Securities Act (Rights, Options, and Convertible Securities) Exemption Notice 2002

  • revoked
  • Securities Act (Rights, Options, and Convertible Securities) Exemption Notice 2002: revoked, on 1 April 2013, by clause 15 of the Securities Act (Rights, Options, and Convertible Securities) Exemption Notice 2013 (SR 2013/65).

Reprint
as at 1 April 2013

Coat of Arms of New Zealand

Securities Act (Rights, Options, and Convertible Securities) Exemption Notice 2002

(SR 2002/318)

  • Securities Act (Rights, Options, and Convertible Securities) Exemption Notice 2002: revoked, on 1 April 2013, by clause 15 of the Securities Act (Rights, Options, and Convertible Securities) Exemption Notice 2013 (SR 2013/65).


Note

Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this reprint.

A general outline of these changes is set out in the notes at the end of this reprint, together with other explanatory material about this reprint.

This notice is administered by the Financial Markets Authority.


Pursuant to the Securities Act 1978, the Securities Commission gives the following notice.

Notice

1 Title
  • This notice is the Securities Act (Rights, Options, and Convertible Securities) Exemption Notice 2002.

2 Commencement
  • This notice comes into force on 1 October 2002.

3 Expiry
  • This notice expires on the close of 31 March 2013.

    Clause 3: amended, on 28 September 2012, by clause 3 of the Securities Act (Extension of Term, Amendment, and Transitional Provision) Exemption Notice 2012 (SR 2012/294).

4 Interpretation
  • (1) In this notice, unless the context otherwise requires,—

    Act means the Securities Act 1978

    convertible security means any option, share warrant, convertible note, preference share, or preference unit

    registered holder means the person shown as the holder of the security in the register of securities kept by the issuer in accordance with section 51 of the Act

    Regulations means the Securities Regulations 2009

    share warrant means a warrant stating that the bearer of the warrant is entitled to the shares specified in the warrant, being shares for which no amount is payable to the issuer of the shares

    specified securities market means a securities market operated by New Zealand Exchange Limited or by ASX Limited, a company incorporated in Australia.

    (2) In this notice, a reference to an option, share warrant, convertible note, preference share, or preference unit includes a reference to a security that is in the nature of an option, share warrant, convertible note, preference share, or preference unit.

    (3) Any term or expression that is defined in the Act or the Regulations and used, but not defined, in this notice has the same meaning as in the Act or the Regulations.

    Clause 4(1) convertible security: inserted, on 29 May 2009, by clause 4 of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice 2009 (SR 2009/149).

    Clause 4(1) NZSE: revoked, on 21 December 2007, by clause 4(1) of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice (No 2) 2007 (SR 2007/405).

    Clause 4(1) Regulations: substituted, on 1 October 2009, by clause 4 of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice (No 2) 2009 (SR 2009/265).

    Clause 4(1) specified securities market: added, on 21 December 2007, by clause 4(2) of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice (No 2) 2007 (SR 2007/405).

5 Exemption from section 37 of Act for equity securities
  • (1) Every person is exempted from section 37 of the Act in respect of any equity securities that are, or are to be, allotted—

    • (a) by an issuer that meets the requirements in clause 8; and

    • (b) under the terms of, or on the exercise by any person of a right conferred by, any convertible security.

    (2) [Revoked]

    Clause 5(2): revoked, on 29 May 2009, by clause 5 of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice 2009 (SR 2009/149).

6 Exemption from section 37 of Act for units
  • (1) Every person is exempted from section 37 of the Act in respect of any units that are, or are to be, allotted—

    • (a) by an issuer that meets the requirements in clause 8; and

    • (b) under the terms of, or on the exercise by any person of a right conferred by, any convertible security.

    (2) [Revoked]

    Clause 6(2): revoked, on 29 May 2009, by clause 6 of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice 2009 (SR 2009/149).

7 Exemption from section 37A of Act for equity securities
  • (1) Every person is exempted from section 37A of the Act in respect of any equity securities that are, or are to be, allotted—

    • (a) by an issuer that meets the requirements in clause 8; and

    • (b) under the terms of, or on the exercise by any person of a right conferred by, any convertible security that was allotted before 1 October 1997.

