Securities (Moratorium) Regulations 2009

  • revoked
  • Securities (Moratorium) Regulations 2009: revoked, on 1 December 2014, by section 5(m) of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).

Reprint
as at 1 December 2014

Coat of Arms of New Zealand

Securities (Moratorium) Regulations 2009

(SR 2009/395)

Anand Satyanand, Governor-General

Order in Council

At Wellington this 14th day of December 2009

Present:
His Excellency the Governor-General in Council

  • Securities (Moratorium) Regulations 2009: revoked, on 1 December 2014, by section 5(m) of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).


Note

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

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

These regulations are administered by the Financial Markets Authority.


Pursuant to sections 70(1)(b), (ca), and (g) and 70AA of the Securities Act 1978, His Excellency the Governor-General, acting on the advice and with the consent of the Executive Council, and on the recommendation of the Minister of Commerce after consultation with the Securities Commission in accordance with section 70(3) of that Act, makes the following regulations.

Regulations

1 Title
  • These regulations are the Securities (Moratorium) Regulations 2009.

2 Commencement
  • These regulations come into force on 31 January 2010.

3 Interpretation
  • (1) In these regulations, unless the context otherwise requires,—

    accounting period has the meaning given in section 2(1) of the Companies Act 1993

    Act means the Securities Act 1978

    FRS-42 means the financial reporting standard known as Financial Reporting Standard No 42 (Prospective Financial Statements) that has been approved under the Financial Reporting Act 1993

    insolvency, in respect of an issuer,—

    • (a) means that the issuer has been placed in, or become subject to, statutory management, voluntary administration, or liquidation, or that a receiver has been appointed in relation to the issuer or all or more than half of the assets of the issuer; and

    • (b) includes that the issuer is subject to an overseas insolvency proceeding (being a collective judicial or administrative proceeding, including an interim proceeding, pursuant to a law relating to insolvency in which the assets and affairs of the issuer are subject to control or supervision by a judicial or any other authority that is competent to control or supervise that proceeding, for the purpose of reorganisation or liquidation)

    moratorium proposal means an offer of any debt security that is, in substance, a variation of the terms or conditions of an existing debt security that extends the time for payment of the principal amount or any other returns, or reduces or cancels the principal amount or any other returns, that are due, or to become due, under that existing debt security

    NZ IFRS 7 means the financial reporting standard known as the New Zealand Equivalent to International Financial Reporting Standard 7 (Financial Instruments: Disclosures) that has been approved under the Financial Reporting Act 1993

    quarter means each of the 3-month periods that make up the issuer's accounting period (for example, if the balance date of the issuer is 30 June 2010, the 4 quarters are the periods of 3 consecutive months ending with the last day of September, December, March, and June).

    (2) For the purposes of these regulations, a moratorium is completed when—

    • (a) all security holders have been paid all of the principal amounts and any other returns that were due under the terms and conditions of the debt securities as varied under the moratorium proposal; or

    • (b) the issuer has entered insolvency.

    (3) Any term or expression that is defined in the Act or the Securities Regulations 2009 and used, but not defined, in these regulations has the same meaning as in the Act or the Securities Regulations 2009.

    (4) Regulation 4(6) of the Securities Regulations 2009 applies with necessary modifications.

Prospectuses

4 Matters to be contained in prospectuses relating to moratorium proposals
  • (1) Every registered prospectus relating to a moratorium proposal must contain all of the information, statements, and other matters specified in Schedule 1 that are applicable to the moratorium proposal to which the prospectus relates.

    (2) Subclause (1) applies in addition to the other requirements set out in the Act and the Securities Regulations 1983 or the Securities Regulations 2009 (as the case may be).

    (3) The prospectus must contain an index showing the page of the prospectus on which each of the matters in the prospectus appears.

    (4) The following do not apply to a prospectus relating to a moratorium proposal to the extent that these requirements would require disclosure of any particulars of any existing terms of the trust deed:

    (5) This regulation applies regardless of the type of registered prospectus (for example, whether it is a full registered prospectus or a short form prospectus, or whether it is a prospectus to which the Securities Regulations 1983 or the Securities Regulations 2009 apply).

    (6) Nothing in this regulation limits the information, statements, or other matters that may be contained in a registered prospectus relating to a moratorium proposal.

Investment statements

5 Matters to be contained in investment statements relating to moratorium proposals
  • (1) Every investment statement relating to a moratorium proposal must set out succinctly all of the information, statements, and other matters specified in Schedule 2.

