Dated at Auckland this 21st day of November 2016.
Statement of reasons
This notice comes into force on 1 December 2016 and is revoked on the close of 30 November 2021.
This notice exempts issuers from the ongoing disclosure requirements, governance requirements, financial reporting requirements, auditing requirements, and certain transitional requirements of the Financial Markets Conduct Act 2013 (the Act) in relation to securities previously offered in reliance on certain class exemptions or individual exemptions granted by notice under the Securities Act 1978 (the relevant Securities Act 1978 exemptions).
The Financial Markets Authority (the FMA), after satisfying itself as to the matters set out in section 557 of the Act, considers it appropriate to grant the exemptions because—
the relevant Securities Act 1978 exemptions under which the securities were offered recognised the adequacy of the relevant overseas regimes that applied to those securities and, as such, the appropriateness of the relief from certain requirements under New Zealand’s securities laws. These considerations were assessed when each of the various notices was granted and the FMA (or the Securities Commission) was satisfied with the requirements applying under the overseas regimes, particularly given the circumstances under which those offers could be made; and
investors in the securities invested on the basis of the regulatory regime in place at the time of the offer. It would now be a significant burden for issuers of these securities that have been previously offered under the Securities Act 1978 to New Zealand investors (in some cases many years ago) to comply with increased regulatory requirements under the Act; and
given the comprehensive relief provided to these issuers under the relevant Securities Act 1978 exemptions and continued under this exemption, the requirement to notify New Zealand investors that the Act will apply after their securities transition to the new regime would be both misleading and confusing. Moreover, the burden on issuers to provide the notices would be both onerous and costly; and
for these reasons, the FMA is satisfied that the granting of the exemptions is desirable in order to promote the purposes of the Act, specifically to avoid unnecessary compliance costs and to promote flexibility in the financial markets through the appropriate recognition of overseas regimes; and
the exemptions are limited to securities offered under certain exemptions granted under the Securities Act 1978 that recognised the adequacy of overseas regimes. Further, the financial reporting and auditing relief is limited to entities that have financial reporting obligations under the Act only as a result of having issued securities to New Zealand investors that were offered under one of these exemptions. If the entity is required to do financial reporting for another reason, then those obligations will still apply. As such, the FMA is satisfied that the exemptions are not broader than is reasonably necessary to address the matters that gave rise to them.
Date of notification in Gazette: 24 November 2016.
This notice is administered by the Financial Markets Authority.