Securities Act (Amendments to Exemption Notices Affecting Investment Adviser Information) Exemption Notice 2008

2008/60

Crest

Securities Act (Amendments to Exemption Notices Affecting Investment Adviser Information) Exemption Notice 2008

Pursuant to the Securities Act 1978, the Securities Commission gives the following notice (to which is appended a statement of reasons of the Securities Commission).

Notice

1 Title
  • This notice is the Securities Act (Amendments to Exemption Notices Affecting Investment Adviser Information) Exemption Notice 2008.

2 Commencement
  • This notice comes into force on the day after the date of its notification in the Gazette.

3 Amendments relating to advice concerning investment advisers
  • (1) Clause 2 of Schedule 1 of each of the notices specified in Part 1 of Schedule 1 of this notice are amended by omitting the heading Choosing an investment adviser and all of the words in clause 2 below that heading and above the heading What sort of investment is this? and substituting the heading and words set out in Schedule 2 of this notice.

    (2) Clause 2 of the Schedule of the Securities Act (NZX-NZAX Market) Exemption Notice 2005 is amended by omitting the heading Choosing an investment adviser and all of the words in clause 2 below that heading and above the heading What sort of investment is this? and substituting the heading and words set out in Schedule 2 of this notice.

    (3) The Schedule of each of the notices specified in Part 2 of Schedule 1 of this notice is amended by omitting the heading Choosing an investment adviser and all of the words in the Schedule of those notices below that heading and substituting the heading and words set out in Schedule 2 of this notice.

4 Transitional provision
  • The amendments made by this notice only apply to documents that are distributed on or after 30 April 2008.


Schedule 2
Amended advice

cl 3

Engaging an investment adviser

An investment adviser must give you a written statement that contains information about the adviser and his or her ability to give advice. You are strongly encouraged to read that document and consider the information in it when deciding whether or not to engage an adviser.

Tell the adviser what the purpose of your investment is. This is important because different investments are suitable for different purposes, and carry different levels of risk.

The written statement should contain important information about the adviser, including—

  • relevant experience and qualifications, and whether dispute resolution facilities are available to you; and

  • what types of investments the adviser gives advice about; and

  • whether the advice is limited to investments offered by 1 or more particular financial institutions; and

  • information that may be relevant to the adviser's character, including certain criminal convictions, bankruptcy, any adverse findings by a court against the adviser in a professional capacity, and whether the adviser has been expelled from, or prohibited from joining, a professional body; and

  • any relationships likely to give rise to a conflict of interest.

The adviser must also tell you about fees and remuneration before giving you advice about an investment. The information about fees and remuneration must include—

  • the nature and level of the fees you will be charged for receiving the advice; and

  • whether the adviser will or may receive a commission or other benefit from advising you.

An investment adviser commits an offence if he or she does not provide you with the information required.

Dated at Wellington this 28th day of February 2008.

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


[Seal]


J Diplock,
Chairperson.

Statement of reasons

This notice, which comes into force on the day after the date of its notification in the Gazette, amends various exemption notices to update the advice that is provided to investors in relation to investment advisers. The updated advice reflects recent changes to the law relating to investment advisers' disclosure obligations. The amendments only apply to documents that are distributed on or after 30 April 2008.

The Securities Commission considers that the amendments are appropriate for the following reasons:

  • the Securities Commission has recommended amendments to clause 1(1) of Schedule 3D of the Securities Regulations 1983 to reflect changes to the law relating to investment advisers' disclosure obligations:

  • some exemption notices require issuers to include the existing text of clause 1(1) of Schedule 3D of the Securities Regulations 1983 in offer documents for offers made in reliance on those exemption notices:

  • investors who receive information from issuers who are relying on one of these exemption notices will therefore receive the out-of-date and inaccurate statement:

  • the exemption notices that contain the existing text should be updated to reflect changes in the underlying legislation.


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

Date of notification in Gazette: 6 March 2008.

This notice is administered by the Securities Commission.