    (2) The following do not apply to an investment statement relating to a moratorium proposal:

    (3) Otherwise, the requirements of the Securities Regulations 1983 and the Securities Regulations 2009 relating to investment statements apply to a moratorium proposal with any necessary modifications, and subclause (1) applies in addition to the other requirements set out in the Act or the Securities Regulations 1983 or the Securities Regulations 2009 (as the case may be).

    (4) An investment statement relating to a moratorium proposal may state that additional information about a matter specified in Schedule 2 is set out in a registered prospectus.

    (5) An investment statement relating to a moratorium proposal must not contain any information, statements, or matters other than those that are required or provided for by this regulation.

    Compare: SR 1983/121 r 7A(1), (2), (5); SR 2009/230 r 19

6 Investment statement treatment of matter that is not applicable
  • If a matter specified in Schedule 2 is not applicable to the moratorium proposal to which an investment statement relates, the investment statement must refer to that matter and state that the matter is not applicable.

    Compare: SR 1983/121 r 7A(3); SR 2009/230 r 20

7 Information, statements, and other matters must be set out under question
  • (1) All information, statements, and other matters specified under an italicised question set out in Schedule 2 that are required to be contained in an investment statement in respect of a moratorium proposal must be set out together in the investment statement under that question.

    (2) Despite subclause (1), an investment statement relating to a moratorium proposal may, rather than repeating contact details, contain a cross-reference to the statement of those contact details elsewhere in the investment statement.

    Compare: SR 1983/121 r 7A(4); SR 2009/230 r 21

8 Requirements for advertisements and restrictions on content of advertisements in Securities Regulations 2009

Additional clauses deemed to be contained in trust deeds

9 Additional clauses about moratorium proposals deemed to be contained in trust deeds
  • (1) The clauses of Schedule 3 are deemed to be contained in every trust deed required for the purposes of the Act relating to debt securities (whether or not the trust deed was registered before the date of commencement of these regulations).

    (2) The clauses in Schedule 3 are in addition to the other clauses that are deemed to be contained in a trust deed by the Securities Regulations 2009.

10 Amendment to Securities Regulations 2009
  • (1) This regulation amends the Securities Regulations 2009.

    (2) Regulation 40 is amended by adding the following subclause:

    • (6) See also the clauses in Schedule 3 of the Securities (Moratorium) Regulations 2009, which are also deemed to be contained in every trust deed required for the purposes of the Act relating to debt securities (whether or not the trust deed was registered before the date of commencement of those regulations), where those regulations apply.

Periodic disclosure

11 Information that must be sent half-yearly
  • (1) A half-yearly report summarising the following matters must be sent under section 54A of the Act to each holder of securities in respect of which a moratorium proposal has been accepted:

    • (a) the state of affairs with respect to the property of the issuer as at the end of the half-year to which the report relates; and

    • (b) the conduct of the moratorium, including all amounts received and paid, during the half-year to which the report relates; and

    • (c) a statement identifying—

      • (i) the most recent audited annual financial statements of the borrowing group; and

      • (ii) the most recent interim financial statements of the borrowing group, including a statement of whether or not those are audited; and

    • (d) a statement to the effect that the financial statements referred to in paragraph (c)—

      • (i) are filed on a public register at the Companies Office of the Ministry of Economic Development and are available for public inspection (including at www.companies.govt.nz); and

      • (ii) will be made available on request, and free of charge, by the issuer; and

    • (e) a statement explaining how a request under paragraph (d)(ii) should be made.

    (2) The report must include details of—

    • (a) the property disposed of since the date of any previous report and any proposals for the disposal of the property of the issuer; and

    • (b) amounts owing, as at the date of the report, to creditors of the issuer who would have preferential claims if the issuer were in receivership or liquidation; and

    • (c) other amounts likely to be available as at the date of the report for payment to creditors; and

    • (d) a statement as to all transactions (if any) that are material related party transactions under generally accepted accounting practice and were entered into or were being performed in the half-year to which the report relates; and

    • (e) if prospective financial information about amounts to be received by the borrowing group was contained or referred to in the prospectus or investment statement for the moratorium proposal, a comparison (if practicable, in the same form and for the same period as the prospective information) of the actual receipts against the prospective receipts; and

    • (f) a statement of the trading prospects of the borrowing group, together with any material information that may be relevant to those trading prospects; and

    • (g) a statement updating any forecasts in any prospective financial information that has been previously disclosed to security holders; and

    • (h) a statement of the extent to which any outcomes referred to in the prospectus or the investment statement relating to the moratorium proposal have been achieved, with particular reference to any milestones identified in those documents which were stated to enable achievement of those outcomes to be tracked on a quarterly basis; and

    • (i) a statement of any other matters that are material to the ability of the issuer to achieve any outcomes, forecasts, or milestones that have been previously disclosed to security holders.

