act 2002 (2002 No 43).
Section 6(7): amended, on 1 December 2002, by section 5(5) of the Securities Amendment Act 2002 (2002 No 43).
Section 6(7): amended, on 1 October 1997, by section 7(3) of the Securities Amendment Act 1996 (1996 No 100).

6A Term implied in certain offers of previously allotted securities

(1) This section applies to a security—
- (a) that is exempted from the application of sections 33, 34, 37 to 38A, 38C to 43B, and 44B to 59 by virtue of section 6(1); and
- (b) that is not a security to which any of subsections (2), (2AA), (2A), or (3) of section 6 applies; and
- (c) that is offered to the public.
(2) Subject to subsection (3), it is an implied term of every offer of a security to which this section applies, that, except to the extent disclosed for the purposes of the offer of the security, the offeror has no information in relation to the original allotter that is not publicly available and that would, or would be likely to, affect materially the price of the security if it were so disclosed.
(3) For the purposes of subsection (2), an offeror is not to be taken to have information in relation to the original allotter if—
- (a) arrangements existed to ensure that no individual who took part in the decision to offer the securities to the public received, or had access to, that information or was influenced, in relation to that decision, by an individual who had that information; and
- (b) no individual who took part in the decision to offer the securities to the public received, or had access to, that information or was influenced, in relation to that decision, by an individual who had that information.
Section 6A: substituted, on 1 July 1994, by section 2 of the Securities Amendment Act 1994 (1994 No 15).
Section 6A(1)(a): amended, on 1 May 2011, by section 10 of the Securities Amendment Act 2011 (2011 No 6).
Section 6A(1)(a): amended, on 1 October 1997, by section 8(1) of the Securities Amendment Act 1996 (1996 No 100).
Section 6A(1)(b): amended, on 1 December 2002, by section 6(1) of the Securities Amendment Act 2002 (2002 No 43).
Section 6A(1)(b): amended, on 1 October 1997, by section 8(2) of the Securities Amendment Act 1996 (1996 No 100).
Section 6A(1)(c): amended, on 1 December 2002, by section 6(2) of the Securities Amendment Act 2002 (2002 No 43).

7 Territorial scope of Part 2

(1) Part 2 applies to securities offered to the public in New Zealand, regardless of—
- (a) where any resulting allotment occurs:
- (b) where the issuer is resident, incorporated, or carries on business.
(2) For the purposes of this Act, a security is offered to a person in New Zealand if an offer of that security for subscription is received by a person in New Zealand, unless the issuer demonstrates that it took all reasonable steps to ensure that members of the public in New Zealand may not accept the offer.
(3) Sections 38B and 58 (except section 58(3) and (4)) also apply to any advertisement that contains or refers to an offer of securities to the public outside New Zealand and that is distributed or to be distributed to a person outside New Zealand by,—
- (a) in the case of section 38B, a person resident or having a place of business in New Zealand:
- (b) in the case of section 58, a person resident or having a principal place of business in New Zealand.
(4) For the purpose of subsection (3), the definitions of advertisement and offer extend to communications or offers received by persons outside New Zealand.
(5) The territorial scope of Part 2 may be further extended under Part 5.
(6) For the avoidance of doubt, nothing in Part 2 applies to a security or an advertisement unless it applies under subsections (1) to (5).
Section 7: substituted, on 1 December 2002, by section 7 of the Securities Amendment Act 2002 (2002 No 43).

7A Temporary exemption for superannuation schemes

[Expired]
Section 7A: expired, on 14 September 2001, by section 7A(2).

7B Terms and conditions of authorisation

[Repealed]
Section 7B: repealed, on 1 October 1997, by section 9(1) of the Securities Amendment Act 1996 (1996 No 100).

8 Act to bind Crown

This Act shall bind the Crown.

Part 1
Securities Commission

[Repealed]

Part 1: repealed, on 1 May 2011, by section 11 of the Securities Amendment Act 2011 (2011 No 6).

9 Securities Commission

[Repealed]
Section 9: repealed, on 1 May 2011, by section 11 of the Securities Amendment Act 2011 (2011 No 6).

10 Functions of Commission

[Repealed]
Section 10: repealed, on 1 May 2011, by section 11 of the Securities Amendment Act 2011 (2011 No 6).

11 Membership of Commission

[Repealed]
Section 11: repealed, on 1 May 2011, by section 11 of the Securities Amendment Act 2011 (2011 No 6).

12 Appointment of member to exercise powers of chairperson

[Repealed]
Section 12: repealed, on 25 January 2005, by section 200 of the Crown Entities Act 2004 (2004 No 115).

13 Term of office of members

[Repealed]
Section 13: repealed, on 1 May 2011, by section 11 of the Securities Amendment Act 2011 (2011 No 6).

14 Remuneration of members

[Repealed]
Section 14: repealed, on 25 January 2005, by section 200 of the Crown Entities Act 2004 (2004 No 115).

14A Travelling allowances and expenses

[Repealed]
Section 14A: repealed, on 25 January 2005, by section 200 of the Crown Entities Act 2004 (2004 No 115).

14B Commission may act by divisions

[Repealed]
Section 14B: repealed, on 1 May 2011, by section 11 of the Securities Amendment Act 2011 (2011 No 6).

14C Membership, chairperson, meetings, and resolutions of division

[Repealed]
Section 14C: repealed, on 1 May 2011, by section 11 of the Securities Amendment Act 2011 (2011 No 6).

14D Powers of division

[Repealed]
Section 14D: repealed, on 1 May 2011, by section 11 of the Securities Amendment Act 2011 (2011 No 6).

15 Meetings of Commission

[Repealed]
Section 15: repealed, on 1 May 2011, by section 11 of the Securities Amendment Act 2011 (2011 No 6).

15A Completion of proceedings where member unable to attend meeting

[Repealed]
Section 15A: repealed, on 1 May 2011, by section 11 of the Securities Amendment Act 2011 (2011 No 6).

16 Assent to resolution without a meeting

[Repealed]
Section 16: repealed, on 1 May 2011, by section 11 of the Securities Amendment Act 2011 (2011 No 6).

17 General powers of Commission

[Repealed]
Section 17: repealed, on 25 January 2005, by section 200 of the Crown Entities Act 2004 (2004 No 115).

17A Sharing of information with Takeovers Panel

[Repealed]
Section 17A: repealed, on 1 May 2011, by section 11 of the Securities Amendment Act 2011 (2011 No 6).

17B Sharing of information with Commerce Commission

[Repealed]
Section 17B: repealed, on 1 May 2011, by section 11 of the Securities Amendment Act 2011 (2011 No 6).

