Securities (Disclosure) Amendment Act 2009

  • repealed
  • Securities (Disclosure) Amendment Act 2009: repealed, on 1 December 2014, pursuant to section 4(1)(a) of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).

Reprint
as at 1 December 2014

Coat of Arms of New Zealand

Securities (Disclosure) Amendment Act 2009

Public Act2009 No 23
Date of assent27 July 2009
Commencementsee section 2
  • Securities (Disclosure) Amendment Act 2009: repealed, on 1 December 2014, pursuant to section 4(1)(a) of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).


Note

Changes authorised by subpart 2 of Part 2 of the Legislation Act 2012 have been made in this official reprint.

Note 4 at the end of this reprint provides a list of the amendments incorporated.

This Act is administered by the Ministry of Business, Innovation, and Employment.


The Parliament of New Zealand enacts as follows:

1 Title
  • This Act is the Securities (Disclosure) Amendment Act 2009.

2 Commencement
  • This Act comes into force on the day after the date on which it receives the Royal assent.

3 Principal Act amended
4 Interpretation
  • Section 2(1) is amended by inserting the following definitions in their appropriate alphabetical order:

    delayed allotment order means an order made by the Commission under section 44A(2) or (3) that delays the date of allotment of a security that is offered in a simplified disclosure prospectus

    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

    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

    prohibition order means an order made by the Commission under section 44AE(1) that prohibits a person from using a simplified disclosure prospectus

    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.

5 Construction of references to offering securities to the public
  • (1) Section 3(2)(a) is amended by inserting the following subparagraph after subparagraph (iia):

    • (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:.

    (2) Section 3(8) is amended by inserting or (iib) after subsection (2)(a)(iia).

    (3) Section 3(9) is amended by adding or (iib).

6 New section 3A inserted
  • The following section is inserted after section 3:

    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.

7 Exemptions from this Act
  • (1) Section 5(1)(d) is amended by omitting 1952): and substituting 1952); or.

    (2) Section 5(2CA)(a)(ii) is amended by inserting or, if the securities are to be offered in a simplified disclosure prospectus, a copy of that prospectus after investment statement.

    (3) Section 5(2CB)(a) is amended by inserting in New Zealand after the only persons.

    (4) Section 5 is amended by inserting the following subsection after subsection (2CB):

    • (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).

    (5) Section 5(2CC) is amended by omitting subsection (2CB) and substituting subsections (2CB) and (2CBA).

    (6) Section 5(2CD) is amended by omitting 6 months and substituting 12 months.

    (7) Section 5 is amended by inserting the following subsection after subsection (2CD):

    • (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.

    (8) Section 5(2CE) is amended by repealing paragraph (c) and substituting the following paragraph:

    • (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.

8 Restrictions on distribution of prospectuses
  • Section 34 is amended by adding the following subsection:

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

9 Void irregular allotments
  • Section 37 is amended by inserting the following subsection after subsection (1):

    • (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).

10 Consent for purposes of section 37AC(1)(c) or (d)
  • (1) Section 37AD(1)(b) is amended by adding the following subparagraph:

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

    (2) Section 37AD is amended by inserting the following subsection after subsection (1):

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

11 Voidable irregular allotments
  • (1) Section 37A(1) is amended by inserting the following paragraph after paragraph (a):

    • (ab) in the case of a security that is offered in a simplified disclosure prospectus,—

      • (i) the subscriber did not receive, before subscribing for the security, a copy of—

        • (A) that simplified disclosure prospectus; and

        • (B) every memorandum of amendments to that prospectus that is registered by the Registrar under section 43 before the time of allotment; or

      • (ii) the Commission made a delayed allotment order in relation to that simplified disclosure prospectus and the subscriber subscribed for the security before the delayed allotment order was made; or.

    (2) Section 37A is amended by inserting the following subsection after subsection (1):

    • (1AA) However, subsection (1)(a) does not apply to securities that are offered in a simplified disclosure prospectus.

    (3) Section 37A(3) is amended by omitting shall (whether or not the issuer is being in liquidation) be and substituting is (whether or not the issuer is in liquidation).

12 New heading and sections 44A to 44AG inserted
  • The following heading and sections are inserted after section 44:

    Delayed allotment orders and prohibition orders concerning simplified disclosure prospectuses

    44A Commission may make delayed allotment orders
    • (1) This section applies if the Commission 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 Commission 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 Commission 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 Commission may make a delayed allotment order on the terms and conditions that the Commission thinks fit (which may include a condition that the issuer disclose or give public notice of specified information in any manner that the Commission thinks fit in the circumstances).

      (5) The Commission may vary a delayed allotment order in the same way as it may make the order.

      (6) The Commission 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.

    44AB Notices and submissions concerning delayed allotment orders
    • (1) The Commission may make a delayed allotment order only if—

      • (a) the Commission gives the issuer at least 3 days' written notice of the following matters before the Commission makes the delayed allotment order:

        • (i) the paragraph of section 44A(1) that is alleged to apply to the issuer; and

        • (ii) the proposed terms and conditions of the delayed allotment order; and

        • (iii) the reasons for the proposed delayed allotment order; and

      • (b) the Commission gives the issuer an opportunity to make a written submission within that notice period; and

      • (c) the Commission has regard to any written submissions made to it within that notice period.

      (2) If the Commission 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 Commission 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 Commission 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.

    44AC Limited notice and submissions for urgent delayed allotment orders
    • If the Commission 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 days' notice before it makes the order, and the notice and submissions may be oral, not written; but

      • (b) it must include in that notice the reasons for acting urgently and must otherwise comply with that section.

    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 Commission 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 Commission 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 Commission 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.

    44AE Commission may make prohibition orders
    • (1) If the Commission 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 Commission 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 Commission may make a prohibition order on the terms and conditions that the Commission thinks fit.

      (3) The Commission may vary a prohibition order in the same way as it may make the order.

      (4) The Commission 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.

    44AF Notices and submissions concerning prohibition orders
    • (1) The Commission may make a prohibition order only if—

      • (a) the Commission gives the person concerned (person A) at least 14 days' written notice of the following matters before the Commission makes the prohibition order:

        • (i) the nature of person A's failure to comply with his, her, or its disclosure obligations; and

        • (ii) the proposed terms and conditions of the prohibition order; and

        • (iii) the reasons for the proposed prohibition order; and

      • (b) the Commission gives person A an opportunity to make a written submission within that notice period; and

      • (c) the Commission has regard to any written submissions made to it within that notice period.

      (2) If the Commission 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 Commission 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 Commission 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.

    44AG Effect of prohibition orders
    • If the Commission 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).

13 Registration of trust deeds and deeds of participation
  • Section 46(3) is amended by omitting under his or her hand.

14 Power of Court to grant relief in certain cases
  • (1) Section 63(1)(a) is amended by omitting securities; and substituting securities; or.

    (2) Section 63(1)(b) is amended by omitting advertisement; and substituting advertisement; or.

15 Regulations and Orders in Council
  • Section 70(1) is amended by inserting the following paragraph after paragraph (ca):

    • (d) specifying obligations that are disclosure obligations for the purposes of this Act:.


Reprints notes
1 General
  • This is a reprint of the Securities (Disclosure) Amendment Act 2009 that incorporates all the amendments to that Act as at the date of the last amendment to it.

2 Legal status
  • Reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by any amendments to that enactment. Section 18 of the Legislation Act 2012 provides that this reprint, published in electronic form, has the status of an official version under section 17 of that Act. A printed version of the reprint produced directly from this official electronic version also has official status.

3 Editorial and format changes
4 Amendments incorporated in this reprint
  • Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70): section 4(1)(a)