    (3) The statement required by subclause (2)(f) must include a description of all special trade factors and risks that—

    • (a) are not likely to be known or anticipated by the general public; and

    • (b) could materially affect the prospects of the borrowing group.

    (4) The half-years in respect of which reports must be sent under subclause (1) are—

    • (a) the first 6 months of each of the issuer's accounting periods; and

    • (b) the second 6 months of each of the issuer's accounting periods.

    (5) This regulation applies throughout the period that begins with the start of the half-year in which the moratorium proposal is accepted and that ends with the end of the half-year during which the moratorium is completed.

    (6) The documents, information, and other matters required by this clause must be sent to each holder of securities in respect of which a moratorium proposal has been accepted within 2 months after the end of each half-year.

    (7) The financial information required by subclause (2)(h) must include (in tabular form where possible) comparative information from the last 3 quarters (or, if financial information has not been sent under this clause to security holders for all of the last 3 quarters, from those quarters in respect of which financial information has been sent).

    Compare: 1993 No 122 s 24

12 Information that must be sent for other quarters
  • (1) A quarterly report containing the following matters must be sent under section 54A of the Act to each holder of securities in respect of which a moratorium proposal has been accepted:

    • (a) a statement summarising any material change in either the state of affairs with respect to the property of the issuer, or the conduct of the moratorium, since the most recent half-yearly report under regulation 11; and

    • (b) a statement identifying—

      • (i) the most recent audited annual financial statements of the borrowing group; and

      • (ii) the most recent interim financial statements of the borrowing group, including a statement of whether or not those are audited; and

    • (c) a statement to the effect that the financial statements referred to in paragraph (b)—

      • (i) are filed on a public register at the Companies Office of the Ministry of Economic Development and are available for public inspection (including at www.companies.govt.nz); and

      • (ii) will be made available on request, and free of charge, by the issuer; and

    • (d) a statement explaining how a request under paragraph (c)(ii) should be made; and

    • (e) a statement of the extent to which any outcomes referred to in the prospectus or the investment statement relating to the moratorium proposal have been achieved, with particular reference to any milestones identified in those documents which were stated to enable achievement of those outcomes to be tracked on a quarterly basis; and

    (2) The financial information required by subclause (1)(e) must include (in tabular form where possible) comparative information from the last 3 quarters (or, if financial information has not been sent under this clause to security holders for all of the last 3 quarters, from those quarters in respect of which financial information has been sent).

    (3) The documents, information, and other matters required by subclause (1) must be sent to each holder of securities in respect of which a moratorium proposal has been accepted within 2 months after the end of each quarter—

    • (a) in the period that begins when the moratorium proposal is accepted and that ends when the moratorium has been completed; and

    • (b) in respect of which a report under regulation 11 is not required.

Transitional provisions

13 Saving in respect of trust deeds before commencement
  • To avoid doubt, regulation 9 does not invalidate anything done before the commencement of these regulations.

14 Transitional provision relating to periodic disclosure
  • (1) Regulations 11 and 12 apply in respect of an issuer whether the moratorium proposal was accepted before or after the date of commencement of these regulations.

    (2) Regulation 11 first applies to an issuer in respect of the first half-year of the issuer that ends on or after 30 June 2010.

    (3) Regulation 12 first applies to an issuer in respect of the first quarter of the issuer that ends on or after 31 March 2010.

    (4) If subclause (2) relieves an issuer from sending a half-yearly report under regulation 11 in respect of a half-year that ends before 30 June 2010, the issuer must send quarterly reports under regulation 12 in respect of each quarter until the first half-yearly report is required under subclause (2) of this regulation (for example, if the issuer has a balance date of 31 March 2010, then the issuer must send a quarterly report for the quarter ending on that date, and then another quarterly report for the quarter ending 30 June 2010, and then a half-yearly report for the half-year ending 30 September 2010).


Schedule 1
Additional matters required in prospectus for moratorium proposal

r 4

Note: These clauses are additional to the matters required by the Securities Regulations 1983 or the Securities Regulations 2009 (as the case may be).

