Consultation on Draft Regulations

Issues for Comment

The regulations will be made under the Securities Act 1978, as Part 5 of that Act already sets out the general framework for mutual recognition regimes for securities offerings. Sections 75 and 79 of the Act set out the matters that must be covered in the regulations. We are seeking comment on the matters in the regulations only - that is, the entry requirements and ongoing requirements that issuers will have to meet to offer securities in New Zealand under the regime, and the requirements that New Zealand issuers will have to meet when utilising the Australian regime, including notice requirements and procedures.

The regulations as drafted require an offeror to file information and documents with both the Registrar of Companies and the Australian Securities and Investments Commission (ASIC). This is consistent with the Agreement signed by New Zealand and Australia. However, we hope to explore whether these filing requirements can be streamlined and would be grateful for any comments on the costs involved.

Interested parties may also wish to look at the draft Australian legislation [link to Australian Treasury website]. We would appreciate comments on any issues regarding the consistency and workability of the two legislative regimes.

Explanatory Notes

• The draft regulations reflect the agreement between Australia and New Zealand signed on 22 February 2006. This is the first agreement made under Part 5 of the Securities Act 1978, which established the framework for a range of mutual and unilateral recognition regimes for securities offerings.
• These regulations use some of the language of the agreement to ensure greater consistency between the implementing legislation in both countries. For this reason, there are differences between some terms used in the regulations and those in the Securities Act, such as "offeror" rather than "issuer".
• In addition, the regulations are designed to work with the legislation governing Australian securities offerings, for example:
  • Regulation 7 prescribes that the offer must be a regulated offer. That is, the offer must be an offer of securities by an Australian offeror in respect of which a disclosure document or a product disclosure statement or a similar offer document is required under Australian securities legislation: see the definition of "regulated offer" in Regulation 3. This provision is intended to catch those offers of securities to the public that use offer documents, and not other offers of securities, for example, small scale offers of securities, offers of securities to sophisticated or professional investors, or offers of securities made to associated persons.
  • Regulation 8 prescribes that the offeror must be entitled under Australian securities legislation to offer the securities to the public. Australian issuers are required to lodge offer documents with ASIC either 7 or 14 days prior to issuing or transferring securities to investors. Regulation 8 is intended to ensure that the required offer document has been filed with ASIC and that the relevant waiting period has expired.

Comments

MED welcomes contributions on the draft regulations from all parties interested in the mutual recognition regime.

If you would like to send in comments, please contact MED by email at financialsectorsubmissions@med.govt.nz or by post at:

Financial Sector Team
Ministry of Economic Development
33 Bowen Street
PO Box 1473
Wellington

by 24 October 2006.

This site uses cookies to track and analyse usage.