Securities Act (Overseas Issuers—Audit Requirement) Exemption Notice 2013

2013/129

Coat of Arms of New Zealand

Securities Act (Overseas Issuers—Audit Requirement) Exemption Notice 2013

Pursuant to section 70B of the Securities Act 1978, the Financial Markets Authority gives the following notice (to which is appended a statement of reasons of the Financial Markets Authority).

Notice

1 Title
  • This notice is the Securities Act (Overseas Issuers—Audit Requirement) Exemption Notice 2013.

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

3 Revocation
  • This notice is revoked on the close of 30 September 2017.

4 Interpretation
5 Exemption for exempt issuers
  • Every exempt issuer and every person acting on its behalf are exempted from section 53E of the Act.

6 Condition
  • The exemption in clause 5 is subject to the condition that the exempt issuer must ensure that its specified financial statements are audited at least once a year by an approved auditor.

Dated at Wellington this 18th day of April 2013.

Sue Brown,
Head of Primary Regulatory Operations.


Statement of reasons

This notice, which comes into force on the day after the date of its notification in the Gazette and is revoked on the close of 30 September 2017, exempts issuers that rely on Part 1 of the Financial Reporting Act (Australian Issuers) Exemption Notice 2013, the Financial Reporting Act (Overseas Issuers) Exemption Notice 2013, or the Financial Reporting Act (Dual-listed Issuers) Exemption Notice 2013 (together, the FRA class notices) from section 53E of the Securities Act 1978 (the Act). Section 53E requires the financial statements of those issuers to be audited by a qualified auditor at least once a year. The notice instead requires the issuers to have an audit at least once in each year by an auditor who is qualified under the laws of the issuer’s home jurisdiction.

The Financial Markets Authority, after satisfying itself as to the matters set out in section 70B(2) of the Act, considers it appropriate to grant the exemption because—

  • issuers that are able to rely on this notice are overseas incorporated issuers that have been exempted from the requirements of the Financial Reporting Act 1993 to prepare, have audited, and register financial statements, subject to conditions that require those issuers to prepare financial statements in accordance with the laws of their home jurisdiction, have those financial statements audited by a person qualified to act as an auditor in their home jurisdiction, and register those audited financial statements in New Zealand. In addition to the audit requirements of the Financial Reporting Act 1993, section 53E of the Securities Act 1978 imposes a further requirement for an annual audit. If the exempt issuers were not granted an exemption from section 53E, they would be required to have an audit by a New Zealand licensed auditor each year even though they had been exempted from the requirement to do so in the Financial Reporting Act 1993:

  • the FRA class notices are only available to issuers in circumstances where the issuer has offered securities in their home jurisdiction, and the offer in New Zealand is an extension of that offer in their home jurisdiction. Issuers are not able to rely on this notice where they have made an offer solely in New Zealand:

  • the Financial Markets Authority has had regard to the financial reporting and audit requirements, and the auditor oversight regime, in each of the jurisdictions in which an exempt issuer may be incorporated. In these circumstances, the Financial Markets Authority considers that there will be no significant detriment to subscribers who are members of the public in New Zealand as a result of these issuers being audited by their home jurisdiction auditor instead of a New Zealand licensed auditor:

  • the exemptions address particular difficulties faced by issuers that have been exempted from the requirements of the Financial Reporting Act 1993 to have their financial statements audited by a licensed auditor. The FRA class notices, which provide those exemptions from the Financial Reporting Act 1993, are designed to address specific issues for specific classes of overseas incorporated issuers. Further, many of the issuers that can rely on the FRA class exemption notices will already have exemptions from section 53E of the Securities Act 1978 because of the circumstances in which they originally offered securities to the public. Accordingly, the Financial Markets Authority is satisfied that the extent of the exemption is not broader than is reasonably necessary to address the matters that gave rise to the exemption.


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

Date of notification in Gazette: 26 April 2013.

This notice is administered by the Financial Markets Authority.