1 Description of moratorium proposal
  • A brief, balanced description of the moratorium proposal, including—

    • (a) the effect of the moratorium proposal, if accepted:

    • (b) the mechanism(s) by which it is proposed to be carried out (for example, by a recapitalisation plan or a repayment plan and the process to carry out the moratorium proposal):

    • (c) a brief summary of the proposed variations to the terms and conditions of the security, and of any proposed changes to the trust deed, under the moratorium proposal, including the date that the moratorium is due to be completed.

2 Directors' plans
  • A statement by the directors of the issuer stating—

    • (a) the outcomes required to be achieved by the issuer to enable it to repay the principal amounts and any other returns due and to become due under the security, and the time frame for achieving those outcomes; and

    • (b) milestones that will enable achievement of those outcomes to be tracked on a quarterly basis; and

    • (c) the likelihood (if any) of insolvency before payment of the principal amounts and any other returns due and to become due under the security.

3 Expert opinion
  • A copy of a report by an independent expert (being a person who is appointed by the trustee, and who is independent of the issuer, and who has expertise and experience to the satisfaction of the trustee) signed by him or her (either in his or her own name or that of his or her firm) stating his or her opinion, after due inquiry by him or her, of the following:

    • (a) the advantages and disadvantages of the moratorium proposal and the alternative options referred to in the investment statement and whether the assumptions underlying the issuer’s financial information and analysis are realistic; and

    • (b) if there is more than 1 type or class of existing security issued by the issuer, the fairness between types or classes, taking into account relative priorities between the types or classes in the event of an insolvency; and

    • (c) whether any potential return for shareholders is fair to security holders in the circumstances of the offer; and

    • (d) details of any related party transactions or distributions that may be voidable if a liquidator were to be appointed immediately, including amounts; and

    • (e) the likelihood of success of the directors' future plans for the issuer; and

    • (f) the effect of any guarantee given in respect of the issuer; and

    • (g) the merits of the moratorium proposal, having regard to the interests of the class of security holders to whom the offer is made.

4 Prospective financial information in respect of current and next accounting periods
  • (1) A prospective statement of financial position, a prospective statement of financial performance, and a prospective statement of cash flows for the borrowing group in relation to the 2 following periods:

    • (a) the accounting period ending on the next balance date after the specified date:

    • (b) the accounting period that is subsequent to the period referred to in paragraph (a) (unless the moratorium is due to be completed before the start of that accounting period).

    (2) The statements required by subclause (1) must be prepared in accordance with FRS-42 and on the basis that the moratorium proposal is accepted.

    (3) However, statements are not required under subclause (1) in relation to an accounting period referred to in that subclause if,—

    • (a) in the opinion of the directors of the issuer, after due inquiry by them, prospective financial statements for that period would be likely to deceive or mislead with regard to any particular that is material to the offer of securities (for example, because it is not practicable to formulate reasonable assumptions on which to base the statements); and

    • (b) the prospectus contains a statement to this effect together with a statement of the directors' reasons for their opinion; and

    • (c) the prospectus contains alternative financial information for the period until the moratorium is completed, comprising—

      • (i) a maturity analysis of the expected maturity dates of financial liabilities and financial assets prepared in accordance with NZ IFRS 7 (including Appendix E of that Standard) on the basis of the values and timing of repayments for the security if the moratorium proposal is accepted; and

      • (ii) an analysis of the proposed business plan for the borrowing group (including the assumptions underlying the plan and a sensitivity analysis) that is prepared in accordance with NZ IFRS 7 on the basis that the moratorium proposal is accepted; and

    • (d) the prospectus contains a statement of the principal assumptions made in preparing the alternative financial information referred to in paragraph (c); and

    • (e) the prospectus contains statements—

      • (i) to the effect that the alternative financial information is inherently uncertain; and

      • (ii) that the financial information contained in the prospectus is not full prospective financial information; and

      • (iii) to the effect that the alternative financial information is based on the best and most current information available.

    Compare: SR 2009/230, Schedule 1, cl 11

Schedule 2
Matters required in investment statement for moratorium proposal

r 5

Contents

Important information for investors

What is the moratorium proposal?

Who is involved in this moratorium proposal?

How would the moratorium proposal affect my rights?

Why are the directors putting this moratorium proposal to security holders?

What are the other options, and how do they compare with a moratorium?

What are the directors' plans for the issuer?

What may ultimately happen to the issuer?

What does the independent expert say about the moratorium proposal?

Who else has an interest in approval of this moratorium proposal?

What does the trustee say?

Who would monitor the issuer while it is in moratorium?

What are my risks?

Whom do I contact with inquiries about my investment?

Is there anyone to whom I can complain if I have problems after the moratorium proposal is accepted?

