Securities Act (ASB Group Investments Limited) Exemption Notice 2008

  • expired
  • Securities Act (ASB Group Investments Limited) Exemption Notice 2008: expired, on 1 January 2014, by clause 3.

Reprint
as at 1 January 2014

Coat of Arms of New Zealand

Securities Act (ASB Group Investments Limited) Exemption Notice 2008

(SR 2008/442)

  • Securities Act (ASB Group Investments Limited) Exemption Notice 2008: expired, on 1 January 2014, by clause 3.


Note

Changes authorised by subpart 2 of Part 2 of the Legislation Act 2012 have been made in this reprint.

Note 4 at the end of this reprint provides a list of the amendments incorporated.

This notice is administered by the Financial Markets Authority.


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 (ASB Group Investments Limited) Exemption Notice 2008.

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

3 Expiry
  • This notice expires on the close of 31 December 2013.

4 Interpretation
  • (1) In this notice, unless the context otherwise requires,—

    Act means the Securities Act 1978

    address means a postal or electronic address; and includes a post office box address, document exchange box number, fax number, and an email address

    ASB Bank means ASB Bank Limited, a registered bank within the meaning of section 2(1) of the Reserve Bank of New Zealand Act 1989

    ASB Cash Fund means a specified PIE in respect of which,—

    • (a) under the terms of the offer of the specified units, a security holder has a right to withdraw the unit price of the units in full at any time, subject only to the following rights and requirement to the extent that they are described in the investment statement for the ASB Cash Fund:

      • (i) the right of ASBGI to suspend withdrawals if the withdrawal would prejudice the interests of unit holders in the ASB Cash Fund as a whole or would threaten the ASB Cash Fund's eligibility as a portfolio investment entity as defined in section YA 1 of the Income Tax Act 2007:

      • (ii) the right of ASBGI to use some or all of the unit price to meet any amounts that are owing by the unit holder to the ASB Bank:

      • (iii) the right of ASBGI, on a demand for withdrawal of the unit price, to pay less than the unit price in full because of any default or impairment of debt securities of the ASB Bank in which the specified PIE invests:

      • (iv) a requirement to maintain a minimum account balance:

      • (v) the right of ASBGI to withhold payment if the consideration for the units has not been received or cleared; and

    • (b) no fee or other amount is payable as a result of the unit price not having been held by ASBGI for a particular period of time

    ASB Cash Fund unit means a unit in an ASB Cash Fund

    ASBGI means ASB Group Investments Limited, an issuer in respect of 1 or more specified PIEs, that—

    • (a) is a wholly owned subsidiary of the ASB Bank; and

    • (b) is controlled by the ASB Bank within the meaning of section 7 of the Companies Act 1993 (which for the purposes of this paragraph is to be read with the necessary modifications); and

    • (c) in the ordinary course of its business continuously offers specified units to the public for subscription

    Regulations means the Securities Regulations 1983

    specified PIE means a unit trust—

    • (a) that is a portfolio investment entity as defined in section YA 1 of the Income Tax Act 2007; and

    • (b) in respect of which all of the money received from the public by way of subscriptions for specified units is invested in debt securities issued by the ASB Bank; and

    • (c) in respect of which the obligations of ASBGI to pay money to a holder of specified units in relation to those units are guaranteed by the ASB Bank explicitly, unconditionally, and irrevocably

    specified term unit means a specified unit that has a fixed term (which does not include an ASB Cash Fund unit)

    specified unit means a unit in a specified PIE

    unit price, in relation to a specified PIE, means $1.

    (2) Any term or expression that is defined in the Act or the Regulations and used, but not defined, in this notice has the same meaning as in the Act or the Regulations.

5 Exemption relating to receipt of investment statements
  • ASBGI and every person acting on its behalf are exempted from section 37A(1)(a) of the Act in respect of any specified units.

6 Conditions of exemption relating to specified term units
  • The exemption in clause 5 in respect of specified term units is subject to the conditions that—

    • (a) ASBGI or any person acting on its behalf must send an investment statement relating to the specified term units, at least 3 working days before the subscriber subscribes for the specified term units, to the holder of the specified term units at—

      • (i) an address specified by the subscriber for this purpose; or

      • (ii) the last address of the subscriber known to ASBGI; and

    • (b) if an investment statement relating to the specified term units is sent by fax, the fax machine has generated a record of the successful transmission of the investment statement to the fax machine of the recipient; and

    • (c) if an investment statement relating to the specified term units is sent by other electronic means, the information system used to transmit the investment statement has not generated a record that the investment statement has failed to be transmitted.

