Securities Legislation Bill Government Bill As reported from the Commerce Committee Commentary Recommendation The Commerce Committee has examined the Securities Legislation Bill and recommends that it be passed with the amendments shown. Introduction This commentary focuses on the major issues we examined and the amendments recommended. The bill also contains a number of amendments aimed at clarifying the intent of this bill and other technical and minor changes, which are not discussed. This bill is designed to ensure con.dence in New Zealand’s capital markets by increasing the effectiveness of securities, securities trad­ing, and takeover laws. The bill simpli.es the current substantial security holders’ disclosure regime; introduces comprehensive prohibitions against practices involving the creation of a false impression of securities trading activity, price movement, or market information; strengthens the law relating to insider trading; improves the quality of advisor and broker disclosure and business practices across the advisory industry; and overhauls the penalties and remedies available under securities and takeovers law to deter illegal behaviour and encourage compliance. This bill is an omnibus bill and amends the Securities Act 1978, the Securities Markets Act 1988, the Takeovers Act 1993, and the Fair Trading Act 1986. 234—2 We recommend the insertion of new clauses 3A, 34A, and 62 to allow the Securities Commission and the Takeovers Panel to share information with the Commerce Commission. 1 The Securities Commission and the Takeovers Panel are authorised under their respective Acts to communicate to each other any infor­mation that either considers would help the other body to perform its statutory functions. This information-sharing power recognises the public interest in ensuring that regulators working in similar areas cooperate in the performance of their duties, and thus enhance the ef.ciency of their investigation and enforcement functions. Prohibitions against misleading and deceptive conduct have been introduced into securities and takeovers law, and the same consider­ations suggest that this information-sharing power should be extended to encompass the Commerce Commission’s role under the Fair Trading Act. Accordingly, the Securities Commission, the Takeovers Panel, and the Commerce Commission should be authorised to communicate to each other any information that they consider would help another of them to perform its statutory functions in relation to misleading and deceptive conduct. Pecuniary penalty for civil liability events in the Securities Act We recommend that clause 4, inserting new section 55F into the Securities Act, be amended to distinguish between the maximum pecuniary penalty for individuals—up to $500,000—and that for bodies corporate—up to $5 million. This will make the penalty under the Securities Act consistent with that in the Takeovers Act. It will also bring the pecuniary penalty for the individual closer to the criminal penalty for offering, distribut­ing, or allotting securities in contravention of the Securities Act. This is desirable as there is a risk that, if the pecuniary penalty were substantially higher than the criminal penalty, a perverse incentive might be created to take civil pecuniary proceedings rather than a criminal prosecution. 1 Clause 3A inserts new section 17B into the Securities Act. Clause 34A inserts new section 15B into the Takeovers Act. Clause 62 inserts new section 48A into the Fair Trading Act. We recommend that clause 11, inserting new sections 60A and 60E into the Securities Act, be amended so that management banning orders are available only for serious breaches of the Securities Act. Management banning orders protect investors by excluding certain persons from positions of control in businesses where they have shown by their conduct that they are un.t to hold those positions. The bill as it stands gives the Court discretion to impose a manage­ment banning order on a person if they have been convicted of an offence against the Securities Act or a pecuniary penalty order has been made against them. We feel that this serious penalty is inappro­priate for many of the minor infringements a person may be con­victed of under the Act. We propose, therefore, that the Court may have discretion to impose a management banning order only on those convicted of serious offences speci.ed under sections 58, 59, and 59A of the Act, or if a pecuniary penalty order has been made against them. Further, the bill as it stands imposes an automatic management banning order on a person if they have been convicted of an offence against the Securities Act or a pecuniary penalty order has been made against them. Similarly, it is proposed that an automatic man­agement banning order should affect only those convicted of serious offences under sections 58 and 59A of the Act or those against whom a pecuniary penalty order has been made. 2 Management banning orders for serious breaches of the Takeovers Act and the Takeovers Code We recommend that clause 51 be amended, inserting new subpart 3A into the Takeovers Act, to allow management banning orders to be made for serious