What other information can I obtain about this moratorium proposal?

Power to appoint receiver after moratorium proposal accepted


Note: These clauses are instead of the clauses required by Schedule 3D of the Securities Regulations 1983 or Schedule 13 of the Securities Regulations 2009 (as the case may be).

Important information for investors

1 Information at front of investment statement
  • (1) A statement in the following form (to be set out at the front of the investment statement):

    Important information

    (The information in this section is required under the Securities Act 1978.)

    Moratorium proposals are very significant, and have short-term and long-term consequences. They alter your rights under the securities that you currently hold, and the timing or likely amount of any repayments you can expect. Read all documents carefully. Ask questions. Seek professional advice from an adviser before committing yourself.

    This document, together with the trust deed, prospectus (if any), and other documents available to you relating to the moratorium proposal, will outline your rights in relation to this moratorium proposal. Know and understand your rights.

    Important considerations when deciding on a moratorium

    When deciding whether to accept the moratorium proposal, consider carefully the answers to the following questions that can be found on the pages noted below:

     Page
    What is the moratorium proposal? 
    Who is involved in this moratorium proposal? 
    How would the moratorium proposal affect my rights? 
    Why are the directors putting this moratorium proposal to security holders? 
    What are the other options, and how do they compare with a moratorium proposal? 
    What are the directors' plans for the issuer? 
    What will ultimately happen to the issuer? 
    What does the independent expert say about the moratorium proposal? 
    Who else has an interest in approval of this moratorium proposal? 
    What does the trustee say? 
    Who would monitor the issuer while it is in moratorium? 

    In addition to the information in this document, important information can be found in the current registered prospectus for the investment. You are entitled to a copy of that prospectus on request.”

    (2) If the investment statement relates to securities for which a registered prospectus is not required, the paragraph in the statement in subclause (1) referring to a registered prospectus must be omitted.

What is the moratorium proposal?

2 Description of moratorium proposal
  • A brief, balanced description of the moratorium proposal, including—

    • (a) the effect of the moratorium proposal, if accepted:

    • (b) the mechanism(s) by which it is proposed to be carried out (eg, by a recapitalisation plan or a repayment plan and the process to carry out the moratorium proposal).

Who is involved in this moratorium proposal?

3 Names and addresses
  • The following information in respect of the moratorium proposal:

    • (a) the name and address of the issuer:

    • (b) the names of the directors of the issuer:

    • (c) the names and addresses of any promoters:

    • (d) the name and address of the trustee:

    • (e) the name and address of the independent expert referred to in clause 9:

    • (f) the name and address of any independent monitor under the moratorium proposal referred to in clause 12(b):

    • (g) the name of any person who would be a substantial security holder of the issuer if the issuer were a public issuer.

How would the moratorium proposal affect my rights?

4 Changes to rights
  • The following information about the moratorium proposal:

    • (a) key changes that are proposed to the rights of the security holders to whom the offer is made, including a comparison of those rights before and after the acceptance of the moratorium proposal:

    • (b) a brief summary of the proposed variations to the terms and conditions of the security, and of any proposed changes to the trust deed, under the moratorium proposal, including the date that the moratorium is due to be completed:

    • (c) rights of security holders that are being removed or waived (for example, removal of rights under an agreement to take legal action or waiver of any rights in respect of any breaches of the trust deed):

    • (d) a statement setting out any rights of security holders under the moratorium proposal if any milestones specified in the moratorium proposal are not achieved or any other event of default or review specified in the moratorium proposal occurs.

Why are the directors putting this moratorium proposal to security holders?

5 Reasons for moratorium proposal
  • The following information about the moratorium proposal:

    • (a) a brief summary of the issues facing the issuer that have led to the moratorium proposal being formulated:

    • (b) details of any breach or potential breach of the existing terms and conditions of the existing security or of the trust deed for the security and how the breach or potential breach and the consequences of it are addressed by the moratorium proposal:

    • (c) a statement of the benefits (if any) to security holders, and of the benefits (if any) to shareholders or promoters, that the directors believe may result from the moratorium proposal.

What are the other options, and how do they compare with a moratorium?

