Securities Act (Employee Share Purchase Schemes—Listed Companies) Exemption Notice 2011

Reprint
as at 28 September 2012

Coat of Arms of New Zealand

Securities Act (Employee Share Purchase Schemes—Listed Companies) Exemption Notice 2011

(SR 2011/6)


Note

Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this reprint.

A general outline of these changes is set out in the notes at the end of this reprint, together with other explanatory material about this reprint.

This notice is administered by the Financial Markets Authority.


Pursuant to the Securities Act 1978, the Securities Commission gives the following notice (to which is appended a statement of reasons of the Securities Commission).

Notice

1 Title
  • This notice is the Securities Act (Employee Share Purchase Schemes—Listed Companies) Exemption Notice 2011.

2 Commencement
  • This notice comes into force on the day after the date of its notification in the Gazette.

3 Expiry
  • This notice expires on the close of 30 September 2017.

    Clause 3: amended, on 28 September 2012, by clause 3 of the Securities Act (Extension of Term, Amendment, and Transitional Provision) Exemption Notice 2012 (SR 2012/294).

4 Interpretation
  • (1) In this notice, unless the context otherwise requires,—

    Act means the Securities Act 1978

    eligible person means, in relation to a listed company,—

    • (a) an employee or a director of the listed company or of any of its subsidiaries; or

    • (b) a person who provides personal services (other than as an employee) principally to the listed company or any of its subsidiaries; or

    • (c) a relative of a person described in paragraph (a) or (b); or

    • (d) a trustee of a trust of which a person described in paragraph (a), (b), or (c) is a beneficiary; or

    • (e) a company that is controlled by a person described in paragraph (a), (b), (c), or (d) (within the meaning of subclause (2))

    employee share purchase scheme means a scheme established by a listed company under which eligible persons may acquire specified equity securities issued by the listed company

    listed company means—

    • (a) a company that is a party to a listing agreement with NZX Limited; or

    • (b) NZX Limited

    Regulations means the Securities Regulations 2009

    specified equity security means an ordinary share in a listed company, or any interest in or right to an ordinary share in a listed company, that is offered under the listed company's employee share purchase scheme.

    (2) For the purposes of paragraph (e) of the definition of eligible person, a company is controlled by a person if—

    • (a) the person has the power, directly or indirectly, to exercise, or control the exercise of, the rights to vote attached to more than 50% of the voting securities of the company; or

    • (b) the person controls the composition of the board of the company (within the meaning of section 7 of the Companies Act 1993, which, for this purpose, is applied with all necessary modifications).

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

5 Exemptions
  • Every listed company, every subsidiary of a listed company, every trustee of a listed company's employee share purchase scheme, and every person acting on behalf of any or all of them are exempted from the following provisions in respect of specified equity securities:

    • (c) clause 21 of Schedule 1 of the Regulations, to the extent that it requires the registered prospectus to contain the dates, time periods, and price terms relevant to the particular offer under the employee share purchase scheme and information personal to a person to whom the offer is made; and

    • (e) regulation 30 of the Regulations, in relation to advertisements containing information personal to a person to whom the advertisement is distributed.

6 Condition that equity securities allotted only to eligible persons
  • The exemptions in clause 5 are subject to the condition that the specified equity securities are allotted only to the following persons:

    • (a) persons who are eligible persons at the time of the allotment of the specified equity securities:

    • (b) in the case of specified equity securities that are allotted on the exercise of rights or options to acquire shares, persons who are eligible persons at the time of allotment of those rights or options.

7 Condition that registered prospectus contain or be accompanied by financial statements
  • The exemption in clause 5(a) is subject to the condition that it is a term of the offer of the specified equity securities that every copy of the registered prospectus sent to a person under section 54B of the Act will contain, or be accompanied by,—

    • (b) if no financial statements for the group have been registered under the Financial Reporting Act 1993, financial statements for the group prepared and audited as if they were to be registered under that Act for—

      • (i) the most recently completed accounting period in respect of which the financial statements have been prepared; or

      • (ii) if the listed company has not completed its first accounting period, the period from the date of commencement of business and ending on a stated date that is not more than 4 months before the specified date.

8 Condition that terms of employee share purchase scheme available
  • The exemptions in clause 5 are subject to the condition that the investment statement relating to the specified equity securities contains, or is accompanied by,—

    • (a) a brief description of the terms of the employee share purchase scheme; and

    • (b) a description of how a person who is able to acquire securities under the employee share purchase scheme may, free of charge, inspect, or obtain a copy of, the terms of the employee share purchase scheme.

