Securities Act (Friendly Societies) Exemption Notice 2011

Reprint
as at 29 March 2013

Coat of Arms of New Zealand

Securities Act (Friendly Societies) Exemption Notice 2011

(SR 2011/61)


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 (Friendly Societies) 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 29 March 2013, by clause 4 of the Securities Act (Friendly Societies) Exemption Amendment Notice 2013 (SR 2013/57).

4 Interpretation
5 Exemptions
  • (1) Every friendly society and every person acting on its behalf are exempted from the following in respect of any participatory securities of which the friendly society is the issuer:

    • (d) clauses 3 and 4 of Schedule 17 of the Regulations; and

    (2) Every friendly society and every person acting on its behalf are exempted from the following in respect of any life insurance policies of which the friendly society is the issuer:

6 Statements of securities held
  • The exemption in clause 5(1)(b) is subject to the condition that the friendly society sends, without fee, to a holder of participatory securities of which the friendly society is the issuer, a written statement that properly evidences the amount, nature, and ownership of all participatory securities held by the security holder—

    • (a) within 5 working days of receiving a request for the statement from the holder of participatory securities; and

    • (b) within 1 month of each allotment of a participatory security to the holder of participatory securities.

7 Profits of friendly society
  • The exemption in clause 5(1)(c) is subject to the condition that the registered prospectus relating to the participatory securities contains a brief description of the terms relating to the use or distribution of any profits of the friendly society.

8 Deed of participation
  • The exemption in clause 5(1)(d) is subject to the condition that the deed of participation relating to the participatory securities provides—

    • (a) that the friendly society has the following duties:

      • (i) to carry out its obligations under the terms of the offer of participatory securities, the provisions of the Friendly Societies and Credit Unions Act 1982, and the rules of the friendly society that are registered under that Act; and

      • (ii) to use its best endeavours and skill to ensure that the affairs of the friendly society are conducted in a proper and efficient manner; and

      • (iii) to use due diligence and vigilance in the exercise and performance of its functions, powers, and duties:

    • (b) that the friendly society must, at the request of the statutory supervisor or of persons holding not less than one-tenth of the number of the participatory securities (or a particular class of the participatory securities), summon a meeting of the holders of those participatory securities (or particular class of participatory securities) for the purpose of giving to the statutory supervisor their opinions or directions in relation to the exercise of the statutory supervisor's powers:

    • (c) that the statutory supervisor may on its own volition, and must at the request of persons holding not less than one-tenth of the number of the participatory securities (or a particular class of the participatory securities), summon a meeting of the holders of the participatory securities (or particular class of participatory securities) for the purpose of giving to the statutory supervisor their opinions or directions in relation to the exercise of the statutory supervisor's powers:

    • (d) that every meeting summoned under either paragraph (b) or (c)—

      • (i) must be summoned by sending by post a notice, specifying the time and place of the meeting, to every holder of the participatory securities (or particular class of participatory securities) at that person’s last known address not later than 14 days before the date of the proposed meeting; and

      • (ii) must be chaired by a person nominated by the statutory supervisor or any other person that may be appointed as the chairperson of the meeting by the holders of the participatory securities (or particular class of participatory securities) present at the meeting.

9 Registered prospectus
  • (1) The exemption in clause 5(1)(f) is subject to the condition that the registered prospectus relating to the participatory securities contains all of the information, statements, and other matters specified in the following that are applicable:

    • (a) clause 6 of Schedule 3 of the Regulations but applied as if the reference to—

      • (i) the scheme were a reference to the friendly society; and

      • (ii) the statement of financial position contained or referred to in the prospectus under clause 20 were a reference to the statement of financial position contained or referred to in the prospectus under paragraph (c) of this subclause; and

      • (iii) any interim financial statements set out in the prospectus under clause 21 were a reference to any interim financial statements set out in the prospectus under paragraph (d) of this subclause:

    • (b) clause 10 of Schedule 3 of the Regulations but applied as if the reference to a statement of financial position contained or referred to in the prospectus under clause 20 were a reference to a statement of financial position contained or referred to in the prospectus under paragraph (c) of this subclause:

    • (c) clause 20 of Schedule 3 of the Regulations but applied as if the references to the scheme were references to the friendly society:

    • (d) clause 21 of Schedule 3 of the Regulations but applied as if the references to—

      • (i) the scheme were references to the friendly society; and

      • (ii) the financial statements contained or referred to in the prospectus under clause 20 were references to the financial statements contained or referred to in the prospectus under paragraph (c) of this subclause:

    • (e) clause 22 of Schedule 3 of the Regulations but applied as if the reference to the financial statements for the scheme referred to in clause 20(1) were a reference to the financial statements for the friendly society that are referred to in the prospectus under paragraph (c) of this subclause:

    • (f) clause 23 of Schedule 3 of the Regulations but applied as if the reference to the financial statements referred to in the prospectus under clause 20(1) were a reference to the financial statements referred to in the prospectus under paragraph (c) of this subclause.