6 Comparison of options
  • The following information:

    • (a) a brief, balanced description of the alternative options to the moratorium proposal, including receivership, liquidation, and any other reasonably practicable options:

    • (b) a statement of the advantages and disadvantages to security holders of the moratorium proposal and the alternative options to the moratorium proposal that are reasonably practicable:

    • (c) a statement of the net present value of the principal amounts and any other scheduled returns due or to become due to security holders under each of the options, including any principal assumptions made in this analysis:

    • (d) an explanation in the following form:

      Net present value shows the value today of money to be received (or paid) in the future. It allows investors to compare options that involve different payments at different times. For example, net present value takes into account that $100 in 6 months time is worth less than $100 now because $100 now can be reinvested and will earn interest for the next 6 months.:

    • (e) possible risks associated with the moratorium proposal and the reasonably practicable alternative options, including the risk of future default if the moratorium proposal is accepted:

    • (f) a statement as to whether it is the opinion of the directors, after due inquiry by them, that the moratorium proposal is the best option from the perspective of security holders assessed as a whole (as opposed to the interests of shareholders, promoters, or any other persons).

What are the directors' plans for the issuer?

7 Directors' plans if moratorium proposal is accepted
  • A statement by the directors of the issuer, on the basis that the moratorium proposal is accepted, of—

    • (a) the outcomes required to be achieved by the issuer to enable it to repay the principal amounts and any other returns due and to become due under the security, and the time frame for achieving those outcomes; and

    • (b) milestones that will enable achievement of those outcomes to be tracked on a quarterly basis; and

    • (c) the likelihood (if any) of insolvency before payment of the principal amounts and any other returns due and to become due under the security; and

    • (d) whether the directors of the issuer intend that the issuer will offer any securities to the public during the period of the moratorium.

What may ultimately happen to the issuer?

8 Directors' future plans after moratorium completed
  • A statement about the directors’ future plans for the issuer following the payment of all the principal amounts and any other returns due to be paid under the moratorium proposal, including—

    • (a) whether the directors of the issuer intend that the issuer will continue trading or be wound up; and

    • (b) whether the directors of the issuer intend that the issuer will offer any securities to the public after the moratorium is completed.

What does the independent expert say about the moratorium proposal?

9 Findings of independent expert
  • (1) A brief summary of the opinion of an independent expert (being a person who is appointed by the trustee, and who is independent of the issuer, and who has expertise and experience to the satisfaction of the trustee), including the independent expert’s assessment of—

    • (a) the advantages and disadvantages of the moratorium proposal and the alternative options referred to in the investment statement and whether the assumptions underlying the issuer’s financial information and analysis are realistic; and

    • (b) if there is more than 1 type or class of existing security issued by the issuer, the fairness between types or classes, taking into account relative priorities between the types or classes in the event of an insolvency; and

    • (c) whether any potential return for shareholders is fair to security holders in the circumstances of the offer; and

    • (d) whether there are any related party transactions or distributions that may be voidable if a liquidator were to be appointed immediately; and

    • (e) the likelihood of success of the directors' future plans for the issuer; and

    • (f) the effect of any guarantee given in respect of the issuer; and

    • (g) the merits of the moratorium proposal having regard to the interests of the class of security holders to whom the offer is made.

    (2) The summary in subclause (1) must be one that has been prepared by the independent expert.

Who else has an interest in approval of this moratorium proposal?

10 Statement of benefits
  • A statement of any direct or indirect benefits that any directors, promoters, substantial shareholders, the trustee, and any associated persons of any of those persons may obtain from the moratorium proposal, including any potential remuneration, incentives, dividends, or increase in capital arising from any revaluation of liabilities, or payments to shareholders, and a quantification of those benefits (to the extent that is reasonably practicable).

What does the trustee say?

11 Statement from trustee
  • A statement from the trustee—

    • (a) drawing attention to the key issues of the moratorium proposal, including the effect of the moratorium proposal on enforcement and monitoring by the trustee; and

    • (b) identifying any conflicts of interest the trustee may have; and

    • (c) as to why the trustee considers the moratorium proposal has sufficient merit for the trustee to allow it to be put to security holders, rather than taking enforcement action under the trust deed or seeking any alternative directions from security holders.

Who would monitor the issuer while it is in moratorium?

12 Role of trustee and any independent monitor
  • A brief statement—

    • (a) describing the ongoing role of the trustee; and

    • (b) describing the role of any independent monitor (being a person who is independent of the issuer and who is to be appointed to monitor the issuer’s payment of the principal amounts and any other returns due, or to become due, under the moratorium proposal and to report any problems that arise to the trustee); and

    • (c) stating if an independent monitor has not been appointed, why none has been appointed; and

    • (d) stating whether the independent monitor is independent of the trustee.

What are my risks?

