Dated at Wellington this 24th day of September 2012.
Head of Primary Regulatory Operations.
Statement of reasons
This notice, which comes into force on 1 October 2012 and expires on 30 September 2017, replaces the Securities Act (Sharebrokers) Exemption Notice 1984 (the 1984 notice).
This notice exempts an issuer from regulation 30 of the Securities Regulations 2009 in respect of advertisements distributed on its behalf by a broker. Regulation 30 requires a certificate in relation to an advertisement.
The provisions of the 1984 notice have been carried forward with little change of substance. However, changes have been made to—
The Financial Markets Authority, after satisfying itself as to the matters set out in section 70B(2) of the Securities Act 1978, considers it appropriate to grant the exemption because,—
where a broker underwrites or is otherwise associated with the issue or the issuer, an offer of securities that is made in a broker’s letter may be an advertisement (as defined in the Securities Act 1978). Accordingly, without an exemption, any such letter could not be distributed without prior submission to the issuer for review and the completion of an advertisement certificate. In providing relief from this requirement, the 1984 notice recognised that this is an impractical impediment to brokers communicating with their clients and the responsibilities brokers already have in relation to their clients:
despite minor changes introduced by the Securities Regulations 2009 to advertising requirements, without an exemption, a certificate would still be required in these circumstances. Accordingly, this exemption continues to be required and remains appropriate in light of the policy of the notice:
changes made in this notice also recognise the repeal of the Sharebrokers Act 1908 and the alternative relevance of the Financial Advisers Act 2008:
given the limited application of the notice to advertisements distributed by brokers on behalf of an issuer, and the obligations imposed on brokers to their clients, the Financial Markets Authority considers that the exemption is not broader than is reasonably necessary to address the matters that gave rise to the exemption and will not cause significant detriment to subscribers.
Date of notification in Gazette: 27 September 2012.
This notice is administered by the Financial Markets Authority.