Dated at Wellington this 27th day of July 2009.
The Common Seal of the Securities Commission was affixed in the presence of:
Statement of reasons
This notice comes into force on the day after the date of its notification in the Gazette and expires on the day after the date on which Part 4 of the Securities Markets Act 1988 is repealed (which is due to occur by Order in Council to be made under the Financial Advisers Act 2008 when that Act replaces Part 4).
This notice exempts franchisees of New Zealand Post Limited (NZ Post), and employees of NZ Post and its franchisees, subject to conditions, from certain investment broker disclosure requirements of the Securities Markets Act 1988 in respect of payment for units in The Bonus Bonds Trust (bonus bonds). The provisions from which exemptions are given are as follows:
section 41H (which is the requirement that an investment broker must disclose criminal convictions and other matters):
section 41J(2)(c) (which is the requirement that the disclosure statement must state the name, address, and business telephone number of the investment broker concerned). This exemption applies to franchisees of NZ Post:
section 41J(2)(d) (which is the requirement that the disclosure statement must state the name of an investment broker who is an employee of an investment broker).
The exemptions are subject to various conditions, for example, conditions that are designed to ensure that—
NZ Post is liable for bonus bond application money paid to franchisees and employees; and
there is disclosure about the matters that would have to be disclosed if the application money had been paid directly to NZ Post, for example, about the money-handling procedures and criminal convictions of NZ Post. These requirements are additional to the requirements of the Securities Markets Act 1988 to disclose information about the money-handling procedures of the franchisee, from which there is no exemption.
The Securities Commission considers that it is appropriate to grant the exemptions because—
broker information relevant to prospective investors deciding whether or not to purchase bonus bonds at PostShops would be information about NZ Post's money-handling procedures (which are the same for NZ Post employees, NZ Post franchisees, and employees of NZ Post franchisees) and about the principal officers of NZ Post; and
the conditions of the exemptions ensure that prospective investors intending to purchase bonus bonds at PostShops are provided with a broker disclosure statement that includes the required disclosures in respect of the money-handling procedures for both the broker and NZ Post (which are essentially the same) and in respect of the criminal convictions of NZ Post and its principal officers (including directors); and