18 Powers of Commission to take evidence

[Repealed]
Section 18: repealed, on 1 December 2002, by section 12 of the Securities Amendment Act 2002 (2002 No 43).

18A Commission may take evidence for overseas commission or body

[Repealed]
Section 18A: repealed, on 1 December 2002, by section 12 of the Securities Amendment Act 2002 (2002 No 43).

19 Provisions relating to certain proceedings before Commission

[Repealed]
Section 19: repealed, on 1 December 2002, by section 12 of the Securities Amendment Act 2002 (2002 No 43).

20 Employees of Commission

[Repealed]
Section 20: repealed, on 25 January 2005, by section 200 of the Crown Entities Act 2004 (2004 No 115).

21 Employment of experts

[Repealed]
Section 21: repealed, on 25 January 2005, by section 200 of the Crown Entities Act 2004 (2004 No 115).

22 Superannuation or retiring allowances

[Repealed]
Section 22: repealed, on 1 May 2011, by section 11 of the Securities Amendment Act 2011 (2011 No 6).

23 Application of certain Acts to members and staff of Commission

[Repealed]
Section 23: repealed, on 25 January 2005, by section 200 of the Crown Entities Act 2004 (2004 No 115).

24 Members of Commission and staff deemed to be officials

[Repealed]
Section 24: repealed, on 25 January 2005, by section 200 of the Crown Entities Act 2004 (2004 No 115).

25 Commission may state case for opinion of High Court

[Repealed]
Section 25: repealed, on 1 December 2002, by section 12 of the Securities Amendment Act 2002 (2002 No 43).

26 Appeals to High Court on questions of law only

[Repealed]
Section 26: repealed, on 1 December 2002, by section 12 of the Securities Amendment Act 2002 (2002 No 43).

27 Restrictions on delegation

[Repealed]
Section 27: repealed, on 1 May 2011, by section 11 of the Securities Amendment Act 2011 (2011 No 6).

28 Protection from liability for Commission and members, officers, and employees

[Repealed]
Section 28: repealed, on 1 May 2011, by section 11 of the Securities Amendment Act 2011 (2011 No 6).

28A Commission may publish reports

[Repealed]
Section 28A: repealed, on 1 May 2011, by section 11 of the Securities Amendment Act 2011 (2011 No 6).

29 Evidence of resolution of Commission

[Repealed]
Section 29: repealed, on 1 May 2011, by section 11 of the Securities Amendment Act 2011 (2011 No 6).

30 Annual reports

[Repealed]
Section 30: repealed, on 25 January 2005, by section 200 of the Crown Entities Act 2004 (2004 No 115).

31 Money to be appropriated by Parliament for purposes of this Act

[Repealed]
Section 31: repealed, on 25 January 2005, by section 200 of the Crown Entities Act 2004 (2004 No 115).

31A Funds of Commission

[Repealed]
Section 31A: repealed, on 25 January 2005, by section 200 of the Crown Entities Act 2004 (2004 No 115).

31B Bank accounts

[Repealed]
Section 31B: repealed, on 25 January 2005, by section 200 of the Crown Entities Act 2004 (2004 No 115).

31C Auditor-General to be auditor of Commission

[Repealed]
Section 31C: repealed, on 25 January 2005, by section 200 of the Crown Entities Act 2004 (2004 No 115).

31CA Crown entity

[Repealed]
Section 31CA: repealed, on 25 January 2005, by section 200 of the Crown Entities Act 2004 (2004 No 115).

31D Investment of money

[Repealed]
Section 31D: repealed, on 25 January 2005, by section 200 of the Crown Entities Act 2004 (2004 No 115).

31E Exemption from income tax

[Repealed]
Section 31E: repealed, on 1 May 2011, by section 11 of the Securities Amendment Act 2011 (2011 No 6).

32 Offences

[Repealed]
Section 32: repealed, on 1 December 2002, by section 14 of the Securities Amendment Act 2002 (2002 No 43).

Part 2
Restrictions on offer and allotment of securities to the public

33 Restrictions on offer of securities to the public

(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.
Section 33(1): substituted, on 1 October 1997, by section 11(1) of the Securities Amendment Act 1996 (1996 No 100).
Section 33(2)(a): amended, on 1 October 2011, by section 68(1) of the Securities Trustees and Statutory Supervisors Act 2011 (2011 No 10).
Section 33(2)(ab): inserted, on 1 May 2011, by section 12(1) of the Securities Amendment Act 2011 (2011 No 6).
Section 33(3)(a): amended, on 1 October 2011, by section 68(2) of the Securities Trustees and Statutory Supervisors Act 2011 (2011 No 10).
Section 33(3)(ab): inserted, on 1 May 2011, by section 12(2) of the Securities Amendment Act 2011 (2011 No 6).

34 Restrictions on distribution of prospectuses

(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.
Section 34: substituted, on 1 September 1983, by section 14 of the Securities Amendment Act 1982 (1982 No 147).
Section 34(1)(a): substituted, on 28 July 1997, by section 6 of the Securities Amendment Act (No 2) 1997 (1997 No 54).
Section 34(1)(a): amended, on 1 May 2011, by section 13 of the Securities Amendment Act 2011 (2011 No 6).
Section 34(2): added, on 1 October 1997, by section 12 of the Securities Amendment Act 1996 (1996 No 100).
Section 34(3): added, on 28 July 2009, by section 8 of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).

35 Restrictions on door-to-door sales

(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.
Section 35(3): substituted, on 1 October 1997, by section 13 of the Securities Amendment Act 1996 (1996 No 100).

36 Restrictions on advertising of otherwise exempt securities

[Repealed]
Section 36: repealed, on 1 September 1983, by section 17(2) of the Securities Amendment Act 1982 (1982 No 147).

36A Subscriptions must be held in trust

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.
Section 36A: inserted, on 15 April 2004, by section 10 of the Securities Amendment Act 2004 (2004 No 31).

37 Void irregular allotments

(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]
Section 37: substituted, on 1 September 1983, by section 15 of the Securities Amendment Act 1982 (1982 No 147).
Section 37(1A): inserted, on 28 July 2009, by section 9 of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Section 37(1B): inserted, on 1 May 2011, by section 14 of the Securities Amendment Act 2011 (2011 No 6).
Section 37(2): amended, on 15 April 2004, by section 11(1) of the Securities Amendment Act 2004 (2004 No 31).
Section 37(2): amended, on 1 October 1997, by section 14(1) of the Securities Amendment Act 1996 (1996 No 100).
Section 37(2A): inserted, on 15 April 2004, by section 11(2) of the Securities Amendment Act 2004 (2004 No 31).
Section 37(3): substituted, on 15 April 2004, by section 11(3) of the Securities Amendment Act 2004 (2004 No 31).
Section 37(5)(a): repealed, on 15 April 2004, by section 11(4) of the Securities Amendment Act 2004 (2004 No 31).
Section 37(6): amended, on 1 October 1997, by section 3 of the Securities Amendment Act 1997 (1997 No 16).
Section 37(6) proviso: amended, on 3 May 2001, by section 5(c) of the Securities Amendment Act 2001 (2001 No 25).
Section 37(6) proviso: amended, on 3 May 2001, by section 5(d) of the Securities Amendment Act 2001 (2001 No 25).
Section 37(7): repealed, on 1 January 2011, by section 58 of the Limitation Act 2010 (2010 No 110).

