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New Zealand Securities Commission |
Last Updated: 16 November 2014
Class exemption review
The Commission is reviewing class exemptions in light of the introduction of the Securities Regulations 2009 (2009 Regulations).
Comments on the drafts of new notices are sought by 14 January 2011
Exemptions already granted by general transitional notice
To provide equivalent exemptions from provisions of the 2009 Regulations as were available from provisions of the Securities Regulations 1983 (1983 Regulations) in many existing class notices the Commission has previously granted exemptions by means of the Securities Act (Transition to Securities Regulations 2009) Exemption Notice 2009 (2009 notice).
The 2009 notice provided exemptions in respect of situations where the 2009 Regulations did not introduce significantly different or additional requirements. The notice also granted equivalent exemptions in the case of exemptions from all of the requirements of the 1983 Regulations or of a particular schedule of the 1983 Regulations.
Class exemptions requiring individual consideration
Some provisions of the 2009 Regulations are loosely equivalent to provisions of the 1983 Regulations but prescribe significantly different or additional requirements to those in the 1983 Regulations. The 2009 notice does not provide exemptions from those provisions of the 2009 Regulations.
The following class notices include exemptions from these provisions of the 1983 Regulations which have substantively changed:
Any exemptions granted from these provisions of the 1983 Regulations needed to be considered in the context of their circumstances to determine whether exemptions from any equivalent provisions in the 2009 Regulations are appropriate. More time was therefore required to consider and consult on whether to grant similar exemptions from the 2009 Regulations to those that are currently available from the 1983 Regulations under these class notices.
The temporary transitional notice for these class notices
The Securities Act (Transition to Securities Regulations 2009) Exemption Notice 2010 was granted to address difficulties issuers face in complying with the 2009 Regulations without being able to rely on similar exemptions as those granted from provisions of the 1983 Regulations by these class notices. We intend to extend the expiry of this notice to 31 March 2011 to allow further time for finalisation of drafting of the new class notices. You can check the Gazette to confirm the extension has been put into effect (we intend to notify this extension notice in the 16 December 2010 Gazette).
The proposed new class notices
Commission staff have now determined proposals for new class exemptions to replace these 8 existing class exemptions. We attach drafts of 7 of the proposed new notices. We do not attach the notice replacing the Securities Act (Stock and Station Agents) Exemption Notice 2002. This notice has been finalised following consultation with the stock and station agents concerned. We intend to seek its notification in the Gazette on 16 December 2010.
In the case of most of the class notices, the new proposed class notices continue exemptions from provisions of the Act, and provide for existing exemptions from the provisions of the 1983 Regulations to be extended to equivalent provisions of the 2009 Regulations. The reason for this is because while the changes introduced by the 2009 Regulations will reduce costs for issuers and improved information for investors, they do not attempt to tailor disclosure law requirements for the vast range of circumstances to which securities law requirements apply. Accordingly the amendments to the regulations have not addressed all of the difficulties faced by issuers in complying with all aspects of the regulations.
After individual review of each of the class notices we have concluded exemptions from equivalent provisions continue to be required and appropriate in light of the policy of these class notices. Whilst providing equivalent exemptions we have sought to:
An exception is the Securities Act (Employee Share Purchase Schemes - Listed Companies) Exemption Notice 2006. In light of the recent introduction of the simplified disclosure prospectus (SDP) regime for listed securities we considered whether listed issuers would wish to continue to rely on exemptions of the nature of those provided by the notice, or move towards using an SDP. We also sought comments on whether there was a justified basis for an evergreen SDP. After considering submissions received we have determined to retain equivalent exemptions but aligned with requirements of the 2009 Regulations. We also propose a condition, reflecting a requirement of the SDP, namely that issuers make a statement in the offer documents to the effect that the securities are quoted, the company is subject to a disclosure obligation, and how the disclosed information may be obtained.
Transitional provisions for notices with section 37A(1)(c) exemptions
We are still to finalise the form of the transitional provisions for the notices providing for evergreen prospectuses, namely:
It is the Commission's view that new prospectuses should be registered under the 2009 Regulations in order to ensure that appropriate due diligence is undertaken and that investors receive an offer document that is designed under the 2009 Regulations. We appreciate that issuers will want a transitional period to prepare a new prospectus. Our initial thought is that the end of October 2011 would be ample time. We are happy to receive comments on transitional issues and the form of the transitional provisions.
Comments sought
We seek comments on the attached drafts. Please provide comments by 14 January 2011 to natalie.muir@seccom.govt.nz. Please note that the indication of the form of the proposed new notices cannot be relied upon until the Commission has granted the exemptions, and the new notices putting those exemptions into effect have been notified in the Gazette.
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URL: http://www.nzlii.org/nz/other/NZSecCom/2010/23.html