Dated at Wellington this 23rd day of October 2008.
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 Financial Reporting Act (Overseas Companies) Exemption Notice 2007 (the principal notice). The principal notice presently grants exemptions to directors of certain issuers incorporated in the United States of America and the United Kingdom that offer securities in New Zealand under the Securities Act (Overseas Companies) Exemption Notice 2002, or any corresponding notice. This amendment extends those exemptions to equivalent directors in Australia.
The exemptions in the principal notice provide relief to directors relating to the preparation, content, auditing, and filing requirements of the Financial Reporting Act 1993. The exemptions are granted on condition that the issuer prepares and publicly files financial statements prepared under the financial reporting requirements of the relevant jurisdiction. In the case of Australian issuers to whom this notice applies, those financial reporting statements will comply with International Financial Reporting Standards as adopted by Australia (rather than New Zealand's financial reporting standards), and will be audited in accordance with the requirements set out in Australia's legislation. The auditor's report will provide the information required by Australia's legislation, rather than the information required under the Financial Reporting Act 1993.
The Securities Commission considers that it is appropriate to extend the exemptions to directors of certain issuers in Australia because—
there will not be any significant detriment to subscribers in New Zealand as they will have already relied upon financial statements prepared in accordance with Australian law when making the initial decision to invest:
the Commission has had regard to the financial reporting and audit requirements that must be complied with by Australian issuers:
Australian issuers are required by the law of Australia to publish audited financial statements in accordance with International Financial Standards as adopted by Australia. As of 1 January 2007, for financial reports published after that date, New Zealand has also moved to a regime based on International Financial Reporting Standards as its generally accepted accounting practice:
the Commission is satisfied that the consolidated accounts required to be prepared under Australian financial reporting laws provide sufficient information to avoid any detriment to investors who invest in companies incorporated in Australia:
the exemption addresses the particular difficulties experienced by Australian issuers in issuing securities in New Zealand. The exemption is not broader than is reasonably necessary to address these difficulties.