Dated at Wellington this 25th day of March 2013.
Head of Primary Regulatory Operations.
Statement of reasons
This notice comes into force on the day after the date of its notification in the Gazette and is revoked on the close of 28 February 2018. This notice revokes and replaces the Financial Reporting Act (Overseas Companies) Exemption Notice 2007.
This notice applies to directors of certain issuers incorporated in Australia, Canada, Hong Kong, the United Kingdom, and the United States of America.
The context is that directors of those issuers may use this notice in conjunction with the Securities Act (Overseas Companies) Exemption Notice 2013 or other overseas companies notices that correspond to that notice (the overseas companies securities notices). Those notices exempt offers of quoted securities to persons who already hold securities issued by that issuer or by a related body corporate that is a promoter of the offer.
This notice exempts directors of those issuers from the following provisions of the Financial Reporting Act 1993 (the Act):
These exemptions are granted on the conditions that the issuer prepares the financial statements that they are required to prepare, and files them, under the financial reporting requirements of their respective home jurisdictions.
The principal changes from the Financial Reporting Act (Overseas Companies) Exemption Notice 2007 are as follows:
Canada and Hong Kong are added as specified jurisdictions:
this notice clarifies that the exemptions apply only if the issuer is regulated as an issuer for the purposes of financial reporting requirements in the jurisdiction in which it is incorporated:
this notice requires the issuer to prepare financial statements for its, and its group's, New Zealand business, either in accordance with the financial reporting requirements of their home jurisdiction or in accordance with the Act:
this notice clarifies that the issuer is not required to prepare both group and parent financial statements if this is not required in the home jurisdiction. This notice permits issuers to prepare just group financial statements if this is permitted by the requirements of their home jurisdiction. The general position overseas is that the issuer will be required to prepare financial statements for the issuer itself if it has no subsidiaries and for the group if it has subsidiaries. If group financial statements are prepared, home jurisdiction laws will determine whether there are parent financial statements or whether information about the parent is in the notes.
The Financial Markets Authority, after satisfying itself as to the matters set out in section 35A(2) of the Act, considers it appropriate to grant the exemptions because—
there will not be any significant detriment to subscribers in New Zealand because the exemptions apply only to issuers that already have New Zealand security holders that become security holders as a result of a public offer in New Zealand. Security holders in these issuers will already be familiar with the format of financial reports prepared by these issuers:
the financial reporting and audit requirements that must be complied with by issuers in these jurisdictions that have relied, or rely, on the overseas companies securities notices will provide equivalent information to New Zealand security holders as would be provided by financial statements prepared in accordance with New Zealand law requirements:
the exemption from the registration requirement recognises that overseas companies that are issuers only under the overseas companies securities notices have a comparatively minor association with New Zealand securities law, which does not justify the imposition of an ongoing obligation to register financial statements in New Zealand:
the exemptions address the particular circumstances of offers made under the overseas companies securities notices, which provide exemptions only where the offer in New Zealand is ancillary to certain offers of listed securities in a specified jurisdiction, and provides relief from the ongoing financial reporting requirements triggered by the allotment of securities under those notices. Given the limited application of the exemptions, they are not broader than reasonably necessary to address the matters to which they relate.
Date of notification in Gazette: 28 March 2013.
This notice is administered by the Financial Markets Authority.