13 Risks
  • (1) A brief description of the principal risks of—

    • (a) the money paid by a security holder not being recovered in full by the subscriber:

    • (b) a security holder not receiving the principal amounts and any other returns due, or to become due, under the terms and conditions of the security as varied by the moratorium proposal:

    • (c) a security holder being required to pay more money in respect of a security.

    (2) If it is reasonably foreseeable that, on termination of any security at any time, a security holder will have received, in total, less than the amount paid to the issuer or an associated person for the security, a statement to this effect and a brief description of the circumstances that may produce this result.

Whom do I contact with inquiries about my investment?

14 Inquiries about moratorium proposal
  • The names or descriptions of officers, employees, or agents of the issuer to whom inquiries about the moratorium proposal can be made, and the contact details of those people (which must include an address and a business telephone number).

Is there anyone to whom I can complain if I have problems after the moratorium proposal is accepted?

15 Complaints about moratorium
  • (1) The names or descriptions of officers, employees, or agents of the issuer to whom complaints about the moratorium can be made, and the contact details of those people (which must include an address and a business telephone number).

    (2) If complaints about the moratorium can be made to a trustee or an industry body, a statement to this effect and the contact details of those people (which must include an address and a business telephone number).

    (3) A statement as to whether complaints about the moratorium can be made to an ombudsman and, if so, the contact details of the ombudsman (which must include an address and a business telephone number).

What other information can I obtain about this moratorium proposal?

16 Prospectus and financial statements
  • (1) A statement—

    • (a) to the effect that other information about the moratorium proposal or the issuer, or both, is contained or referred to in a prospectus and in financial statements of, or relating to, the issuer; and

    • (b) describing where a copy of the prospectus and of the most recent financial statements of, or relating to, the issuer can be obtained, free of charge; and

    • (c) to the effect that the prospectus, and financial statements and other documents of, or relating to, the issuer, are filed on a public register at the Companies Office of the Ministry of Economic Development and available for public inspection (including at www.companies.govt.nz).

    (2) For the purposes of subclause (1) and the heading to this clause, if no prospectus is required for the securities, references to the prospectus must be disregarded.

17 Periodic information
  • A statement of the periodic information that will be provided to security holders under the moratorium proposal.

18 On-request information
  • A statement—

    • (a) describing the type of information relating to the issuer or the moratorium proposal that is required to be, or otherwise will be, available on request from the issuer; and

    • (b) explaining how the request should be made; and

    • (c) as to whether any charge may be made for the information and the amount of the charge.

Power to appoint receiver after moratorium proposal accepted

19 Power to appoint receiver after moratorium proposal accepted
  • A statement of the effect of the clause set out in clause 15 of Schedule 3.

Schedule 3
Additional clauses deemed to be contained in trust deeds if moratorium proposal is made

r 9

Note: These clauses are additional to clauses 1 to 11 in Schedule 15 of the Securities Regulations 2009.

Clauses relating to moratorium proposals that are deemed to be contained in all trust deeds for debt securities

12 Restriction on amendment of deed as result of moratorium proposals
  • (1) No amendment to the deed may be made as a result of a moratorium proposal unless,—

    • (a) if the security has been offered in, or accompanied by, a registered prospectus, that prospectus complies with the Act and the Securities (Moratorium) Regulations 2009; and

    • (b) if the security has been offered in, or accompanied by, an investment statement, that investment statement complies with the Act and the Securities (Moratorium) Regulations 2009.

    (2) However, there is no breach of subclause (1) in the case of an amendment to the deed as a result of a moratorium proposal that is made before the date of commencement of these regulations if the trustee is satisfied that—

    • (a) information has been given to each holder of securities to which the deed relates that is substantially similar to the information required to be contained in a prospectus and an investment statement by the Securities (Moratorium) Regulations 2009; and

    • (b) the time each holder of securities to which the deed relates was given to consider the moratorium proposal and the information referred to in paragraph (a) was no less than the time required by clauses 13 and 14.

    (3) If no prospectus is required for the securities, the references to the prospectus in subclauses (1) and (2) must be disregarded.

13 Moratorium proposal meetings
  • (1) The issuer must, at the request in writing of the trustee or of persons holding not less than one-tenth in nominal value of the class of issued debt securities to which the deed and the moratorium proposal relate, summon a meeting of the holders of those securities for the purpose of considering any moratorium proposal and giving to the trustee their opinions or directions in relation to the exercise of his or her powers.

    (2) Every meeting summoned under subclause (1), or otherwise convened by the issuer for the purpose of considering any moratorium proposal, must be summoned or convened by sending a notice by post, specifying the time and place of the meeting, to every holder of the securities to which the moratorium proposal relates at the holder's last known address not later than 21 days before the date of the proposed meeting.

