This note is not part of the regulations, but is intended to indicate their general effect.
These regulations come into force on 31 January 2010.
These regulations relate to moratorium proposals that vary the terms or conditions of an existing debt security by extending the time for payment of the principal amount or any other returns due, or to become due, under that security, or of reducing or cancelling those amounts or returns. These regulations do not apply in certain other situations, for example, a proposal that the investors swap debt securities for equity securities.
The principal effects of the regulations are to—
prescribe additional material that must be included in a prospectus for a moratorium proposal:
prescribe the contents of investment statements for a moratorium proposal. Currently, the Securities Act (Renewals and Variations) Exemption Notice 2002 provides exemptions, in the case of variations of securities that extend the time for repayment, from section 37A(1)(a) of the Securities Act 1978, which is the investment statement requirement. As a companion measure to these regulations, the Securities Commission is removing that exemption in so far as it relates to moratorium proposals:
imply certain terms into trust deeds if a moratorium proposal is made in respect of any debt securities. These confer, among other things, rights as to hold meetings and to appoint a receiver:
require periodic disclosure of certain information to security holders of issuers that are in moratorium.
The new terms that are implied into trust deeds, and the new periodic disclosure requirements, apply to all issuers for which a moratorium proposal has been accepted. This includes issuers that went into moratorium before the regulations are made and issuers that make a moratorium proposal before 31 January 2010. Transitional provisions cover the interface to the new rules.