Overseas Investment (Commencement of Permanent Call-in Regime) Amendment Regulations 2021

2021/116

Coat of Arms of New Zealand

Overseas Investment (Commencement of Permanent Call-in Regime) Amendment Regulations 2021

Patsy Reddy, Governor-General

Order in Council

At Wellington this 24th day of May 2021

Present:
The Right Hon Jacinda Ardern presiding in Council

These regulations are made under sections 37B, 61, and 127 of the Overseas Investment Act 2005

(a)

on the advice and with the consent of the Executive Council; and

(b)

to the extent that the regulations are made under section 61 of that Act, on the recommendation of the Minister of Finance; and

(c)

to the extent that the regulations are made under section 127 of that Act, on the recommendation of the Minister of Finance made after having regard to New Zealand’s international obligations.

Regulations

1 Title

These regulations are the Overseas Investment (Commencement of Permanent Call-in Regime) Amendment Regulations 2021.

2 Commencement

These regulations come into force on 7 June 2021.

3 Principal regulations

These regulations amend the Overseas Investment Regulations 2005.

4 Regulation 3 amended (Interpretation)

In regulation 3(1), insert in its appropriate alphabetical order:

call-in regime means the regime in Part 3 of the Act in relation to call-in transactions to which subpart 1 of that Part applies

5 Regulation 3B amended (Sensitive information)

After regulation 3B(5), insert:

Other exclusions

(6)

Publicly available information is not sensitive information.

(7)

Information is not sensitive information within paragraph (a) of the definition of that term in section 6(1) of the Act if—

(a)

it is in a form that could not reasonably be expected to identify the individual concerned; or

(b)

it is information held by a person about that person’s own employees.

6 Regulation 3E replaced (Overseas investments covered by emergency notification regime)

Replace regulation 3E with:

3E Overseas investments covered by call-in regime

(1)

This regulation is made under section 127(1)(d)(ii) of the Act for the purposes of section 82(1) of the Act.

(2)

An overseas investment is not a call-in transaction if it is the acquisition by an overseas person, or an associate of an overseas person, of rights or interests in securities of an entity (A) as a result of the initial issue of those securities on the creation of A.

7 Regulation 64B amended (Exemption from requirements under emergency notification regime)

(1)

In the heading to regulation 64B, replace emergency notification regime with call-in regime.

(2)

In regulation 64B, replace “emergency notification regime” with “call-in regime”.

8 Regulation 64C amended (Interim direction orders)

In regulation 64C, insert as subclauses (2) to (5):

(2)

Subclauses (3) to (5) apply to an interim direction order that is given to a relevant acquirer in relation to a transaction—

(a)

that has not been notified under section 85 or 86 of the Act; and

(b)

that the Minister has decided to review under section 84(3) of the Act.

(3)

The date specified for the purpose of section 91(4)(a) of the Act is the close of the 55th working day after the interim direction order is given to the relevant acquirer.

(4)

The Minister may extend that date once, for a further period of up to 30 working days.

(5)

The Minister must give notice of the extension to the relevant acquirer before the initial time limit expires.

9 New regulation 69AAA inserted (Time within which notification may be notified)

In Part 3, after the subpart 3 heading, insert:

69AAA Time within which notification may be notified

(1)

This regulation applies for the purpose of section 86(2) of the Act, which provides that any overseas person or associate making the overseas investment in SIB assets may notify the regulator of a call-in transaction at any time before the date set out in regulations.

(2)

That date is 6 months after the transaction is given effect to.

10 Regulation 69A amended (Time frame for taking risk management action)

Replace regulation 69A(2) with:

(2)

The Minister must take a risk management action in relation to a transaction notified to the regulator under section 85 or 86 no later than 55 working days after the regulator receives the notification.

11 Schedule 1AA amended

In Schedule 1AA,—

(a)

insert the Part set out in the Schedule of these regulations as the last Part; and

(b)

make all necessary consequential amendments.

Schedule New Part 6 of Schedule 1AA inserted

r 11

Part 6 Provisions relating to Overseas Investment (Commencement of Permanent Call-in Regime) Amendment Regulations 2021

10 Commencement of permanent call-in regime: transactions entered into before 7 June 2021

(1)

This clause applies, for the purposes of Part 3 of the Act, to transactions entered into before the commencement of section 53 of the Overseas Investment (Urgent Measures) Amendment Act 2020.

(2)

The following provisions continue to apply:

(a)

the provisions of the Act that are amended by that section 53, as they exist immediately before that amendment; and

(b)

Parts 1AA and 2A, and subpart 3 of Part 3, of these regulations, as they exist immediately before the commencement of the Overseas Investment (Commencement of Permanent Call-in Regime) Amendment Regulations 2021.

(3)

See clause 24 of Schedule 1AA of the Act, which provides that the call-in regime enacted by section 53 does not apply.

11 Time frame for notifying unpublished critical direct supplier call-in transactions during transitional period

(1)

This clause applies if an overseas person or associate invests in an unpublished CDS on or after 7 June 2021 and before the changes to section 85 of the Act that are made by the Overseas Investment Amendment Act 2021 come into force.

(2)

For the purpose of section 85(4)(a) of the Act, the later date by which a notice under section 85(2) must be given is the date that is as soon as is reasonably practicable after the investor receives a notice under section 20E(2) of the Act.

Michael Webster,
Clerk of the Executive Council.

Explanatory note

This note is not part of the regulations, but is intended to indicate their general effect.

These regulations, which come into force on 7 June 2021, amend the Overseas Investment Regulations 2005 as a result of the replacement of the emergency notification regime with the permanent call-in regime on that date. These regulations make the following changes to the principal regulations:

Regulation 3 is amended to insert a definition of call-in regime.

Regulation 3B, which prescribes the classes of information that are not sensitive information, is extended to include certain publicly available information, anonymised data, and information about a person’s own employees.

Regulations 3E and 64B are amended so that they apply also to the permanent call-in regime.

Regulation 64C is amended so that it provides that an interim direction order given in respect of a non-notified transaction expires after 55 working days (unless the time period is extended).

New regulation 69AAA is inserted, allowing voluntary notifications to be given up to 6 months after a transaction is entered into.

Regulation 69A, which sets the time frame for taking a risk management action, is amended to extend the time frame from 40 working days to 55 working days.

These regulations also insert new transitional provisions in Schedule 1AA as follows:

  • the emergency notification regime continues to apply to transactions entered into before 7 June 2021 (see new clause 10):

  • the time frame for notifying investments in unpublished critical direct supplier call-in transactions during a transitional period beginning on 7 June 2021 and ending when the Overseas Investment Amendment Act 2021 comes into force will be the same as if that Act had already come into force (see new clause 11).

Issued under the authority of the Legislation Act 2012.

Date of notification in Gazette: 27 May 2021.

These regulations are administered by the Treasury.