New Zealand Legislation: Regulations

9 Exemption for participatory securities

• (1) Every charitable organisation and every person acting on its behalf are exempted from sections 33(3), 37, and 37A of the Act and regulation 17 of the Regulations in respect of any participatory securities of which that organisation is the issuer if, by the terms of the constitution, rules, or other document or instrument constituting or defining the constitution of that organisation or scheme, or governing the conduct of its affairs,—

  • (a) the holders of those securities do not have any interest or right to participate in any capital, assets, earnings, royalties, or other property of that organisation or scheme other than the rights listed in subclause (2); and

  • (b) the liability of the holders of those securities to make any payments to, or on behalf of, that organisation or scheme is limited to the amount of the fees or subscriptions that may be approved by a majority of the holders of participatory securities of that organisation or scheme in general meeting.

  (2) The rights listed for the purpose of subclause (1)(a) are all or any of the following:

  • (a) a right to share pro rata with all other holders of participatory securities in a distribution of any capital, assets, earnings, royalties, or other property of that organisation or scheme on a liquidation or winding up of that organisation:

  • (b) a right to use or enjoy any assets or other property of that organisation or scheme:

  • (c) a right to vote at any meeting of the holders of participatory securities.