Dated at Wellington this 25th day of September 2007.
The Common Seal of the Securities Commission was affixed in the presence of:
Statement of reasons
This notice, which comes into force on the day after the date of its notification in the Gazette, amends the Securities Act (Group Investment Index Funds) Exemption Notice 2002 (the principal notice) by—
•extending its term by 5 years; and
•amending the definition of fund to require group investment funds to which the principal notice applies to be specified in a Schedule to the principal notice (rather than being the subject of a ruling from the Inland Revenue Department); and
•revoking a spent transitional provision.
The Securities Commission considers that it is appropriate to renew and amend the principal notice because—
•the principal notice recognises that passive funds, by their nature, do not involve active investment strategies. As such, where these funds are established by a trustee company further supervision is not needed:
•recent changes to tax law make it likely that in future passive funds may elect to be
“portfolio investment entities”, and may not seek a ruling from the Inland Revenue Department. This necessitates a change to the criteria used to define fund for the principal notice:
•the use of a schedule of funds allows funds that currently have an Inland Revenue Department ruling to continue to rely on the principal notice, so long as they remain passive funds, and will allow future applications to be considered on a case by case basis.