Financial Markets Conduct (Small Co-operatives) Exemption Notice 2016

Schedule 1 Contents of disclosure document

cl 7

Disclosure document summary

The disclosure document must have sections, each of which is headed up, is ordered, and contains information as follows:

1 What is this?

The disclosure document must contain a statement in the following form:

This is an offer of [name of financial products (for example, co-operative shares of ABC limited)]. [Name of financial products] give you a stake in the ownership of [name of issuer].

You could receive a return reflecting the performance of [name of issuer] through [specify mechanism for receiving returns (for example, rebates)].

If [name of issuer] runs into financial difficulties and is wound up, you will be paid only after all creditors and holders of preference shares have been paid. You may lose some or all of your investment.

2 About [name of issuing group]

The disclosure document must contain a brief description of the issuing group’s business.

Example

ABC limited is a co-operative company providing fruit packaging and cool storage services to fruit growers in XYZ region.

3 Purpose of this offer

The disclosure document must contain a brief description of the purpose of the offer (including what the money raised under the offer is to be used for).

4 Key terms of the offer

(1)

The disclosure document must contain the key terms of the offer briefly summarised in a table, including—

(a)

a brief description of the co-operative shares being offered (for example, This is an offer of co-operative shares in ABC Limited); and

(b)

the fixed price of, or other fixed consideration for, the co-operative shares (if any) or the (fixed or indicative) range within which that price or consideration may be fixed (if any); and

(c)

the intended dates on which the offer opens and closes; and

(d)

the number or amount of the co-operative shares being offered and the percentage of the total co-operative shares of the same class on issue that that number or amount will represent immediately after the issue or sale; and

(e)

if a holder of the co-operative shares will or may be liable to make further payments or to pay fees or charges relating to those securities, a brief description of the nature of the liability, fees, or charges.

(2)

Subclause (3) applies if either or both of the following apply:

(a)

the co-operative shares will not be issued or transferred unless applications for a minimum number of those securities are received (see section 77(1)(a) of the Act) (the minimum number):

(b)

there is a maximum number of co-operative share securities being offered (the maximum number).

(3)

The information under subclause (1)(d) must be disclosed on the basis of the minimum number or the maximum number (or both), as the case may be.

(4)

Subclause (1)(d) does not apply to a continuous issue disclosure document.

(5)

In subclause (4), continuous issue disclosure document means a disclosure document that relates to co-operative shares that the issuer, in the ordinary course of its business, continuously offers.

5 How you can get your money out

(1)

The disclosure document must include whichever of the following statements best applies:

(a)

[Name of issuer] does not intend to quote these [name of financial products] on a licensed market in New Zealand but they will be able to be traded on the [describe established market for trading]. This means you may be able to sell them on [name of established market] if there are interested buyers. You may get less than you invested. The price will depend on the demand for the [name of financial products].

(b)

[Name of issuer] does not intend to quote these [name of financial products] on a market licensed in New Zealand, and there is no other established market for trading them. This means that you may not be able to sell your [name of financial products].

(c)

These [name of financial products] cannot be sold or transferred.

(2)

The disclosure document must contain a description of the ability to redeem the co-operative shares (if any).

6 Key drivers of returns

The disclosure document must give a brief summary of what the issuer considers to be—

(a)

the current and future aspects of the issuing group’s business that have, or may have, the most impact on the financial performance of the business; and

(b)

the key strategies and plans for those aspects of the business.

7 Key risks affecting this investment

(1)

The disclosure document must include a statement in the following form:

[Name of issuer] considers that the most significant risk factors that could affect the returns received from holding these [name of financial products] are [brief summary of the most significant risk factors that the issuer considers may affect the returns].

This summary does not cover all the risks of investing in [name of financial products].

(2)

The brief summary under subclause (1) must include particulars that make it clear why each circumstance is of particular significance in relation to the particular issuer or the particular co-operative shares (as compared to other issuers or co-operative shares).

8 [Name of issuing group’s] financial information

The disclosure document must include a statement in the following form:

Under the terms of the Financial Markets Conduct (Small Co-operatives) Exemption Notice 2016, on which this offer relies, no financial information regarding [name of issuer] is required to be provided.