    (2) An interim statement of financial position is required under subclause (1)(d) only if the directors of the friendly society consider it necessary or desirable (after having regard to section 37A(1)(c) of the Act).

10 Audit report
  • (1) The exemption in clause 5(1)(g) is subject to the condition that the registered prospectus relating to the participatory securities contains all of the information, statements, and other matters specified in clause 25 of Schedule 3 of the Regulations that are applicable but applied as if references to—

    • (a) the scheme were references to the friendly society; and

    • (b) the financial statements contained or referred to in the prospectus under clause 20 were references to the financial statements contained or referred to in the prospectus under clause 9(1)(c) of this notice; and

    (2) The exemption in clause 5(1)(g) is subject to the further condition that every prospectus relating to the participatory securities delivered to the Registrar for registration under the Act by, or on behalf of, the friendly society has attached to it, or is accompanied by,—

    • (a) the signed auditor’s report required to be contained in the registered prospectus under subclause (1); and

    • (b) a statement, dated not earlier than 7 days before the specified date and signed by the auditor (either in the auditor’s own name or in that of the auditor’s firm), that the auditor consents to the report appearing in the registered prospectus in the form in which it appears.

11 Terms of life insurance policies
  • The exemption in clause 5(2)(b) is subject to the condition that every prospectus relating to life insurance policies of the friendly society delivered to the Registrar for registration under the Act has attached to it, or is accompanied by, a statement of all the terms of the life insurance policies to which the prospectus relates (other than terms implied by law), whether those terms are set out in the friendly society’s rules or elsewhere.

12 Securities Act (Friendly Societies) Exemption Notice 2002 revoked
13 Transitional provisions

Schedule
Friendly societies

cl 4(1)

Manchester Unity Friendly Society

The Hibernian Catholic Benefit Society

Dated at Wellington this 22nd day of March 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, which comes into force on the day after the date of its notification in the Gazette and expires on 30 September 2012, replaces the Securities Act (Friendly Societies) Exemption Notice 2002 (the 2002 notice).

This notice exempts, subject to conditions, the friendly societies named in the Schedule from various provisions of the Securities Act 1978 (the Act) and the Securities Regulations 2009 (the 2009 regulations) in respect of participatory securities and life insurance policies issued by them, including—

  • section 37(2) and (3) of the Act in respect of participatory securities (which relate to the minimum amount of subscriptions being specified in the prospectus and a statement relating to subscriptions being received by, or on behalf of, the statutory supervisor):

  • sections 51, 52, 53E, and 54 of the Act (which relate to registers of securities, inspection of those registers, the auditing of financial statements, and the issue of certificates evidencing participatory securities):

  • regulation 41 of the 2009 regulations and certain other requirements of the 2009 regulations that relate to the contents of deeds of participation:

  • various requirements of the 2009 regulations relating to the content of a registered prospectus:

  • certain requirements of the 2009 regulations relating to the supply of documents to the Registrar on registration of the prospectus.

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

  • to a large extent, the exempted requirements are duplicated in the Friendly Societies and Credit Unions Act 1982. This is reflected in the fact that the exemptions are conditional on the friendly society carrying out its obligations under the terms of the offer, the provisions of the Friendly Societies and Credit Unions Act 1982, and the rules of the friendly society:

  • the conditional exemption from the presentation of financial statements reflects the fact that friendly societies do not prepare their accounts on a separate fund-by-fund basis but complete accounts in respect of their operations as a whole:

  • the notice continues exemptions from provisions of the Act previously provided in the 2002 notice, and provides for existing exemptions from provisions of the Securities Regulations 1983 to be provided to equivalent effect from relevant provisions of the 2009 regulations. While the changes in the 2009 regulations will reduce costs for issuers and improve information for investors, they do not attempt to tailor disclosure requirements specifically for all of the circumstances to which securities law requirements apply. Accordingly, exemptions to equivalent effect continue to be required, and remain appropriate in light of the policy of exemptions for friendly societies:

  • the transitional provisions reduce the short-term compliance costs resulting from the regulatory changes for issuers that have previously relied on the 2002 notice. These issuers may continue to rely on the 2002 notice in respect of securities offered under an existing registered prospectus.

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


Issued under the authority of the Acts and Regulations Publication Act 1989.

Date of notification in Gazette: 24 March 2011.


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 (Friendly Societies) Exemption Notice 2011. The reprint incorporates all the amendments to the notice as at 29 March 2013, 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)