breaches of the Takeovers Act and the Take­overs Code. To be consistent and comprehensive, we believe the bill should provide for management banning orders against those convicted of serious breaches or persistent contraventions of the Takeovers Act or the Takeovers Code, as is proposed for those convicted of serious breaches of the Securities Act and the Securities Markets Act. 2 Note that an automatic management banning order does not apply for offences stated under section 59. The Court, however, retains the discretion to impose an order for offences under this section. Serious breaches of the Takeovers Act would include conviction for an offence under proposed new sections 44 or 44C inserted by clause 50 of the bill or when a pecuniary penalty order has been made. The Takeovers Panel or people affected by the behaviour in question should be allowed to apply to the Court for a banning order. Declaration of contravention and declaration of civil liability procedure We recommend that new clauses 11, 27, and 51 be amended to provide an injunctive power aimed at preserving assets to satisfy claims. 3 These clauses will help make effective the declaration of contravention and declaration of civil liability mechanisms. The purpose of the mechanism, which arises consequent to the taking of a pecuniary penalty proceeding, is to allow subsequent claimants for compensation to rely on the declaration in establishing that there has been a contravention of the law. Accordingly, claim­ants would need only to show their loss in order to succeed. Thus the mechanism would facilitate claims for compensation that might otherwise be too costly to bring to court. We do not wish to see this useful procedure undermined by the probable order of proceedings. Prior award of a pecuniary penalty may diminish the pool of resources available for satisfying subse­quent claims for compensation. The injunctive power we recom­mend, which is similar to the Mareva injunction in the High Court Rules, will provide a tool for ensuring there are suf.cient assets to satisfy claims. Liability under Fair Trading Act We recommend that clauses 21, 27, and 51 be amended, and that clause 61 be inserted to clarify the relationship between the Fair Trading Act and the various prohibitions on misleading and decep­tive conduct now inserted into securities and takeovers law. 4 As a general principle, we believe that the Fair Trading Act should remain as consumer protection legislation of general application, 3 Clause 11 inserts new sections 60F to 60G into the Securities Act. Clause 27 inserts new sections 43P to 43QC into the Securities Markets Act. Clause 51 inserts new sections 44DG to 44DK into the Takeovers Act. 4 Clause 21 inserts new section 19 into the Securities Markets Act. Clause 27 inserts new section 41X into the Securities Markets Act. Clause 51 inserts new section 44DAA into the Takeovers Act. Clause 61 inserts new sections 5A and 5B into the Fair Trading Act. Nor should the Fair Trading Act apply in respect of misleading or deceptive conduct now regulated under takeovers laws. Clearly delineating the coverage of these two laws will ensure that the Takeovers Panel can continue to oversee the ef.cient operation of the takeovers market, and avoid the prospect that private parties might seek to press their claims of misleading or deceptive conduct through lengthy litigation. Bank term deposits excluded from the de.nition of security We recommend that the de.nition of ‘‘security’’ in clause 20 be amended to exclude bank term deposits from that de.nition as it applies to new Part 4 of the Securities Markets Act concerning disclosure by investment advisers and brokers. Bank term deposits are relatively straightforward, have a low market and default risk, and are generally well understood by the public. Disclosure of the matters in clause 27 (speci.cally new sections 41C to 41G) of the bill will be unlikely to help the depositor make a better decision about investing in a term deposit, and is likely to create signi.cant compliance costs for banks and frustrate investors. Further, with the disclosure requirements of the Securities Act appli­cable to term deposits, and the prudential regulatory requirements of the Reserve Bank of New Zealand Act 1989 applicable to registered banks, term deposits are already subject to suf.cient investor protec­tion mechanisms. It was initially proposed that limited disclosures in respect of bank term deposits be devised through regulation. We felt, however, that bank term deposits represent such a signi.cant and straightforward part of the market that an exception was more appropriately made in primary legislation. Material information We recommend that clause 20, inserting a new section 3 into the Securities Markets Act, be amended to clarify the material informa­tion test for the purposes of insider trading and continuous disclosure. We recommend two changes. First, the de.nition of material infor­mation suggested, in subsections (2) and (3), that one way of deter­mining whether a reasonable person should expect that the informa­tion in question would have a material effect on price was to demonstrate whether the information