New Zealand Legislation: Regulations

Statement of reasons

This notice, which comes into force on the day after the date of its notification in the Gazette and expires on 31 March 2009, exempts Maui Capital Indigo Fund Limited and 30 associated special purpose investment companies from clause 10(1)(c) of Schedule 1 of the Securities Regulations 1983 (the Regulations), which is the requirement that the registered prospectus must provide a prospective statement of cash flows.

The Securities Commission considers that the exemption is appropriate for the following reasons:

• the issuers are investment companies, and their business is more akin to that of a managed fund investing in market instruments than a traditional company. The issuers have not yet determined the precise make-up of their investment portfolio. For this reason, the provision of prospective financial information by the issuers would be highly speculative and may be of little relevance to potential investors:

• the condition that the prospectus contains a statement of the issuers' reasons for not providing the prospective statement of cash flows, and an acknowledgement that the investment is high risk, requires that potential investors are informed that certain information is not included and why, and that their attention is drawn to the nature of the investment:

• the directors of the issuers must still give a general description of their plans under clause 10(1)(a) of Schedule 1 of the Regulations:

• the exemption is consistent with earlier exemptions granted by the Commission and reflects current Commission policy.