    (2) [Revoked]

    Clause 7(1)(b): amended, on 29 May 2009, by clause 7(1) of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice 2009 (SR 2009/149).

    Clause 7(2): revoked, on 29 May 2009, by clause 7(2) of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice 2009 (SR 2009/149).

8 Requirements for issuers before exemptions apply
  • (1) The requirements referred to in clauses 5 to 7 are that—

    • (a) the issuer of the new security and the issuer of the convertible security must be the same person; or

    • (b) the following circumstances must apply:

      • (i) the issuer of the convertible security was a wholly-owned subsidiary of the issuer of the new security at the time the convertible security was offered and allotted and is also a wholly-owned subsidiary of the issuer of the new security at the time of the offer and the allotment of the new security; and

      • (ii) equity securities or units (as the case may be) issued by the issuer of the new security were quoted on a specified securities market at the time of the offer and allotment of the convertible security, and also at the time of the offer and allotment of the new security; and

      • (iii) the convertible security was quoted on a specified securities market on allotment, and remains quoted on a specified securities market for the period that it is current; and

      • (iv) the new security is quoted on a specified securities market on allotment.

    (2) In clauses 8 and 9, new security means the equity security or unit referred to in clause 5(1) or clause 6(1) or clause 7(1), as the case may be.

    Clause 8(1)(b)(ii): substituted, on 21 December 2007, by clause 5 of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice (No 2) 2007 (SR 2007/405).

    Clause 8(1)(b)(iii): substituted, on 21 December 2007, by clause 5 of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice (No 2) 2007 (SR 2007/405).

    Clause 8(1)(b)(iv): substituted, on 21 December 2007, by clause 5 of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice (No 2) 2007 (SR 2007/405).

9 Conditions of exemptions in clauses 5, 6, and 7
  • (1) Each exemption in clauses 5, 6, and 7 is subject to the condition that the convertible security has been allotted under a registered prospectus that contains particulars of all material matters relating to the offer of the new security.

    (2) Each exemption in clauses 5, 6, and 7 is subject to the further condition that, before allotment of the new security and before the exercise of any right conferred by the convertible security, the following documents have been sent to every person who was, at the time the financial statements were sent, a registered holder of the same class of convertible security in respect of which the new securities are allotted or a right is exercised:

    • (a) a copy of the most recent audited consolidated statement of financial position and audited consolidated statement of financial performance of the issuing group or the scheme (as the case may be) that comply with the provisions of the Financial Reporting Act 1993 relating to financial statements (or, if applicable, group financial statements) and with the provisions of any other enactment to which the issuer is subject; and

    • (b) if the date of allotment of the new security or the date of the exercise of any right conferred by the convertible securities would be later than 9 months after the date of the statement of financial position referred to in paragraph (a),—

      • (i) an interim consolidated statement of financial position as at the end of, and an interim consolidated statement of financial performance for, a period commencing on the day after the date of the statement of financial position referred to in paragraph (a) and ending on a date that is not later than 9 months after that date that comply with the provisions of the Financial Reporting Act 1993 relating to financial statements (or, if applicable, group financial statements) and with the provisions of any other enactment to which the issuer is subject (except in each case that they need not be audited); and

      • (ii) a statement containing a description of the issuing group or the scheme (as the case may be).

    (3) Each exemption in clauses 5, 6, and 7 is subject to the further condition that the date of the allotment of the new security under the terms of, or the exercise of any right conferred by, the convertible security is not more than 9 months after the date of the statement of financial position or interim statement of financial position, as the case may be, referred to in subclause (2).

10 Exemptions relating to rights issue
  • (1) Every person is exempted from section 37A(1)(a) of the Act in respect of any allotment of securities to any subscriber for those securities in whose favour an offer of those securities (being an offer of securities to which regulation 4(1)(a) of the Securities Regulations 1983 or regulation 6(1)(a) and (2) of the Regulations applies) has been renounced.