Relief orders in respect of section 37

Heading: inserted, on 15 April 2004, by section 12 of the Securities Amendment Act 2004 (2004 No 31).

37AA Applications for relief orders in respect of section 37

(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 37AA: inserted, on 15 April 2004, by section 12 of the Securities Amendment Act 2004 (2004 No 31).

37AB Effect of relief order in respect of section 37

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.
Section 37AB: inserted, on 15 April 2004, by section 12 of the Securities Amendment Act 2004 (2004 No 31).

Mandatory relief orders

Heading: inserted, on 15 April 2004, by section 12 of the Securities Amendment Act 2004 (2004 No 31).

37AC Court must make relief order in certain circumstances

(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.
Section 37AC: inserted, on 15 April 2004, by section 12 of the Securities Amendment Act 2004 (2004 No 31).
Section 37AC(1)(e)(i): substituted, on 1 May 2011, by section 15 of the Securities Amendment Act 2011 (2011 No 6).

37AD Consent for purposes of section 37AC(1)(c) or (d)

(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 describes the effect of section 363 of the Companies Act 1993 (as applied by section 66) in relation to that prospectus:
  - (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).
Section 37AD: inserted, on 15 April 2004, by section 12 of the Securities Amendment Act 2004 (2004 No 31).
Section 37AD(1)(b)(iii): amended, on 1 May 2011, by section 16(1) of the Securities Amendment Act 2011 (2011 No 6).
Section 37AD(1)(b)(iv): amended, on 1 May 2011, by section 16(2) of the Securities Amendment Act 2011 (2011 No 6).
Section 37AD(1)(b)(vii): added, on 28 July 2009, by section 10(1) of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Section 37AD(1A): inserted, on 28 July 2009, by section 10(2) of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Section 37AD(2): amended, on 1 May 2011, by section 16(4) of the Securities Amendment Act 2011 (2011 No 6).

37AE Notice to subscriber for purposes of section 37AC(1)(e)

(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.
Section 37AE: inserted, on 15 April 2004, by section 12 of the Securities Amendment Act 2004 (2004 No 31).

37AF How notice must be given

(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.
Section 37AF: inserted, on 15 April 2004, by section 12 of the Securities Amendment Act 2004 (2004 No 31).
Section 37AF(1)(d)(iia): inserted, on 1 May 2011, by section 56 of the KiwiSaver Amendment Act 2011 (2011 No 8).
Section 37AF(1)(d)(iv): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).

37AG Court may make order for compensation

(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.
Section 37AG: inserted, on 15 April 2004, by section 12 of the Securities Amendment Act 2004 (2004 No 31).

Discretionary relief orders

Heading: inserted, on 15 April 2004, by section 12 of the Securities Amendment Act 2004 (2004 No 31).

37AH When court may make relief order in respect of section 37

(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.
Section 37AH: inserted, on 15 April 2004, by section 12 of the Securities Amendment Act 2004 (2004 No 31).

Transitional provision for relief orders

Heading: inserted, on 15 April 2004, by section 12 of the Securities Amendment Act 2004 (2004 No 31).

37AI Transitional provision for relief orders in respect of section 37

(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.
Section 37AI: inserted, on 15 April 2004, by section 12 of the Securities Amendment Act 2004 (2004 No 31).

Other orders in relation to section 37AH and section 37AI relief orders

Heading: inserted, on 15 April 2004, by section 12 of the Securities Amendment Act 2004 (2004 No 31).

37AJ Other orders that court may make in relation to relief orders under section 37AH or section 37AI

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.
Section 37AJ: inserted, on 15 April 2004, by section 12 of the Securities Amendment Act 2004 (2004 No 31).

Service, rights to appear, and other proceedings

Heading: inserted, on 15 April 2004, by section 12 of the Securities Amendment Act 2004 (2004 No 31).

37AK Service and rights to appear and adduce evidence in respect of section 37

(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.
Section 37AK: inserted, on 15 April 2004, by section 12 of the Securities Amendment Act 2004 (2004 No 31).
Section 37AK(2)(c): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 37AK(3)(d): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 37AK(3)(fa): inserted, on 1 May 2011, by section 56 of the KiwiSaver Amendment Act 2011 (2011 No 8).
Section 37AK(5)(a): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 37AK(5)(ca): inserted, on 1 May 2011, by section 56 of the KiwiSaver Amendment Act 2011 (2011 No 8).

37AL Other proceedings for relief in respect of section 37

(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.
Section 37AL: inserted, on 15 April 2004, by section 12 of the Securities Amendment Act 2004 (2004 No 31).

37A Voidable irregular allotments

(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]
Section 37A: inserted, on 1 September 1983, by section 16 of the Securities Amendment Act 1982 (1982 No 147).
Section 37A(1): substituted, on 1 October 1997, by section 15(1) of the Securities Amendment Act 1996 (1996 No 100).
Section 37A(1)(a): amended, on 1 October 1997, by section 4(1)(a) of the Securities Amendment Act 1997 (1997 No 16).
Section 37A(1)(ab): inserted, on 28 July 2009, by section 11(1) of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Section 37A(1)(ab)(i)(B): substituted, on 1 May 2011, by section 17 of the Securities Amendment Act 2011 (2011 No 6).
Section 37A(1)(ab)(ii): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 37A(1)(b): amended, on 1 October 1997, by section 4(1)(b) of the Securities Amendment Act 1997 (1997 No 16).
Section 37A(1)(c)(i): amended, on 1 October 1997, by section 4(1)(c) of the Securities Amendment Act 1997 (1997 No 16).
Section 37A(1)(c)(ii): amended, on 1 October 1997, by section 4(1)(c) of the Securities Amendment Act 1997 (1997 No 16).
Section 37A(1AA): inserted, on 28 July 2009, by section 11(2) of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Section 37A(1A): inserted, on 1 October 1997, by section 15(1) of the Securities Amendment Act 1996 (1996 No 100).
Section 37A(1A): amended, on 1 October 1997, by section 4(2) of the Securities Amendment Act 1997 (1997 No 16).
Section 37A(1A)(b): amended, on 1 October 1997, by section 4(2) of the Securities Amendment Act 1997 (1997 No 16).
Section 37A(1A)(c)(i): amended, on 1 October 1997, by section 4(2) of the Securities Amendment Act 1997 (1997 No 16).
Section 37A(1A)(d)(i): amended, on 1 October 1997, by section 4(2) of the Securities Amendment Act 1997 (1997 No 16).
Section 37A(2): repealed, on 15 April 2004, by section 13(1) of the 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).
Section 37A(7): amended, on 1 October 1997, by section 4(3) of the Securities Amendment Act 1997 (1997 No 16).
Section 37A(7) proviso: amended, on 3 May 2001, by section 5(c) of the Securities Amendment Act 2001 (2001 No 25).
Section 37A(7) proviso: amended, on 3 May 2001, by section 5(d) of the Securities Amendment Act 2001 (2001 No 25).
Section 37A(8): repealed, on 1 January 2011, by section 58 of the Limitation Act 2010 (2010 No 110).