    (3) The notice of a meeting referred to in subclause (2) must be accompanied by—

    • (a) the investment statement for the moratorium proposal; and

    • (b) a statement that, if votes can be cast by proxy, all proxies received before the meeting will be permitted, and of the address or addresses to which any proxies must be sent.

    (4) The chairperson of a meeting referred to in subclause (2) must be a person nominated by the trustee or any other person that may be appointed in that behalf by an ordinary majority of the holders of the securities to which the moratorium proposal relates who are present at the meeting.

14 Written resolutions in lieu of moratorium proposal meetings
  • (1) This clause applies if an issuer proposes that a moratorium proposal be accepted by a written resolution of the holders of securities rather than by a resolution at a meeting of the holders of the securities.

    (2) Every proposal for a written resolution to accept the moratorium proposal must be sent by post to every holder of the securities to which the moratorium proposal relates at the holder’s last known address not later than 21 days before the last date before which acceptances must be sent by security holders.

    (3) The proposal for a written resolution must be accompanied by—

    • (a) the investment statement for the moratorium proposal; and

    • (b) if votes can be cast by proxy, a statement of the date by which any proxies must be received and of the address or addresses to which any proxies must be sent.

15 Power to appoint receiver after moratorium proposal accepted
  • (1) This clause applies if—

    • (a) a moratorium proposal has been accepted (whether before or after these regulations come into force); and

    • (b) the trustee had a power to appoint a receiver to enforce the security under the trust deed before the moratorium proposal was accepted (whether that power arose under the trust deed or otherwise, and whether the trustee had the power only if directed by resolution of security holders or otherwise).

    (2) The issuer must, at the request in writing of the trustee or of persons holding not less than one-tenth in nominal value of the issued debt securities to which the deed and the moratorium proposal relate, summon a meeting of the holders of those securities for the purpose of voting on a resolution that the trustee be directed to appoint a receiver to enforce the security under the trust deed.

    (3) The trustee must appoint a receiver in respect of all or any of the property that is subject to a security under the trust deed if a resolution is passed at a meeting of security holders under subclause (1) that directs the trustee to appoint a receiver unless the trustee is satisfied—

    • (a) that the principal amounts or any other returns due, or to become due, under the moratorium proposal have been paid as provided in that proposal:

    • (b) that it is likely that the principal amounts and any other returns due, or to become due, under the moratorium proposal will be paid as provided in that proposal, having regard to the extent to which the issuer has achieved the forecasts and milestones disclosed to security holders as part of the moratorium proposal and any other circumstances since the moratorium proposal was accepted.

    (4) A resolution of security holders under subclause (3)(a) may be passed by the lower of the following:

    • (a) if the trustee had a power to appoint a receiver to enforce the security under the trust deed before the moratorium proposal was accepted only if directed by resolution of security holders, the same majority of security holders that would have been required to pass such a resolution before the moratorium; or

    • (b) either—

      • (i) the same majority of security holders that was required to vote in favour of the moratorium proposal in order for it to be accepted (for example, if a moratorium proposal could be accepted only if approved by a majority of 75% or higher by value, then the same majority applies under this paragraph); or

      • (ii) if no resolution of the holders of the securities to which the moratorium proposal relates was required in order for it to be accepted, persons holding not less than 50% in nominal value of the issued debt securities to which the deed and the moratorium proposal relate that attend the meeting in person, or by proxy vote, or by representative, or in any other manner permitted by the trust deed.

    (5) This clause does not limit any obligation of the issuer, or any power to appoint a receiver, that exists otherwise than under this clause.

16 Duty to provide financial statements to Registrar
  • The issuer must provide the Registrar with copies of the annual financial statements and half-yearly financial statements of the borrowing group within 20 working days of the date on which the issuer is required to provide them to the trustee under clause 7 of Schedule 15 of the Securities Regulations 2009.

Rebecca Kitteridge,
Clerk of the Executive Council.


Explanatory note

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.


Issued under the authority of the Legislation Act 2012.

Date of notification in Gazette: 17 December 2009.


Reprints notes
1 General
  • This is a reprint of the Securities (Moratorium) Regulations 2009 that incorporates all the amendments to those regulations as at the date of the last amendment to them.

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, has the status of an official version under section 17 of that Act. A printed version of the reprint produced directly from this official electronic version also has official status.

3 Editorial and format changes
4 Amendments incorporated in this reprint
  • Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70): section 5(m)