7 Conditions of exemption relating to ASB Cash Fund units
  • The exemption in clause 5 in respect of ASB Cash Fund units is subject to the conditions that—

    • (a) every subscriber must have received an investment statement relating to the ASB Cash Fund units before first subscribing for any ASB Cash Fund units; and

    • (b) ASBGI or any person acting on its behalf must send an updated investment statement relating to the ASB Cash Fund units, within 14 days of any material change to the investment statement, to each holder of units in the ASB Cash Fund at—

      • (i) an address specified by the subscriber for this purpose; or

      • (ii) the last address of the subscriber known to ASBGI; and

    • (c) if an investment statement relating to the ASB Cash Fund units is sent by fax, the fax machine has generated a record of the successful transmission of the investment statement to the fax machine of the recipient; and

    • (d) if an investment statement relating to the ASB Cash Fund units is sent by other electronic means, the information system used to transmit the investment statement has not generated a record that the investment statement has failed to be transmitted.

8 Exemption from register requirements
  • (1) ASBGI is exempted from section 52(1) and (3) of the Act in respect of the register kept by ASBGI under section 51(1)(d) of the Act, in so far as that register relates to specified units.

    (2) The exemption from section 52(1) of the Act is subject to the condition that every register of securities kept under section 51(1)(d) of the Act by ASBGI in respect of the specified units is, except when duly closed (but subject to any reasonable restrictions that ASBGI may impose, so that not less than 2 hours in each day must be allowed for inspection), open to the inspection of any holder of specified units in respect of the specified units of that unit holder entered on the register, without fee.

    (3) The exemption from section 52(3) of the Act is subject to the condition that, on payment by a holder of specified units of the fee prescribed for the purposes of section 52(4) of the Act, ASBGI or a person acting on its behalf provides to the unit holder a copy of that part of the register kept under section 51(1)(d) of the Act that relates to specified units of that unit holder.

9 Exemption from certificate requirements
  • (1) ASBGI is exempted from section 54 of the Act in respect of specified units.

    (2) The exemption in subclause (1) is subject to the condition that ASBGI sends, or causes to be sent, to a holder of specified units a written statement that properly evidences the nature and ownership of those specified units—

    • (a) within 14 days of a request by the holder of the specified units, in which case no fee must be payable by the unit holder for the statement; and

    • (b) on a frequency consistent with (and no less favourable than) the frequency with which such statements are sent to the holders of corresponding debt securities issued by the ASB Bank.

Dated at Wellington this 2nd day of December 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 and expires on 31 December 2013, grants exemptions in respect of certain units issued by ASB Group Investments Limited, namely the ASB Cash Fund and ASB Term Fund (together the PIE funds). The exemptions relate to receipt of investment statements and register and certificate requirements. The exemptions in respect of investment statements follow the exemptions granted in the Securities Act (Continuous Debt Issues) Exemption Notice 2002, except that the conditions of the exemptions in this notice in respect of units in the ASB Cash Fund are new. The exemptions in respect of register and certificate requirements follow the exemptions in section 5(2C) of the Securities Act 1978 in respect of debt securities issued by registered banks, and the exemptions and conditions in the Securities Act (Continuous Debt Issues) Exemption Notice 2002.

The Commission considers it appropriate to grant these exemptions for the following reasons:

  • the PIE funds are unit trust funds that have been developed to provide investors with products that have the key features of on-call and term debt securities, but with the tax advantages associated with portfolio investment entity securities. To this end, the products are very similar in operation to certain debt securities offered by ASB Bank Limited, and should be treated similarly for regulatory purposes, so far as the matters covered by this exemption are concerned. This reduces costs for the bank and is not detrimental to investors, because the conditions of exemption limit these exemptions to securities that operationally mirror debt securities issued by the bank and that are unconditionally guaranteed by the bank. Where registered banks offer debt securities to the public in New Zealand, they are able to rely on certain exemptions from the Securities Act 1978. These exemptions more closely align the disclosure obligations of ASB Group Investments Limited with those of ASB Bank Limited:

  • the Reserve Bank of New Zealand was consulted on this application.


Issued under the authority of the Legislation Act 2012.

Date of notification in Gazette: 4 December 2008.


Reprints notes
1 General
  • This is a reprint of the Securities Act (ASB Group Investments Limited) Exemption Notice 2008 that incorporates all the amendments to that notice as at the date of the last amendment to it.

2 Legal status
  • Reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by any amendments to that enactment. Section 18 of the Legislation Act 2012 provides that this reprint, published in electronic form, will have the status of an official version once issued by the Chief Parliamentary Counsel under section 17(1) of that Act.

3 Editorial and format changes
4 Amendments incorporated in this reprint
  • Securities Act (ASB Group Investments Limited) Exemption Notice 2008 (SR 2008/442): clause 3