Relief orders in respect of section 37A

Heading: inserted, on 15 April 2004, by section 14 of the Securities Amendment Act 2004 (2004 No 31).

37B Relief orders in respect of section 37A

(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.
Section 37B: inserted, on 15 April 2004, by section 14 of the Securities Amendment Act 2004 (2004 No 31).

Discretionary relief orders

Heading: inserted, on 15 April 2004, by section 14 of the Securities Amendment Act 2004 (2004 No 31).

37C When court may make relief order in respect of section 37A

(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.
Section 37C: inserted, on 15 April 2004, by section 14 of the Securities Amendment Act 2004 (2004 No 31).

Transitional provision for relief orders

Heading: inserted, on 15 April 2004, by section 14 of the Securities Amendment Act 2004 (2004 No 31).

37D Transitional provision for relief orders in respect of section 37A

(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.
Section 37D: inserted, on 15 April 2004, by section 14 of the Securities Amendment Act 2004 (2004 No 31).

Other orders

Heading: inserted, on 15 April 2004, by section 14 of the Securities Amendment Act 2004 (2004 No 31).

37E Other orders that court may make in relation to relief orders under section 37C or section 37D

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.
Section 37E: inserted, on 15 April 2004, by section 14 of the Securities Amendment Act 2004 (2004 No 31).

Service, rights to appear, and other proceedings

Heading: inserted, on 15 April 2004, by section 14 of the Securities Amendment Act 2004 (2004 No 31).

37F Service and rights to appear and adduce evidence in respect of section 37C or 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.
Section 37F: inserted, on 15 April 2004, by section 14 of the Securities Amendment Act 2004 (2004 No 31).
Section 37F(1)(c): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 37F(1)(ea): inserted, on 1 May 2011, by section 56 of the KiwiSaver Amendment Act 2011 (2011 No 8).

37G Other proceedings for relief in respect of section 37A

(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.
Section 37G: inserted, on 15 April 2004, by section 14 of the Securities Amendment Act 2004 (2004 No 31).

Heading: substituted, on 1 October 1997, by section 16(1) of the Securities Amendment Act 1996 (1996 No 100).

38 Meaning of authorised advertisement

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.
Section 38: substituted, on 1 October 1997, by section 16(1) of the Securities Amendment Act 1996 (1996 No 100).
Section 38(b): substituted, on 1 October 1997, by section 5 of the Securities Amendment Act 1997 (1997 No 16).
Section 38(c): added, on 1 October 1997, by section 5 of the Securities Amendment Act 1997 (1997 No 16).

38AA Meaning of authorised advertisement in relation to offers of debt securities by registered banks

[Repealed]
Section 38AA: repealed, on 1 October 1997, by section 6 of the Securities Amendment Act 1997 (1997 No 16).

38A Statement in advertisement by expert

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.
Section 38A: inserted, on 1 September 1983, by section 18 of the Securities Amendment Act 1982 (1982 No 147).
Section 38A(a): amended, on 3 May 2001, by section 5(d) of the Securities Amendment Act 2001 (2001 No 25).

38B Prohibition of advertisements

(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 summary 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.
Section 38B: inserted, on 1 October 1997, by section 17 of the Securities Amendment Act 1996 (1996 No 100).
Section 38B(1): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 38B(2): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 38B(3): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 38B(4): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 38B(7): substituted, on 1 May 2011, by section 18 of the Securities Amendment Act 2011 (2011 No 6).
Section 38B(8): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).

Investment statements

Heading: inserted, on 1 October 1997, by section 17 of the Securities Amendment Act 1996 (1996 No 100).

38C Meaning of 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.
Section 38C: inserted, on 1 October 1997, by section 17 of the Securities Amendment Act 1996 (1996 No 100).

38D Purpose of investment statement

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.
Section 38D: inserted, on 1 October 1997, by section 17 of the Securities Amendment Act 1996 (1996 No 100).

38E Form and content of investment statement

(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.
Section 38E: inserted, on 1 October 1997, by section 17 of the Securities Amendment Act 1996 (1996 No 100).
Section 38E(1)(c): substituted, on 1 October 1997, by section 7 of the Securities Amendment Act 1997 (1997 No 16).

38F Suspension and prohibition of investment statement

[Repealed]
Section 38F: repealed, on 1 May 2011, by section 19 of the Securities Amendment Act 2011 (2011 No 6).

Prospectuses

39 Form and content of prospectus

(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.
Section 39: substituted, on 1 September 1983, by section 19 of the Securities Amendment Act 1982 (1982 No 147).
Section 39(2): added, on 1 October 1997, by section 18 of the Securities Amendment Act 1996 (1996 No 100).
Section 39(3): added, on 1 October 1997, by section 18 of the Securities Amendment Act 1996 (1996 No 100).

40 Statement in prospectus by expert

(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.
Section 40: substituted, on 1 September 1983, by section 20 of the Securities Amendment Act 1982 (1982 No 147).
Section 40(1)(a): amended, on 3 May 2001, by section 5(d) of the Securities Amendment Act 2001 (2001 No 25).
Section 40(1)(b): amended, on 3 May 2001, by section 5(d) of the Securities Amendment Act 2001 (2001 No 25).

41 Requirements relating to prospectuses delivered to Registrar for registration

(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.
Section 41(1)(b)(i): amended, on 3 May 2001, by section 5(d) of the Securities Amendment Act 2001 (2001 No 25).
Section 41(1)(b)(ii): amended, on 3 May 2001, by section 5(d) of the Securities Amendment Act 2001 (2001 No 25).
Section 41(2): added, on 1 May 2011, by section 20 of the Securities Amendment Act 2011 (2011 No 6).

42 Registration of prospectus

(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.
Section 42: substituted, on 1 May 2011, by section 21 of the Securities Amendment Act 2011 (2011 No 6).