would, or would be likely to, in.uence people who commonly invest in securities in deciding whether to buy or sell those listed securities. However, the intention that subsection (2) be illustrative of the reasonable person test con­fused many submitters into thinking it was an alternative test for what constitutes material information. We recommend simplifying the provision by deleting subsections (2) and (3), accordingly. Second, the words ‘‘or value’’ in the de.nition of material informa­tion also created confusion for submitters, who noted that, as the insider trading regime is to apply to listed securities, the only rele­vant benchmark of what is material information ought to be move­ments (or the potential for movements) in the price of the stock quoted on a registered exchange. The words ‘‘or value’’ were included originally to cover particular situations such as illiquid stocks; information about a company whose securities were traded infrequently may not result in price movement, but that information may yet be material information if it nevertheless affects the value of the company. However, we consider that the potential for confusion over the words ‘‘or value’’ is greater than the service they would perform. We recommend, therefore, that they be deleted. Information generally available to the market We recommend that clause 20, inserting a new section 4 into the Securities Markets Act, be amended to clarify that information noti­.ed in accordance with a continuous disclosure obligation is con­sidered to have been made generally available to the market immedi­ately upon its being made available to participants on a registered exchange’s market. It is important to the scheme of the Securities Markets Act that the insider trading and continuous disclosure provisions work together. In essence, any price sensitive—material—information disclosed to the market via the continuous disclosure obligations cannot be inside information, as it has been made generally available to the market. The change recommended will help clarify the intended operation of the section. Paragraph (a) of section 4 relates to information dis­closed to the market by a company or people inside the company. Subparagraph (i) addresses the need for information to be announced to the market in a way that would probably bring it to the attention of people who commonly invest in such securities. In addition, the ‘‘reasonable period’’ for dissemination in subparagraph (ii) suggests how quickly the information should be made available.The requirement for a reasonable period for dissemination is not a general embargo on trading, as the continuous disclosure example now makes clear. Rather, the reasonable period for dissemination is intended to prevent a person who is aware of the information prior to its release (usually by virtue of their relationship with the issuer) from manipulating the disclosure of information in order to gain an unfair advantage over other market participants. Accordingly, before trading the ‘‘informed person’’ must wait until a reasonable period for dissemination has elapsed. For information made known to the market otherwise than in accor­dance with continuous disclosure, when a reasonable period for dissemination has elapsed will be fact-speci.c to each case. Con­versely, by clarifying that information disseminated to the market via continuous disclosure meets the ‘‘generally available’’ test, there is greater certainty for market participants, particularly as the vast majority of information will be disseminated to the market by that means. Paragraph (b) of section 4(1) covers information that is readily obtainable by persons who commonly invest. In particular, para­graph (b) covers information that is generally observable, or is otherwise in the public domain. In contrast to information disclosed by a public issuer under section 4(1)(a), no period of dissemination is required under section 4(1)(b) because the information is already available to any market participant who chooses to look. Any advan­tage gained by the .rst person to do so is not unfair. Relevant interests in securities We recommend that clause 20, inserting a new section 5A into the Securities Markets Act, be amended to omit reference to a power or control exercised by means of a practice, including market practice and persons’ practices in dealing with each other. Extension of the relevant interest de.nition to include a power or control exercised through a practice was intended to cover a poten­tial gap in the law exposed by recent litigation. However, we con­sider that the de.ciency is fact-speci.c to that case, and that the proposed solution would create undue uncertainty as to when the substantial security holder disclosure obligation arises. References in section 5A to ‘‘practice’’ should therefore be deleted. Takeovers exception to insider trading prohibitions We recommend that clause 21, inserting a new section 9E into the Securities Markets Act, be amended to specify better the extent to which conduct sanctioned by the Takeovers Code is excepted from the insider trading prohibitions in the Act. The rules in the Takeovers Code ensure that all shareholders