Statement of reasons
This notice, which comes into force on the day after the date of its notification in the Gazette, amends the Securities Act (Rights, Options, and Convertible Securities) Exemption Notice 2002.
The principal notice provides certain exemptions in relation to new equity securities or units in a unit trust (new securities) that are allotted under the terms of, or on the exercise by any person of a right conferred by, a convertible security. The principal notice currently specifies that different sorts of convertible securities are involved depending on whether the new securities are equity securities or units. This notice inserts a new definition of convertible security that will apply regardless of whether the new securities are equity securities or units.
The Securities Commission considers that it is appropriate to amend the principal notice because the policy of the notice is that it benefits investors if the prospectus for the convertible securities contains all relevant information about both the convertible securities and the new securities. This policy applies to new securities that are either equity securities or units. The amendment ensures that the policy applies equally whatever the precise nature of the convertible securities.