9 Condition that disclosure obligation information available
  • The exemptions in clause 5 are subject to the condition that the investment statement and the registered prospectus relating to the specified equity securities contains, or is accompanied by,—

    • (a) a statement to the effect that—

      • (i) the specified equity securities, or the ordinary shares in the listed company that relate to the specified equity securities, are quoted or have been accepted for quotation (as the case may be) on a securities market operated by NZX Limited; and

      • (ii) the listed company is subject to a disclosure obligation that requires it to notify certain material information to NZX Limited for the purpose of that information being made available to participants in that securities market; and

    • (b) a description of how a person who is able to acquire securities under the employee share purchase scheme may obtain that material information.

10 Conditions of exemption from clause 21 of Schedule 1 of Regulations
  • (1) The exemption in clause 5(c) is subject to the further condition that, before a person subscribes for specified equity securities, the listed company provides the person with a document containing the information that would, but for this exemption, be required by clause 21 of Schedule 1 of the Regulations to be contained in the registered prospectus.

    (2) Subclause (1) does not require a document provided to a person under subclause (1) to contain information personal to any other person.

11 Condition of exemption from clause 5(1)(c) of Schedule 13 of Regulations
  • The exemption in clause 5(d) is subject to the further condition that, before a person subscribes for specified equity securities, the listed company provides the person with a document containing the information required by clause 5(1)(c) of Schedule 13 of the Regulations.

12 Condition of exemption from regulation 30 of Regulations
  • The exemption in clause 5(e) is subject to the further condition that the listed company has complied with regulation 30 of the Regulations in relation to another advertisement and the only difference between the 2 advertisements is information personal to a person to whom the advertisement is distributed.

13 Revocation
14 Transitional provisions
  • (1) The exemption in clause 5(a) from section 37A(1)(c) of the Act does not apply to a prospectus that was registered before the commencement of this notice.

    (2) If, before 1 July 2010, a listed company offered specified equity securities in reliance on the Securities Act (Employee Share Purchase Schemes—Listed Companies) Exemption Notice 2006 under a prospectus that was registered before that date, the listed company may continue to rely on that notice in respect of securities offered under that prospectus (as if that notice continued in force after 28 February 2011).

    (3) If, on or before 28 February 2011, a listed company offered specified equity securities in reliance on the Securities Act (Employee Share Purchase Schemes—Listed Companies) Exemption Notice 2006 and the Securities Act (Transition to Securities Regulations 2009) Exemption Notice 2010 under a prospectus that is registered on or before that date, the listed company may continue to rely on those notices in respect of securities offered under that prospectus (as if both of those notices continued in force after 28 February 2011).

    (4) However, subclauses (2) and (3)—

    • (a) cease to apply to a prospectus on an amendment being made to the prospectus for the purpose of preventing it from being false or misleading in a material particular by reason of failing to refer, or give proper emphasis, to adverse circumstances; and

    • (b) cease to apply to a prospectus if an investment statement relating to the specified equity securities is distributed by, or on behalf of, the listed company after 31 October 2011 that does not comply with clause 9; and

    • (c) apply after 31 October 2011 to a prospectus only if the prospectus is amended so that it contains the statement and description referred to in clause 9.

    Clause 14(2): amended, on 25 March 2011, by clause 17(2) of the Securities Act (Employee Share Purchase Schemes—Unlisted Companies) Exemption Notice 2011 (SR 2011/58).

    Clause 14(3): amended, on 25 March 2011, by clause 17(3) of the Securities Act (Employee Share Purchase Schemes—Unlisted Companies) Exemption Notice 2011 (SR 2011/58).

    Clause 14(4)(b): amended, on 22 April 2011, by clause 4 of the Securities Act (Employee Share Purchase Schemes—Listed Companies) Exemption Amendment Notice 2011 (SR 2011/107).

    Clause 14(4)(c): amended, on 25 March 2011, by clause 17(4) of the Securities Act (Employee Share Purchase Schemes—Unlisted Companies) Exemption Notice 2011 (SR 2011/58).

Dated at Wellington this 21st day of February 2011.

The Common Seal of the Securities Commission was affixed in the presence of:

[Seal]

J Diplock,
Chairperson.


Statement of reasons

Note: The following statement of reasons should be read in conjunction with the statement(s) of reasons appended to the:

This notice comes into force on the day after the date of its notification in the Gazette and expires on 30 September 2012. It replaces the Securities Act (Employee Share Purchase Schemes—Listed Companies) Exemption Notice 2006 (the 2006 notice).

This notice is on substantially the same terms as the 2006 notice. However,—

This notice exempts listed companies (subject to conditions) in respect of equity securities issued by those companies that are offered under employee share purchase schemes from section 37A(1)(c) of the Securities Act 1978 (the Act) and from various prospectus content requirements in Schedule 1 of the Securities Regulations 2009 (the 2009 regulations). The effect is to allow listed companies to use an evergreen short form prospectus.

