This notice, which comes into force on the day after the date of its notification in the Gazette, extends the terms of various class exemption notices for a term of 5 years. The notice makes some minor amendments to a number of those exemption notices, including—

• revoking references to section 37A(2) of the Securities Act 1978 (which has been repealed):

• revoking a transitional provision in the Securities Act (Amalgamations) Exemption Notice 2002. This transitional provision allowed offers to be made in accordance with a preceding notice if the securities offered were allotted before 31 December 2002. Persons now seeking to rely on this notice will no longer be able to allot securities before 31 December 2002 and, accordingly, the transitional provision is now spent:

• revoking clause 10 of the Securities Act (Overseas Employee Share Purchase Schemes) Exemption Notice 2002. This clause provides for a condition to the exemptions in that notice requiring, in respect of securities offered after 31 March in a calendar year, the issuer to report to the Securities Commission on the securities offered in New Zealand and overseas in the preceding calendar year.

The notice also—

• inserts a clause into the Securities Act (Sharebrokers) Exemption Notice 1984 and the Securities Act (Contributory Mortgage) Regulations (Solicitors) Exemption Notice 1996 that provides for those notices to expire on 30 September 2012; and

• revokes various exemption notices; and

• extends the terms of 3 individual exemption notices for a term of 5 years (namely, the Securities Act (Fonterra Co-operative Group Limited) Exemption Notice 2003, the Securities Act (Foodstuffs (South Island) Limited) Exemption Notice 2002, and the Securities Act (Union Medical Benefits Society Limited) Exemption Notice 2002).

The Securities Commission (the Commission) considers that the extension of expiry dates and the amendments are appropriate because—

• the class notices being amended were introduced to reduce compliance costs for issuers of securities, and to address rigidities in the application of the law to certain investment products. The exemptions have been in place for a number of years, and consultation by the Commission demonstrates support from market participants for the retention of these exemptions:

• in the case of the revocation of clause 10 of the Securities Act (Overseas Employee Share Purchase Schemes) Exemption Notice 2002, the reporting requirement in that clause was introduced so as to allow the Commission to gather information to ensure that the notice is being used as intended. As reports received since 2002 indicate that the notice is being used as intended, the Commission considers that this requirement is no longer necessary. Removing the requirement will reduce the costs for issuers who rely on the notice:

• in the case of the Securities Act (Fonterra Co-operative Group Limited) Exemption Notice 2003, the notice continues to be appropriate, having regard to the nature of the securities offered by Fonterra Co-operative Group Limited (Fonterra) to supplying shareholders and the manner in which the price of the securities is set in accordance with the Dairy Industry Restructuring Act 2001 and Fonterra’s constitution:

• in the case of the Securities Act (Foodstuffs (South Island) Limited) Exemption Notice 2002, the notice continues to be appropriate because it is consistent with the policy of the Securities Act (Co-operative Companies) Exemption Notice 2002 and only differs from that class notice where this is justified given the nature of Foodstuffs (South Island) Limited’s business and share structure:

• in the case of the Securities Act (Union Medical Benefits Society Limited) Exemption Notice 2002, the notice continues to be appropriate because—

  • the ownership of shares in Union Medical Benefits Society Limited (Union) by members of that company is a legal requirement of the Industrial and Provident Societies Act 1908 and incidental to the provision of health insurance services by Union; and

  • the shares are not investment products in the traditional sense; and

  • the potential compliance costs for Union if the exemption were not continued would be disproportionate to any benefit received by a person seeking health insurance from Union; and

  • there have been no material changes to the nature of the offers made by Union since the notice was granted that would justify changing the Commission’s policy:

• the amendments update the notices (for example, to reflect changes to the entities named in the schedules to those notices since the notices were granted).

The Commission considers that inserting an expiry clause into the Securities Act (Sharebrokers) Exemption Notice 1984 and the Securities Act (Contributory Mortgage) Regulations (Solicitors) Exemption Notice 1996 is appropriate because the amendment—

• will align the notices with other class notices; and

• is consistent with the Commission’s policy to review class notices every 5 years.

The Commission considers that the revocations are appropriate because—

• the companies concerned either no longer exist or have advised the Commission that the exemptions are no longer required; or

• a number of the notices include exemptions from the provisions of subpart 3 of Part 2 of the Securities Markets Act 1988, which will be repealed and replaced by the Securities Markets Amendment Act 2006 on a date to be appointed by Order in Council; or

• in the case of the Securities Act (Morgan Stanley Companies) Exemption Notice 1992, the exemption concerns compliance with the Securities (Substantial Security Holders) Regulations 1989, which have been revoked.