Securities Act (Directors' Certificates—Collective Investment Schemes) Exemption Amendment Notice 2013


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Securities Act (Directors' Certificates—Collective Investment Schemes) Exemption Amendment Notice 2013

Pursuant to sections 70B and 70D 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).


1 Title
  • This notice is the Securities Act (Directors' Certificates—Collective Investment Schemes) Exemption Amendment Notice 2013.

2 Commencement
  • This notice comes into force on 31 December 2013.

3 Principal notice
4 Clause 3 replaced (Expiry)
  • Replace clause 3 with:

    3 Revocation
    • This notice is revoked on the close of 30 November 2016.

5 Clause 5 amended (Application if prospectus relates to 2 or more types of securities)
  • In clause 5(2)(b), replace clause 6, or clauses 8 and 10, with clauses 8 and 10.

6 Clause 8 amended (Exemption from section 37A(1A)(c)(i) of Act in respect of renewals before 31 March 2013)
  • (1) In the heading to clause 8, delete before 31 March 2013.

    (2) In clause 8, delete on or before 31 March 2013.

Dated at Auckland this 16th day of December 2013.

Simone Robbers,
Head of Primary Regulatory Operations.

Statement of reasons

This notice, which comes into force on 31 December 2013, amends the Securities Act (Directors’ Certificates—Collective Investment Schemes) Exemption Notice 2011 (the principal notice). The principal notice exempts, subject to conditions, the issuers of certain collective investment schemes from section 37A(1A)(c)(i) of the Securities Act 1978 (the Act). The effect of the amendment is that, instead of expiring on the close of 31 December 2013, the principal notice will remain in force until the close of 30 November 2016.

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

  • the principal notice provides relief to issuers of liquid collective investment schemes from the requirement to register a new prospectus in circumstances where an existing prospectus is not false or misleading, but there has been a material and adverse change in the financial circumstances of the scheme, either because of general market volatility or because investment redemptions have exceeded new investments in the scheme. The FMA considers that the policy reasons for the principal notice remain valid and relevant. Consultation with market participants by the FMA demonstrates that issuers may need to continue to rely on the exemption in the event that the market is subject to volatility:

  • the conditions of the principal notice ensure that key information relating to a scheme's adverse change in financial position is easily available and is provided in an understandable form that enables investors to make informed decisions about their investment options:

  • a requirement to immediately register a new prospectus would impose costs on the issuer that would not be matched by the benefits to investors of a new prospectus.

In light of the limited application of the exemption to liquid collective investment schemes, and the conditions of the exemption, which require registration and publication of updated financial information about such schemes, the FMA is satisfied that the exemption is not broader than is reasonably necessary and will not cause significant detriment to subscribers for the schemes to which the exemption relates.

Issued under the authority of the Legislation Act 2012.

Date of notification in Gazette: 19 December 2013.

This notice is administered by the Financial Markets Authority.