43 Amendment of registered 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).
Section 43: substituted, on 1 May 2011, by section 21 of the Securities Amendment Act 2011 (2011 No 6).

43A Registrar not required to consider certain matters

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.
Section 43A: inserted, on 1 May 2011, by section 21 of the Securities Amendment Act 2011 (2011 No 6).

43B Publication of registration

(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.
Section 43B: inserted, on 1 May 2011, by section 21 of the Securities Amendment Act 2011 (2011 No 6).

FMA's consideration of prospectuses, amendments, trust deeds, and deeds of participation

Heading: inserted, on 1 May 2011, by section 21 of the Securities Amendment Act 2011 (2011 No 6).

43C FMA's consideration of prospectuses, amendments, trust deeds, and deeds of participation

(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.
Section 43C: inserted, on 1 May 2011, by section 21 of the Securities Amendment Act 2011 (2011 No 6).

43D No allotments may be made and no applications or subscription money may be accepted during consideration period

(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).
Section 43D: inserted, on 1 May 2011, by section 21 of the Securities Amendment Act 2011 (2011 No 6).

43E FMA may remove restrictions if its consideration is complete or consideration or further consideration is unnecessary

(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).
Section 43E: inserted, on 1 May 2011, by section 21 of the Securities Amendment Act 2011 (2011 No 6).

43EA FMA may prescribe classes of continuous issue prospectuses to which section 43D(1) applies

(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 regulation for the purposes of the Regulations (Disallowance) Act 1989 and must be presented to the House of Representatives under section 4 of that Act; and
- (b) is a regulation for the purposes of the Acts and Regulations Publication Act 1989.
(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.
Section 43EA: inserted, on 1 May 2011, by section 21 of the Securities Amendment Act 2011 (2011 No 6).

FMA's powers to prohibit distribution of investment statements, prohibit allotments, or cancel registration of prospectuses

Heading: inserted, on 1 May 2011, by section 21 of the Securities Amendment Act 2011 (2011 No 6).

43F Prohibition of distribution of investment statement

(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.
Section 43F: inserted, on 1 May 2011, by section 21 of the Securities Amendment Act 2011 (2011 No 6).

43G FMA may prohibit allotment or cancel registration

(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.
Section 43G: inserted, on 1 May 2011, by section 21 of the Securities Amendment Act 2011 (2011 No 6).

43H Repayment of subscriptions

(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.
Section 43H: inserted, on 1 May 2011, by section 21 of the Securities Amendment Act 2011 (2011 No 6).

43I Order may be made on terms and conditions and may be varied or revoked

(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).
Section 43I: inserted, on 1 May 2011, by section 21 of the Securities Amendment Act 2011 (2011 No 6).

43J Notices and submissions concerning exercise of power under section 43F, 43G, or 43I(2) or (3)

(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
- (c) it may give public notice by any other means of the matters in paragraph (b); and
- (d) it may notify any other person of the matters in paragraph (b).
(3) If the FMA varies or revokes an order under section 43I,—
- (a) it must, immediately after exercising the power, notify the Registrar and the issuer of—
  - (i) the terms and conditions of the variation or revocation; and
  - (ii) the reasons for the variation or revocation; and
  - (iii) any other information the FMA thinks relevant in the circumstances; and
- (b) it may give notice on its Internet site or give public notice by any other means of those matters; and
- (c) it may notify any other person of those matters.
Section 43J: inserted, on 1 May 2011, by section 21 of the Securities Amendment Act 2011 (2011 No 6).

43K FMA may make interim orders pending exercise of powers

(1) The FMA may make an interim order that prohibits the allotment of securities—
- (a) to which an investment statement relates while the interim order is in force if—
  - (i) the FMA is considering, at any time, whether it may exercise a power under section 43F in respect of the investment statement; and
  - (ii) the FMA considers that making an interim order is desirable in the public interest:
- (b) under a registered prospectus while the interim order is in force if—
  - (i) the FMA is considering, at any time, whether it may exercise a power under section 43G in respect of the prospectus; and
  - (ii) the FMA considers that making an interim order is desirable in the public interest.
(2) An interim order under subsection (1) is in force from the time at which it is made until the close of—
- (a) the date that is 15 working days after the day on which it is made; or
- (b) a later date specified by the FMA by notice to the issuer.
(3) For the purposes of subsection (2)(b),—
- (a) the FMA may specify a later date if the FMA is of the opinion that it is not reasonably practicable for it to complete its consideration as referred to in subsection (1)(a)(i) or (b)(i) within the 15-working-day period referred to in subsection (2)(a):
- (b) the later date must be a date that is no more than 30 working days after the day on which the interim order is made.
(4) The FMA—
- (a) may act under subsection (1) or (2)(b) without giving the issuer an opportunity to make submissions to, or be heard before, the FMA in respect of the matter; but
- (b) must, after acting under subsection (1) or (2)(b), give the issuer or the issuer's representative an opportunity to make written submissions and to be heard on the matter.
(5) If an interim order is made in respect of an investment statement or a registered prospectus,—
- (a) the FMA must immediately after making the order notify the issuer and the Registrar that the order has been made and the reasons for the order; and
- (b) 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 investment statement or prospectus relates); and
- (c) section 37(1B) and (4) to (7) apply (which provide that an allotment of a security in contravention of paragraph (b) is invalid and of no effect).
Section 43K: inserted, on 1 May 2011, by section 21 of the Securities Amendment Act 2011 (2011 No 6).

43L FMA may revoke interim order

(1) The FMA may revoke an interim order made under section 43K if it is satisfied that the order should not continue in force.
(2) If an interim order is revoked, the FMA must immediately notify the issuer and the Registrar of the revocation.
Section 43L: inserted, on 1 May 2011, by section 21 of the Securities Amendment Act 2011 (2011 No 6).

43M Nothing done or omitted to be done by Registrar or FMA guarantees or represents that prospectus complies with Act and regulations

(1) Nothing done or omitted to be done under this Act by the Registrar or the FMA guarantees or represents that—
- (a) a prospectus—
  - (i) complies with this Act and the regulations:
  - (ii) does not contain any material misdescription or error or any material matter that is not clearly legible:
  - (iii) is not false or misleading as to a material particular:
  - (iv) does not omit any material particular; or
- (b) the FMA has considered a prospectus with a view to determining whether it—
  - (i) complies with this Act and the regulations:
  - (ii) contains any material misdescription or error or any material matter that is not clearly legible:
  - (iii) is false or misleading as to a material particular:
  - (iv) omits any material particular.
(2) This section does not limit section 22 of the Financial Markets Authority Act 2011 (which provides protection from liability for the FMA and its members and employees).
Section 43M: inserted, on 1 May 2011, by section 21 of the Securities Amendment Act 2011 (2011 No 6).