    (2) Every person is exempted from section 37A(1)(ab)(i) of the Act in respect of an allotment of securities to a subscriber for those securities in whose favour an offer of those securities has been renounced to the extent that the offer is an offer made to persons who already hold securities of the issuer.

    Clause 10 heading: amended, on 1 October 2009, by clause 5(1) of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice (No 2) 2009 (SR 2009/265).

    Clause 10(1): amended, on 1 October 2009, by clause 5(2) of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice (No 2) 2009 (SR 2009/265).

    Clause 10(2): added, on 1 October 2009, by clause 5(3) of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice (No 2) 2009 (SR 2009/265).

11 Exemption from section 37A(1)(a) and (b) of Act for new securities
  • (1) If this clause applies, every person is exempted, in respect of the allotment of new securities under the terms of, or on the exercise by any person of a right conferred by, a convertible security, from—

    • (b) section 37A(1)(b) of the Act (so far as it relates to an investment statement relating to the new security).

    (1A) This clause applies if—

    • (a) securities that are issued by the issuer of the new security, and are of the same class as the new security,—

      • (i) either—

        • (A) were quoted on a specified securities market at the time of the offer and allotment of the convertible security; or

        • (B) were quoted on a specified securities market after allotment of the convertible security, and had been the subject of an application to be quoted on that specified securities market at the time the convertible security was offered; and

      • (ii) are quoted on a specified securities market at the time of the offer and allotment of the new securities; and

    • (b) the convertible security—

      • (i) either—

        • (A) was quoted on a specified securities market at the time it was allotted; or

        • (B) was quoted on a specified securities market after it was allotted, and had been the subject of an application to be quoted on that specified securities market at the time it was offered; and

      • (ii) remains quoted on a specified securities market for the period that it is current; and

    • (c) the new securities are to be quoted on a specified securities market on allotment.

    (2) In this clause, new security means an equity security or unit that is allotted under the terms of, or on the exercise by any person of a right conferred by, any convertible security.

    Clause 11 heading: amended, on 21 December 2007, by clause 6(1) of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice (No 2) 2007 (SR 2007/405).

    Clause 11(1): substituted, on 21 December 2007, by clause 6(2) of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice (No 2) 2007 (SR 2007/405).

    Clause 11(1A): inserted, on 21 December 2007, by clause 6(2) of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice (No 2) 2007 (SR 2007/405).

    Clause 11(2): substituted, on 29 May 2009, by clause 8 of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice 2009 (SR 2009/149).

12 Conditions of exemption in clause 11 relating to section 37A(1)(a) of Act
  • The exemption in clause 11 from section 37A(1)(a) of the Act is subject to the conditions that—

    • (a) the convertible security was issued under an investment statement that relates to both the convertible security and the new security; and

    • (b) if the terms of the convertible security permit the issuer to vary the terms of the convertible security or the new security (including varying the terms of conversion), the investment statement must—

      • (i) state clearly that the issuer may vary the terms of conversion; and

      • (ii) state what steps the issuer will take, before an election to convert is made, to inform holders of convertible securities of the terms of conversion.

    Clause 12 heading: amended, on 21 December 2007, by clause 7(1) of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice (No 2) 2007 (SR 2007/405).

    Clause 12: amended, on 21 December 2007, by clause 7(2) of the Securities Act (Rights, Options, and Convertible Securities) Exemption Amendment Notice (No 2) 2007 (SR 2007/405).

13 Conditions of exemption in clause 11 relating to section 37A(1)(b) of Act where election to convert available
  • (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).

14 Conditions of exemption in clause 11 relating to section 37A(1)(b) of Act where no election to convert available
  • (1) This clause applies if the holder of a convertible security referred to in clause 11(1A)(b) does not have a right to elect to convert that security.

    (2) If this clause applies, the exemption in clause 11 from section 37A(1)(b) of the Act is subject to the condition that the investment statement relating to both the convertible securities and the new securities includes the following:

    • (a) 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:

    • (b) 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:

    • (c) a statement describing the principal risks assumed by holders of the convertible securities:

    • (d) a statement to the effect that holders of the securities have no right to elect to convert:

    • (e) a statement that new securities will or may be alloted (as the case may be) even if, at the time of allotment, there are adverse circumstances 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.