The Securities Commission considers that it is appropriate to grant the exemptions because—

  • the Commission recognises the desirability of encouraging employee participation in a company that an employee works for through share ownership. It also recognises the information publicly available to employees who are prospective investors in listed companies, and the ability of employees to sell their shares on an established market (including if they leave employment with the company). In these circumstances, the exemptions in this notice lower compliance costs for listed companies that operate ongoing employee share purchase schemes, while ensuring that sufficient information is provided to employees to make informed decisions about participation in these schemes; and

  • issuers may provide eligible persons with personalised offer documents. This recognises that the details of the offers may differ from one employee to the next, particularly in respect of schemes that provide performance-based incentives; and

  • the transitional provisions reduce the compliance costs resulting from the regulatory changes for issuers that have previously relied on the 2006 notice. These issuers may continue to offer and allot securities under an existing registered prospectus unless the prospectus needs to be amended to prevent it from being false or misleading in a material particular (see section 37A(1)(b) of the Act). In addition, the transitional provisions can be relied on after 30 June 2011 only if the prospectus and investment statement have been amended to meet the disclosure requirements of clause 9.

Note: The preceding statement of reasons should be read in conjunction with the statement(s) of reasons appended to the:


Contents

  • 1General

  • 2Status of reprints

  • 3How reprints are prepared

  • 4Changes made under section 17C of the Acts and Regulations Publication Act 1989

  • 5List of amendments incorporated in this reprint (most recent first)


Notes
1 General
  • This is a reprint of the Securities Act (Employee Share Purchase Schemes—Listed Companies) Exemption Notice 2011. The reprint incorporates all the amendments to the notice as at 28 September 2012, as specified in the list of amendments at the end of these notes.

    Relevant provisions of any amending enactments that contain transitional, savings, or application provisions that cannot be compiled in the reprint are also included, after the principal enactment, in chronological order. For more information, see http://www.pco.parliament.govt.nz/reprints/ .

2 Status of reprints
  • Under section 16D of the Acts and Regulations Publication Act 1989, reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by the amendments to that enactment. This presumption applies even though editorial changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in the reprint.

    This presumption may be rebutted by producing the official volumes of statutes or statutory regulations in which the principal enactment and its amendments are contained.

3 How reprints are prepared
  • A number of editorial conventions are followed in the preparation of reprints. For example, the enacting words are not included in Acts, and provisions that are repealed or revoked are omitted. For a detailed list of the editorial conventions, see http://www.pco.parliament.govt.nz/editorial-conventions/ or Part 8 of the Tables of New Zealand Acts and Ordinances and Statutory Regulations and Deemed Regulations in Force.

4 Changes made under section 17C of the Acts and Regulations Publication Act 1989
  • Section 17C of the Acts and Regulations Publication Act 1989 authorises the making of editorial changes in a reprint as set out in sections 17D and 17E of that Act so that, to the extent permitted, the format and style of the reprinted enactment is consistent with current legislative drafting practice. Changes that would alter the effect of the legislation are not permitted.

    A new format of legislation was introduced on 1 January 2000. Changes to legislative drafting style have also been made since 1997, and are ongoing. To the extent permitted by section 17C of the Acts and Regulations Publication Act 1989, all legislation reprinted after 1 January 2000 is in the new format for legislation and reflects current drafting practice at the time of the reprint.

    In outline, the editorial changes made in reprints under the authority of section 17C of the Acts and Regulations Publication Act 1989 are set out below, and they have been applied, where relevant, in the preparation of this reprint:

    • omission of unnecessary referential words (such as of this section and of this Act)

    • typeface and type size (Times Roman, generally in 11.5 point)

    • layout of provisions, including:

      • indentation

      • position of section headings (eg, the number and heading now appear above the section)

    • format of definitions (eg, the defined term now appears in bold type, without quotation marks)

    • format of dates (eg, a date formerly expressed as the 1st day of January 1999 is now expressed as 1 January 1999)

    • position of the date of assent (it now appears on the front page of each Act)

    • punctuation (eg, colons are not used after definitions)

    • Parts numbered with roman numerals are replaced with arabic numerals, and all cross-references are changed accordingly

    • case and appearance of letters and words, including:

      • format of headings (eg, headings where each word formerly appeared with an initial capital letter followed by small capital letters are amended so that the heading appears in bold, with only the first word (and any proper nouns) appearing with an initial capital letter)

      • small capital letters in section and subsection references are now capital letters

    • schedules are renumbered (eg, Schedule 1 replaces First Schedule), and all cross-references are changed accordingly

    • running heads (the information that appears at the top of each page)

    • format of two-column schedules of consequential amendments, and schedules of repeals (eg, they are rearranged into alphabetical order, rather than chronological).

5 List of amendments incorporated in this reprint (most recent first)