Business Compliance Cost Statement
The proposed regime will reduce compliance costs to issuers that want to offer securities across the Tasman (to New Zealand from Australia or to Australia from New Zealand) by removing the need to comply with different disclosure requirements for offerings of the same securities in each jurisdiction.
However, some compliance costs will arise from the need to comply with the entry and on-going requirements of the regime. Australian firms wishing to offer securities in New Zealand or New Zealand firms wishing to offer securities in Australia are likely to obtain legal advice on the new regime before offering any securities.
It is difficult at this juncture to provide any quantification of the costs incurred. There have been some estimates by the Australian Securities Exchange ("ASX") that the cost to Australian issuers under the current regime ranges from A$10,000 to A$50,000. There were no indications of the legal costs that New Zealand issuers were likely to incur when offering securities in Australia under the current regime. The legal costs to New Zealand issuers under the current regime, however, are likely to mirror the costs estimated by the ASX. The costs arising from the proposed mutual recognition regime are likely to be substantially reduced in comparison to the current regime for issuers from both Australia and New Zealand. Further, it should be noted that many of the firms that will be offering securities under the proposed regime will be larger firms who are better placed to bear these costs.
Both governments are also intending to publicise details of the regime, to reduce the need for issuers to incur legal costs in seeking advice.
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