Dated at Wellington this 16th day of December 2011.
Head of Primary Regulatory Operations.
Statement of reasons
This notice, which comes into force on 20 December 2011 and expires on 30 November 2016, replaces the Securities Act (Multiple Participants Superannuation Schemes) Exemption Notice 1998 (the 1998 notice).
This notice is on substantially the same terms as the 1998 notice. However, the notice relates to the Securities Regulations 2009 (rather than the Securities Regulations 1983). In addition, certain changes have been made to clarify the terms and conditions of the notice.
The notice exempts superannuation trustees, employers, and certain other participants in multiple participant superannuation schemes from the following provisions of the Securities Act 1978 (the Act) and the Securities Regulations 2009 (the 2009 regulations):
section 41(1)(b)(ii) of the Act. This provision requires the prospectus to be signed by the promoters (which may include participants and directors of participants):
regulation 21 of the 2009 regulations (which requires matters in the investment statement to be set out under particular questions):
various requirements in Schedule 6 of the 2009 regulations (which relate to the content of a prospectus for a superannuation scheme). The exemptions mainly relate to information that would otherwise be required to be disclosed about participants and directors of participants (as promoters) and admission deeds entered into by those participants. In the case of clause 4(1) of that Schedule (which relates to the date of the admission deed if it is a trust deed for the scheme), the conditions have been modified. The conditions now require the investment statement to refer to the availability of the admission deed (rather than merely providing for the registration of the deed):
clause 3(6) of Schedule 13 of the 2009 regulations (which requires the investment statement to specify the names and addresses of participants and directors of participants as promoters).
The Financial Markets Authority, after satisfying itself of the matters set out in section 70B(2) of the Act, considers it appropriate to grant the exemptions set out in this notice for the following reasons:
employers and other sponsors who join multiple participant superannuation schemes may be promoters (as defined in the Act). If so, those participants would need to sign and include their details in the prospectus. This is likely to be impractical for schemes with numerous participants and involve significant compliance costs:
the exemptions recognise that the most relevant information for investors will be the details relating to their particular employer’s (or sponsor's) participation in the scheme rather than the details of other participants in the scheme. The notice provides for information specifically about a particular participant to be included in an investment statement instead of the prospectus. This provides for each investor to receive information that is relevant to their investment decision without having to review information relating to other participants in the scheme, which might be confusing:
the 2009 regulations have amended the regulatory requirements to allow an agent of a director to sign the certificates relating to the distribution of the investment statement. The exemption in the 1998 notice allowing an agent to sign these certificates is therefore no longer required:
this notice continues an exemption from a provision of the Act previously provided in the 1998 notice, and provides for existing exemptions from provisions of the Securities Regulations 1983 to be extended to equivalent provisions of the 2009 regulations (with the effect that the participants in multiple participant superannuation schemes will be able to continue to rely on those exemptions in respect of offers of securities under the 2009 regulations). While the changes introduced by the 2009 regulations will reduce costs for issuers and improve information for investors, they do not attempt to tailor disclosure requirements for the vast range of persons to which securities law requirements apply. Accordingly the amendments to the regulations have not addressed all of the difficulties faced by participants in multiple participant superannuation schemes in complying with these particular regulations. Exemptions from the equivalent provisions continue to be required, and remain appropriate in light of the policy of the 1998 notice:
in light of the alternative disclosure obligations prescribed by the conditions of the notice, the Financial Markets Authority considers that the exemptions will not cause significant detriment to subscribers, and that the exemptions are not broader than is reasonably necessary to address the matters that gave rise to the exemptions:
the transitional provisions reduce the short-term compliance costs resulting from the regulatory changes for issuers that have previously relied on the 1998 notice.
Date of notification in Gazette: 19 December 2011.
This notice is administered by the Financial Markets Authority.