New Zealand Legislation: Regulations

21 Interest rates and taxation of interest

• (1) No registered prospectus or advertisement shall state the rate or rates of interest that may be earned by holding securities unless the registered prospectus or advertisement states any minimum amount or amounts of the securities that would have to be held, and any minimum period or periods during which the securities would have to be held, in order to earn that rate or those rates.

  (2) No advertisement (other than as required by clause 9(1)(d) of Schedule 3D) must—

  • (a) State a rate of interest payable in respect of a security that has been adjusted for the purposes of taking into account the incidence of taxation of the interest; or

  • (b) Otherwise refer to the taxation of interest earned by holding securities,—

  except that, subject to regulations 8 and 9 of these regulations, an advertisement may include a statement to the effect that in certain circumstances there may be tax advantages in holding the securities referred to in the advertisement and that (where a registered prospectus or disclosure statement is referred to in the advertisement) there is set out in the prospectus or disclosure statement a full statement of those advantages.

  (3) No registered prospectus shall refer to any liability for taxation of interest payable in respect of a security unless the registered prospectus makes it clear that the liability is that prescribed by current enactments.

  Subclause (2) was amended, as from 1 January 1996, by regulation 7 Securities Regulations 1983, Amendment No 2 (SR 1995/285), by inserting, after the word “prospectus”, in both places where it appears, the words “or disclosure statement”.

  Subclause (2) (that part before paragraph (a)) was substituted, as from 1 October 1997, by regulation 13 Securities Amendment Regulations 1997 (SR 1997/151). See regulation 99 of those Regulations for the transitional provisions.