New Zealand Legislation: Regulations

Statement of reasons

This notice comes into force on its notification in the Gazette and expires on the close of 12 October 2010.

The notice exempts financial institutions that are a party to a deed of guarantee entered into with the Crown under the New Zealand deposit guarantee scheme from certain provisions of the Securities Act 1978 and the Securities Regulations 1983, in order to facilitate the operation of that deposit guarantee scheme.

The Securities Commission considers that the exemptions are appropriate because the New Zealand deposit guarantee scheme has been introduced by the Government to maintain public confidence in New Zealand's financial system and to maintain the confidence of general public depositors in relevant New Zealand financial institutions. Securities law contains specific rules concerning advertising and disclosure of guarantees. The exemptions facilitate prompt and simple disclosure to investors about any issuer's coverage under the scheme. The exemptions also encourage the delivery of standardised information about the scheme in order to avoid investor confusion about the scheme and its application to any issuer. The conditions of the exemptions require issuers to advise investors about their coverage under the scheme, refer investors to an authoritative source of information about the scheme, and prevent descriptions of the scheme that are inconsistent with official descriptions.