The Proposed Trans-Tasman Mutual Recognition Regime
The proposed trans-Tasman mutual recognition regime for offers of securities and interests in managed investment schemes will allow an issuer to extend an offer that is being lawfully made in one country (the home jurisdiction) to investors in the other country (the host jurisdiction) without being required to comply with most of the substantive requirements of the host jurisdiction's fundraising laws that apply to domestic offers.
The objective of the proposed regime is to remove unnecessary regulatory barriers to trans-Tasman securities offerings, and to thereby facilitate investment between the two countries, enhance competition in capital markets, reduce costs for business, and increase choice for investors. The proposed regime will reduce costs for issuers wishing to offer their securities or managed investment scheme interests in both jurisdictions, since issuers (that have access to the regime) will only have to comply with a single set of substantive requirements. The proposed regime is also expected to reduce the cost of capital for issuers, as they will have access to a larger investor base. The proposed regime will also benefit investors, by increasing the range of investment choices and providing greater scope for risk diversification.
The proposed regime applies to issuers but not to other parties who, for example, provide financial advice in relation to, or deal in, the securities or interests in managed investment schemes.
The proposed regime is being developed as part of a general initiative for greater coordination of business law between Australia and New Zealand. The framework for the coordination of business law between Australia and New Zealand is set out in the Memorandum of Understanding between the Government of Australia and the Government of New Zealand on the Coordination of Business Law (the MOU), the most recent version of which was signed in August 2000.1
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