New Zealand Legislation: Regulations
Regulations are laws made under Acts
(1) This clause applies if the holder of a convertible security referred to in clause 11(1A)(b) is entitled to elect to convert that security, whether or not the issuer also has rights in relation to the conversion of the security.
(2) If this clause applies, the exemption in clause 11 from section 37A(1)(b) of the Act is subject to the following conditions:
(a) that the investment statement relating to both the convertible securities and the new securities includes the following:
(i) a statement to the effect that changes of circumstance occurring between the date of the allotment of the convertible securities and the conversion date of those securities may have a material effect on the new securities (including their price) or the issuer:
(ii) a statement that important information relating to the securities (including their price) and the issuer will be disclosed in accordance with the continuous disclosure provisions of the listing rules of each specified securities market on which the convertible security is quoted:
(iii) notice that, between 5 and 10 working days before the earliest date on which the election to convert may be made, a pre-conversion statement—
(A) will be provided to the operator of each specified securities market on which the convertible security is quoted, for release to the market; and
(B) will be available on the issuer's Internet site:
(iv) notice of what the pre-conversion statement will contain, as described in subclause (3):
(v) a statement that holders of the convertible securities should consider the pre-conversion statement, the market price of the new securities, and all other information made available concerning the new securities and the issuer, before an election to convert is made:
(b) that the issuer makes a pre-conversion statement that complies with subclause (3) available—
(i) to the operator of each specified securities market on which the convertible security is quoted, for release to the market, between 5 and 10 working days before the earliest date on which the election to convert may be made; and
(ii) following its release to the market, on the issuer's Internet site:
(c) that no new securities may be allotted if, at the time of allotment, the investment statement, taken together with the pre-conversion statement, is known by the issuer, 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, whenever those adverse circumstances occurred.
(3) The pre-conversion statement must include the following, set out in a succinct manner:
(a) a statement to the effect that the purpose of the pre-conversion statement is to assist registered holders of convertible securities to decide whether to elect to convert those securities:
(b) a description of any adverse circumstances (whenever they occurred) that make the investment statement false or misleading in a material particular by reason of failing to refer, or give proper emphasis, to those circumstances:
(c) a description of the effect of any adverse circumstances, to the extent that the effect can be assessed, or, where the effect of the adverse circumstances cannot be assessed, a statement to that effect:
(d) a list of any other documents that are, in the opinion of the issuer, relevant to a decision about whether to elect to convert, in which case the documents must either be included in the pre-conversion statement or the pre-conversion statement must clearly indicate where those documents may be viewed and how they may be accessed:
(e) a statement by the issuer that the pre-conversion statement is not known by the issuer, 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.
Clause 13: added, on 21 December 2007, by clause 8 of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice (No 2) 2007 (SR 2007/405).
