Dated at Wellington this 16th day of December 2014.
Statement of reasons
This notice, which comes into force on 19 December 2014, amends the Securities Act (Banks’ Regulatory Capital) Exemption Notice 2014 (the principal notice). Among other things, the principal notice provides an exemption for registered banks and their parent entities from the requirements in the Securities Act 1978 (the Act) to register a prospectus and provide a separate investment statement for equity securities to be issued on conversion of certain regulatory capital instruments. However, this exemption applies only if certain conditions are met. This notice inserts 2 new conditions into the principal notice and makes technical amendments to 2 existing conditions. The first new condition requires a registered bank seeking to rely on the exemption to include additional statements in the investment statement under which the relevant convertible security will be issued. The second new condition requires the registered bank to issue the relevant convertible security on terms that include a requirement to comply (and to continue to comply after the notice is revoked) with the conditions in clause 6(1)(e) to (i) of the principal notice. However, if the issuer of the equity security on conversion is the registered bank’s parent, the requirement to comply with some conditions becomes a requirement to use reasonable endeavours to ensure that the parent complies with those conditions (to the extent that compliance with those conditions is within the control of the parent). The 2 new conditions apply in respect of investment statements that are prepared as at a date that is on or after the commencement of this notice.
The principal notice applies for the purposes of the transitional provisions under the Financial Markets Conduct Act 2013 and the Financial Markets Conduct Regulations 2014. (See, in particular, Schedule 4 of that Act and clause 29 of Schedule 1 of those regulations.)
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 applies only to registered banks issuing regulatory capital instruments in accordance with the requirements set by the Reserve Bank of New Zealand and the Australian Prudential Regulation Authority. As a result, the FMA remains of the view that the exemption as varied is not broader than is reasonably necessary to address the matters that gave rise to it.
Date of notification in Gazette: 18 December 2014.
This notice is administered by the Financial Markets Authority.