44 Suspension and cancellation of registration of registered prospectus

[Repealed]
Section 44: repealed, on 1 May 2011, by section 21 of the Securities Amendment Act 2011 (2011 No 6).

Delayed allotment orders and prohibition orders concerning simplified disclosure prospectuses

Heading: inserted, on 28 July 2009, by section 12 of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).

44A FMA may make delayed allotment orders

(1) This section applies if the FMA is of the opinion that the issuer of a security that is offered in a simplified disclosure prospectus—
- (a) has disclosed information in the prospectus that has not previously been publicly disclosed under the issuer's disclosure obligations, and that information is adverse to the issuer or the scheme and is material to the offer of the security; or
- (b) has disclosed information under the issuer's disclosure obligations between the date of the prospectus and the allotment date, and that information is adverse to the issuer or the scheme and is material to the offer of the security; or
- (c) has failed to comply with the issuer's disclosure obligations at any time during the previous 12 months.
(2) If either subsection (1)(a) or (b) applies, the FMA may, if it considers that it is desirable in the public interest, make an order delaying the date of allotment for the securities that are offered in a simplified disclosure prospectus for a period not exceeding 14 days from the date of allotment stated in the terms of the offer.
(3) If subsection (1)(c) applies, the FMA may, if it considers that it is desirable in the public interest, make an order delaying the date of allotment for the securities that are offered in a simplified disclosure prospectus until a date not exceeding the later of—
- (a) 14 days after the date of allotment stated in the terms of the offer; or
- (b) 14 days after the date on which the issuer's failure to comply with the issuer's disclosure obligations is remedied.
(4) The FMA may make a delayed allotment order on the terms and conditions that the FMA thinks fit (which may include a condition that the issuer disclose or give public notice of specified information in any manner that the FMA thinks fit in the circumstances).
(5) The FMA may vary a delayed allotment order in the same way as it may make the order.
(6) The FMA may revoke a delayed allotment order, on the terms and conditions it thinks fit, if it is satisfied that it should not continue in force.
(7) In this section, issuer's disclosure obligations means the disclosure obligations that an issuer is subject to and that the issuer has relied on in order to permit the issuer to use a simplified disclosure prospectus in accordance with the regulations and the definition of simplified disclosure prospectus.
Section 44A: substituted, on 28 July 2009, by section 12 of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Section 44A heading: amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 44A(1): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 44A(2): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 44A(3): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 44A(4): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 44A(5): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 44A(6): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).

44AB Notices and submissions concerning delayed allotment orders

(1) The FMA may make a delayed allotment order only if—
- (a) the FMA gives the issuer at least 3 working days' written notice of the following matters before the FMA makes the delayed allotment order:
  - (i) that the FMA is considering making a delayed allotment order; and
  - (ii) the paragraph of section 44A(1) that is alleged to apply to the issuer; and
  - (iii) the reasons why the FMA is considering making a delayed allotment order; 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 makes a delayed allotment order,—
- (a) it must, immediately after the making of the order, notify the issuer of—
  - (i) the terms and conditions of the order; and
  - (ii) the reasons for the order; and
- (b) it must, immediately after the making of the order, give notice on its Internet site of—
  - (i) the terms and conditions of the order; and
  - (ii) the reasons for the order; and
  - (iii) the information that is adverse to the issuer or the scheme and is material to the offer of the security, or the nature of the issuer's failure to comply with the issuer's disclosure obligations; and
  - (iv) any other information the FMA thinks relevant in the circumstances; and
- (c) it may give public notice by any other means of the matters in paragraph (b); and
- (d) it may notify any other person of the matters in paragraph (b).
(3) If the FMA varies or revokes a delayed allotment order under section 44A(5) or (6),—
- (a) it must immediately notify the issuer of—
  - (i) the terms and conditions of the variation or revocation; and
  - (ii) the reasons for the variation or revocation; and
- (b) it may give notice on its Internet site or give public notice by any other means of those matters; and
- (c) it may notify any other person of those matters.
Section 44AB: inserted, on 28 July 2009, by section 12 of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Section 44AB(1): substituted, on 1 May 2011, by section 23 of the Securities Amendment Act 2011 (2011 No 6).
Section 44AB(2): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 44AB(2)(b)(iv): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 44AB(3): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).

44AC Limited notice and submissions for urgent delayed allotment orders

If the FMA thinks it necessary or desirable in the public interest for a delayed allotment order to be made more urgently than section 44AB permits,—
- (a) it may give less than 3 working days' notice before it makes the order, and the notice and the submissions may be oral rather than written; but
- (b) it must include in that notice the reasons for acting urgently and must otherwise comply with that section.
Section 44AC: inserted, on 28 July 2009, by section 12 of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Section 44AC: amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 44AC(a): substituted, on 1 May 2011, by section 24 of the Securities Amendment Act 2011 (2011 No 6).

