Summary
Part I: Policy Justification for Disclosure of Substantial Security Holders
14. Part I discusses the policy justification for having a substantial security holder disclosure regime. It outlines the objectives of substantial security holder disclosure regimes, such as promoting open dealings and ensuring that public issuers and the market are kept informed of the ownership of significant holdings of shares.
Part II: Securities Amendment Act 1988
15. Part II outlines the current disclosure regime set out in part II of the Securities Amendment Act 1988. It outlines the obligations of substantial security holders, the definition of "relevant interest", the information that must be disclosed, the obligations of public issuers, and the remedial orders for breaches of the regime.
Part III: Issues
16. Part III discusses a number of issues that the Ministry of Economic Development is seeking comment on. These include:
- Whether the current definition of "relevant interest" is still appropriate or whether an approach focused on the control of voting rights is more appropriate;
- Whether the circumstances in which a relevant interest can be disregarded should be improved or changed;
- Whether the reference to convertible securities in the definition of "voting securities" should be removed or amended;
- Whether the 5% threshold for the substantial security holder regime is still appropriate and whether the threshold should be different for collective investment schemes;
- Whether the definition of "substantial security holder" should be amended so as to provide for situations involving differential voting rights, and, if so, what the replacement definition should be;
- Whether the substantial security holder disclosure regime should apply to collective investment schemes;
- What the time period for disclosure should be and whether the requirement for a substantial security holder to give notice should arise only when they have actual knowledge that they should disclose or when they ought to have known that they should disclose;
- What penalties and remedies should be available for a breach of the substantial security holder provisions and what role the Securities Commission should play in the regime; and
- Whether any other improvements could be made to the regime to make disclosure easier and to reduce compliance costs.
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