    Clause 14: 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).

Dated at Wellington this 27th day of September 2002.

The Common Seal of the Securities Commission was affixed in the presence of:

[Seal]

L A J Kavanagh,
Member.


Issued under the authority of the Acts and Regulations Publication Act 1989.

Date of notification in Gazette: 30 September 2002.


Contents

  • 1General

  • 2Status of reprints

  • 3How reprints are prepared

  • 4Changes made under section 17C of the Acts and Regulations Publication Act 1989

  • 5List of amendments incorporated in this reprint (most recent first)


Notes
1 General
  • This is a reprint of the Securities Act (Rights, Options, and Convertible Securities) Exemption Notice 2002. The reprint incorporates all the amendments to the notice as at 1 April 2013, as specified in the list of amendments at the end of these notes.

    Relevant provisions of any amending enactments that contain transitional, savings, or application provisions that cannot be compiled in the reprint are also included, after the principal enactment, in chronological order. For more information, see http://www.pco.parliament.govt.nz/reprints/ .

2 Status of reprints
  • Under section 16D of the Acts and Regulations Publication Act 1989, reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by the amendments to that enactment. This presumption applies even though editorial changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in the reprint.

    This presumption may be rebutted by producing the official volumes of statutes or statutory regulations in which the principal enactment and its amendments are contained.

3 How reprints are prepared
  • A number of editorial conventions are followed in the preparation of reprints. For example, the enacting words are not included in Acts, and provisions that are repealed or revoked are omitted. For a detailed list of the editorial conventions, see http://www.pco.parliament.govt.nz/editorial-conventions/ or Part 8 of the Tables of New Zealand Acts and Ordinances and Statutory Regulations and Deemed Regulations in Force.

4 Changes made under section 17C of the Acts and Regulations Publication Act 1989
  • Section 17C of the Acts and Regulations Publication Act 1989 authorises the making of editorial changes in a reprint as set out in sections 17D and 17E of that Act so that, to the extent permitted, the format and style of the reprinted enactment is consistent with current legislative drafting practice. Changes that would alter the effect of the legislation are not permitted.

    A new format of legislation was introduced on 1 January 2000. Changes to legislative drafting style have also been made since 1997, and are ongoing. To the extent permitted by section 17C of the Acts and Regulations Publication Act 1989, all legislation reprinted after 1 January 2000 is in the new format for legislation and reflects current drafting practice at the time of the reprint.

    In outline, the editorial changes made in reprints under the authority of section 17C of the Acts and Regulations Publication Act 1989 are set out below, and they have been applied, where relevant, in the preparation of this reprint:

    • omission of unnecessary referential words (such as of this section and of this Act)

    • typeface and type size (Times Roman, generally in 11.5 point)

    • layout of provisions, including:

      • indentation

      • position of section headings (eg, the number and heading now appear above the section)

    • format of definitions (eg, the defined term now appears in bold type, without quotation marks)

    • format of dates (eg, a date formerly expressed as the 1st day of January 1999 is now expressed as 1 January 1999)

    • position of the date of assent (it now appears on the front page of each Act)

    • punctuation (eg, colons are not used after definitions)

    • Parts numbered with roman numerals are replaced with arabic numerals, and all cross-references are changed accordingly

    • case and appearance of letters and words, including:

      • format of headings (eg, headings where each word formerly appeared with an initial capital letter followed by small capital letters are amended so that the heading appears in bold, with only the first word (and any proper nouns) appearing with an initial capital letter)

      • small capital letters in section and subsection references are now capital letters

    • schedules are renumbered (eg, Schedule 1 replaces First Schedule), and all cross-references are changed accordingly

    • running heads (the information that appears at the top of each page)

    • format of two-column schedules of consequential amendments, and schedules of repeals (eg, they are rearranged into alphabetical order, rather than chronological).

5 List of amendments incorporated in this reprint (most recent first)