44AD Effect of delayed allotment orders

(1) No allotment of a security that is offered in a simplified disclosure prospectus to which a delayed allotment order applies may be made—
- (a) in contravention of the terms or conditions of the delayed allotment order or of its revocation; or
- (b) if a term or condition of the delayed allotment order remains unfulfilled; or
- (c) until after the delayed allotment order expires or is revoked.
(2) If a person contravenes subsection (1), section 37(1A)(b) and (4) to (7) apply (which provide that an allotment of a security that is offered in a simplified disclosure prospectus in contravention of subsection (1) is invalid and of no effect).
(3) If the FMA makes a delayed allotment order and a subscriber has subscribed for a security that is offered in a simplified disclosure prospectus to which that delayed allotment order applies before the FMA made the delayed allotment order, section 37A(1)(ab)(ii) and (3) to (8) apply (which provide that an allotment of a security in those circumstances is voidable at the instance of the subscriber by notice in writing).
Example
Issuer A makes an offer of securities to the public for subscription in a simplified disclosure prospectus. Tom subscribes for some of those securities. After Tom has subscribed for the securities, the FMA makes a delayed allotment order that applies to the simplified disclosure prospectus. Section 37A(1)(ab)(ii) and (3) to (8) apply.
In these circumstances, Issuer A's options may include the following:
- (a) Issuer A may ask Tom if he wants to resubscribe for the securities. In this case, Issuer A could obtain Tom's permission to use the money that Tom paid Issuer A when he originally subscribed for the securities (Tom's subscription money) to resubscribe for those securities after the date on which the delayed allotment order was made. Issuer A may then allot those securities to Tom (once the delayed allotment order has expired or has been revoked) without contravening section 37A(1)(ab)(ii); or
- (b) Issuer A could withdraw the offer or take some other similar course of action. If Issuer A withdraws the offer it must pay Tom's subscription money back to him. Tom's subscription money must be held in trust for him until it is repaid (see section 36A); or
- (c) Issuer A could allot the securities to Tom (once the delayed allotment order has expired or has been revoked) without Tom having resubscribed for the securities. In this case, the allotment would be valid (see section 37A(5)), but it is voidable at the instance of Tom (see section 37A(3)) and Issuer A has committed an offence (see sections 37A(1)(ab)(ii) and 59(1)).
Tom's options include the following:
- (a) Tom may decide to leave Tom's subscription money with Issuer A and use that money to resubscribe for the securities. If Issuer A agrees to this, Issuer A may allot those securities to Tom (once the delayed allotment order has expired or has been revoked) without contravening section 37A(1)(ab)(ii); or
- (b) Tom may require Issuer A to pay Tom's subscription money back to him. Tom's subscription money must be held in trust for him until it is repaid (see section 36A); or
- (c) Tom may decide to take no action at all. In this case, if Issuer A allots the securities to Tom (once the delayed allotment order has expired or has been revoked), the allotment would be valid (see section 37A(5)), but it is voidable at the instance of Tom (see section 37A(3)) and Issuer A has committed an offence (see sections 37A(1)(ab)(ii) and 59(1)). If Issuer A does not allot the securities to Tom, Issuer A must pay Tom's subscription money back to him (see section 36A).
Regardless of which option is taken by Issuer A or Tom, if Issuer A allots securities to Tom in contravention of section 44AD(1) (for example, by allotting the securities to Tom before the delayed allotment order has expired or has been revoked), that allotment is invalid and of no effect (see sections 44AD(1), (2), and (4) and 37(1A)(b) and (4) to (7)) and Issuer A has committed offences (see sections 59(1) and 60(2)).
(4) Subsections (1) and (2) override subsection (3).
(5) This section applies despite anything in the terms of the offer.
Section 44AD: inserted, on 28 July 2009, by section 12 of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Section 44AD(3): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 44AD(3) example: amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).

44AE FMA may make prohibition orders

(1) If the FMA is satisfied that a person (person A) who is subject to a disclosure obligation has failed to comply with that obligation at any time during the previous 12 months, the FMA may, if it considers that it is desirable in the public interest, make an order prohibiting person A from using a simplified disclosure prospectus for a period not exceeding 24 months.
(2) The FMA may make a prohibition order on the terms and conditions that the FMA thinks fit.
(3) The FMA may vary a prohibition order in the same way as it may make the order.
(4) The FMA may, either of its own volition or on the application of the person concerned, revoke or suspend a prohibition order, on the terms and conditions it thinks fit, if it is satisfied that it should not continue in force.
Section 44AE: inserted, on 28 July 2009, by section 12 of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Section 44AE heading: amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 44AE(1): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 44AE(2): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 44AE(3): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 44AE(4): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).

44AF Notices and submissions concerning prohibition orders

(1) The FMA may make a prohibition order only if—
- (a) the FMA gives the person concerned (person A) at least 10 working days' written notice of the following matters before the FMA makes the prohibition order:
  - (i) that the FMA is considering making a prohibition order; and
  - (ii) the nature of person A's failure to comply with his, her, or its disclosure obligations; and
  - (iii) the reasons why the FMA is considering making the prohibition order; and
- (b) the FMA gives person A or person A's representative an opportunity to make written submissions and to be heard on the matter within that notice period.
(2) If the FMA makes a prohibition order,—
- (a) it must, immediately after the making of the order, notify person A of—
  - (i) the terms and conditions of the order; and
  - (ii) the reasons for the order; and
- (b) it must, immediately after the making of the order, give notice on its Internet site of—
  - (i) the terms and conditions of the order; and
  - (ii) the reasons for the order; and
  - (iii) the nature of person A's failure to comply with his, her, or its disclosure obligations; and
  - (iv) any other information the FMA thinks relevant in the circumstances; and
- (c) it may give public notice by any other means of the matters in paragraph (b); and
- (d) it may notify any other person of the matters in paragraph (b).
(3) If the FMA varies, revokes, or suspends a prohibition order under section 44AE(3) or (4),—
- (a) it must immediately notify person A of—
  - (i) the terms and conditions of the variation, revocation, or suspension; and
  - (ii) the reasons for the variation, revocation, or suspension; and
- (b) it may give notice on its Internet site or give public notice by any other means of those matters; and
- (c) it may notify any other person of those matters.
Section 44AF: inserted, on 28 July 2009, by section 12 of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Section 44AF(1): substituted, on 1 May 2011, by section 25 of the Securities Amendment Act 2011 (2011 No 6).
Section 44AF(2): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 44AF(2)(b)(iv): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 44AF(3): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).

44AG Effect of prohibition orders

If the FMA makes a prohibition order,—
- (a) a person who is prohibited by that order from using a simplified disclosure prospectus must not, while the prohibition order is in force,—
  - (i) make an offer of securities to the public in, or accompanied by, a simplified disclosure prospectus; or
  - (ii) distribute a simplified disclosure prospectus that relates to a security; or
  - (iii) allot securities offered in a simplified disclosure prospectus; and
- (b) section 37(1A)(a) and (4) to (7) apply (which provide that an allotment of a security that is offered in a simplified disclosure prospectus by a person who is subject to a prohibition order while that order is in force is invalid and of no effect).
Section 44AG: inserted, on 28 July 2009, by section 12 of the Securities (Disclosure) Amendment Act 2009 (2009 No 23).
Section 44AG: amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).

Contributory mortgages

Heading: inserted, on 1 October 1997, by section 21 of the Securities Amendment Act 1996 (1996 No 100).

