Dated at Wellington this 7th day of October 2009.
The Common Seal of the Securities Commission was affixed in the presence of:
N O Todd,
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 October 2014, grants exemptions in respect of certain units issued by certain issuers in portfolio tax rate entities, namely call fund units and term units (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 PIE call fund are new. The exemptions in respect of register and certificate requirements follow the exemptions and conditions in the Securities Act (Continuous Debt Issues) Exemption Notice 2002.
The Commission considers it appropriate to grant these exemptions, subject to conditions, because the PIE funds offered by subsidiaries of registered banks are unit trust or group investment 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 issuers of call debt securities and continuous issuers of other debt securities, and should be treated similarly for regulatory purposes, so far as the matters covered by these exemptions are concerned. This reduces costs for the issuer and is not detrimental to investors, because the exemptions' conditions limit the exemptions to securities that operationally mirror call and other continuously issued debt securities offered by registered banks.