44B FMA's powers in respect of contributory mortgages

(1) Where the Registrar receives a report from an auditor appointed pursuant to regulations made under this Act to the effect that a contributory mortgage broker is contravening, or has contravened, any of the provisions of this Act or regulations made under this Act, the Registrar may forward a copy of that report to the FMA.
(2) The FMA may, either on the receipt of that report or for any other reason, if it is satisfied that a contributory mortgage broker is contravening, or has contravened, any of the provisions of this Act or the regulations, and that it is desirable in the public interest to do so, exercise any 1 or more of the following powers:
- (a) make an order prohibiting the contributory mortgage broker from offering interests in contributory mortgages to the public for subscription for a period not exceeding 10 working days; or
- (b) make an order prohibiting the contributory mortgage broker from offering interests in contributory mortgages to the public for subscription for the period that the FMA thinks fit; or
- (c) make an order that the contributory mortgage broker must promptly cease to act as contributory mortgage broker in respect of all or any contributory mortgages that have previously been allotted by him, her, or it, and make an order appointing another person to act as contributory mortgage broker in his, her, or its place with respect to those contributory mortgages; or
- (d) make an order removing any of the directors of any nominee company of the contributory mortgage broker and make an order appointing any person as a director in his or her place.
(2A) The FMA—
- (a) may act under subsection (2)(a) without giving the contributory mortgage broker an opportunity to make submissions to, and be heard before, the FMA in respect of the matter; but
- (b) must, after acting under subsection (2)(a), give the contributory mortgage broker or the contributory mortgage broker's representative an opportunity to make written submissions and to be heard on the matter.
(2B) The FMA may make an order under subsection (2)(b) to (d) only if—
- (a) the FMA gives the relevant person or persons at least 5 working days' written notice of the following matters before the FMA makes the order:
  - (i) that the FMA is considering making an order under subsection (2)(b), (c), or (d) (as the case may be); and
  - (ii) the reasons why it is considering making the order; and
- (b) the FMA gives the relevant person or persons or a representative of the relevant person or persons an opportunity to make written submissions and to be heard on the matter within that notice period.
(2C) In subsection (2B), relevant person or persons means,—
- (a) in the case of subsection (2)(b) or (c), the contributory mortgage broker:
- (b) in the case of subsection (2)(d), the contributory mortgage broker and every director of the broker's nominee company.
(3) Where the FMA makes an order under subsection (2)—
- (a) it shall forthwith notify the broker of the order and the reasons therefor; and
- (b) it may notify any other person or persons of the order and the reasons therefor.
(4) Any such order made by the FMA under subsection (2) may be made upon such terms and conditions as the FMA sees fit and shall have effect according to its tenor.
Section 44B: inserted, on 1 September 1983, by section 24 of the Securities Amendment Act 1982 (1982 No 147).
Section 44B heading: amended, on 1 May 2011, by section 84(5) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 44B(1): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 44B(2): substituted, on 1 May 2011, by section 26 of the Securities Amendment Act 2011 (2011 No 6).
Section 44B(2A): inserted, on 1 May 2011, by section 26 of the Securities Amendment Act 2011 (2011 No 6).
Section 44B(2B): inserted, on 1 May 2011, by section 26 of the Securities Amendment Act 2011 (2011 No 6).
Section 44B(2C): inserted, on 1 May 2011, by section 26 of the Securities Amendment Act 2011 (2011 No 6).
Section 44B(3): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).
Section 44B(4): amended, on 1 May 2011, by section 84(3) of the Financial Markets Authority Act 2011 (2011 No 5).

44C Powers and duties of persons appointed to act as broker

(1) Where a person (in this section called the appointee) has been appointed by the FMA to act as a contributory mortgage broker in respect of contributory mortgages under section 44B(2)(c), the appointee shall have and may exercise all the powers of the contributory mortgage broker he or she is appointed to replace (in this section called the defaulting broker), including, but without limitation, the following powers—
- (a) to take and to retain possession of all property, whatsoever and wheresoever situated, of the defaulting broker and his or her nominee company relating to the contributory mortgages which were being managed by the defaulting broker (in this section called the mortgages) and to hold and administer that property for the benefit of the contributors to the mortgages in their respective rights and interests:
- (b) to demand and receive all money payable to the defaulting broker on account of the mortgages:
- (c) to sue for and recover all debts due and other money payable to the defaulting broker on account of the mortgages:
- (d) to pay over, in the discretion of the appointee, and in such manner and to such extent as he or she thinks fit, any money received by him or her in his or her capacity as appointee, whether arising from real or personal property and whether capital or income, for any purpose for or to which the defaulting broker might lawfully have applied that money:
- (e) to carry out and perform contracts relating to the mortgages entered into by the defaulting broker before the appointment of the appointee:

New Zealand Legislation: Acts

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Securities Act 1978 No 103 (as at 01 October 2011), Public Act

Securities Act 1978

Note

Contents

1 Short Title and commencement

2 Interpretation

2A Meaning of advertisement

2B Meaning of due enquiry

2C Meaning of qualified auditor

2D Meaning of security

3 Construction of references to offering securities to the public

3A Status of examples

4 Application of this Act

5 Exemptions from this Act

5A Exemption for employer superannuation schemes

5B Conditions of exemption for employer superannuation schemes

5C Definitions for the purposes of sections 5A to 5C

6 Previously allotted securities

6A Term implied in certain offers of previously allotted securities

7 Territorial scope of Part 2

7A Temporary exemption for superannuation schemes

7B Terms and conditions of authorisation

8 Act to bind Crown

Part 1Securities Commission

9 Securities Commission

10 Functions of Commission

11 Membership of Commission

12 Appointment of member to exercise powers of chairperson

13 Term of office of members

14 Remuneration of members

14A Travelling allowances and expenses

14B Commission may act by divisions

14C Membership, chairperson, meetings, and resolutions of division

14D Powers of division

15 Meetings of Commission

15A Completion of proceedings where member unable to attend meeting

16 Assent to resolution without a meeting

17 General powers of Commission

17A Sharing of information with Takeovers Panel

17B Sharing of information with Commerce Commission

18 Powers of Commission to take evidence

18A Commission may take evidence for overseas commission or body

19 Provisions relating to certain proceedings before Commission

20 Employees of Commission

21 Employment of experts

22 Superannuation or retiring allowances

23 Application of certain Acts to members and staff of Commission

24 Members of Commission and staff deemed to be officials

25 Commission may state case for opinion of High Court

26 Appeals to High Court on questions of law only

27 Restrictions on delegation

28 Protection from liability for Commission and members, officers, and employees

28A Commission may publish reports

29 Evidence of resolution of Commission

30 Annual reports

31 Money to be appropriated by Parliament for purposes of this Act

31A Funds of Commission

31B Bank accounts

31C Auditor-General to be auditor of Commission

31CA Crown entity

31D Investment of money

31E Exemption from income tax

32 Offences

Part 2Restrictions on offer and allotment of securities to the public

33 Restrictions on offer of securities to the public

34 Restrictions on distribution of prospectuses

35 Restrictions on door-to-door sales

36 Restrictions on advertising of otherwise exempt securities

36A Subscriptions must be held in trust

37 Void irregular allotments

Relief orders in respect of section 37

37AA Applications for relief orders in respect of section 37

37AB Effect of relief order in respect of section 37

Mandatory relief orders

37AC Court must make relief order in certain circumstances

37AD Consent for purposes of section 37AC(1)(c) or (d)

37AE Notice to subscriber for purposes of section 37AC(1)(e)

37AF How notice must be given

Part 1
Securities Commission

Part 2
Restrictions on offer and allotment of securities to the public