are treated equally and that, on the basis of proper disclosure, they can make an informed decision whether to accept or reject an offer for control of a code company. Our recommendation will con.rm that speci.c behaviours mandated by the code are not captured as insider trading under the Securities Markets Act. Research and analysis defence to insider trading We recommend that clause 21, inserting a new section 10A into the Securities Markets Act, be amended to allow a person who has obtained inside information by research and analysis to advise or encourage others to act on that information. This change ensures that legitimate research and analysis may be raised as a defence to any of the three insider trading prohibitions. While the defence remains narrow in scope, it must be read in conjunction with the de.nition of information that is ‘‘generally available to the market’’ in new section 4 of the Securities Markets Act. Paragraph (c) of section 4(1)—information that consists of deductions, conclusions, or inferences made or drawn from any of the kinds of information referred to in the preceding paragraphs of that section—makes it clear that the skill, expertise, or experience of an investor in analysing information available to the market is not penalised. Any information gleaned from such analysis is informa­tion generally available to the market, and thus cannot be the subject of an insider trading prosecution. Read together with the research and analysis defence in new section 10A, we consider that the bill New de.nition of speci.ed company We recommend that the de.nition of ‘‘speci.ed company’’ in clause 33 be amended so that companies currently subject to the Takeovers Code simply by virtue of having listed non-voting securities are no longer captured. The code governs bids to achieve controlling stakes in companies. It is thus concerned principally with control of voting rights. The code should not apply to companies that are party to a listing agreement only in respect of listed debt securities, equity warrants, or other non-voting interests. The change responds to submitters’ concerns on this point. The Securities Legislation Bill was referred to the committee on 14 December 2004. The closing date for submissions was 18 Febru­ary 2005. We received and considered 29 submissions from interested groups and individuals. We received advice from the Ministry of Economic Development. Committee membership Mark Peck (Chairperson) Hon Roger Sowry (Deputy Chairperson) Brent Catchpole Brian Connell Russell Fairbrother Hon Damien O’Connor H V Ross Robertson Kenneth Wang Struck out (unanimous) Subject to this Act, Text struck out unanimously New (unanimous) Subject to this Act, Text inserted unanimously (Subject to this Act,) Words struck out unanimously Subject to this Act, Words inserted unanimously Securities Legislation Bill Government Bill Contents 1 Title General provisions on civil 2 Commencement liability remedies 57B Pecuniary penalty order and Part 1 compensation order may be made for same conduct Amendments to Securities Acts Subpart 1—Amendments to Securities 3 Act 1978 Securities Act 1978 called principal 57C Only one pecuniary penalty order may be made for same conduct Act in this subpart 57D Standard of proof for civil Sharing of information provisions remedies 3A New section 17B inserted 57E Time limit for applying for 17B Sharing of information with civil remedies Commerce Commission 9 New heading inserted Amendments to delegation of powers Criminal liability by Commission 10 Criminal liability for obstructing 3B Delegation of powers by exercise of powers Commission 11 New sections 60A to 60G and Amendments to remedies headings inserted 4 New heading and sections 55A to Management bans 55G inserted 60A When Court may make man­ 5 6 7 Civil liability 55A Overview of civil liability 55B What are civil liability events 55C When Court may make pecu­niary penalty orders and dec­larations of civil liability 55D Purpose and effect of declara­tions of civil liability 55E What declarations of civil lia­bility must state 55F Amount of pecuniary penalty 55G Compensation orders Civil liability for misstatements in advertisement or registered prospectus Civil liability for misstatements by expert Civil liability for breach of contrib­ agement banning orders 60B Terms of management ban­ning orders 60C Offence of contravening man­agement banning order 60D Only one management ban­ning order may be made for same conduct 60E Persons automatically banned from management 60EA Commission must be noti.ed of application for leave to depart from management ban Orders to preserve assets to satisfy claims 60F When Court may prohibit payment or transfer of money, securities, or other 8 utory mortgage regulations New heading and sections 57B to 57E inserted property 60FA What orders may be made 60FB Interim orders 234—2 60FC Relationship with other law 16A Registration of judgment 60G Offence 12 New heading above section 65A Amendment Act 2004 substituted 17 Transitional validation for small 12A New sections 65B to 65E inserted 65B Court may order payment of Commission’s costs employer superannuation schemes Transitional provision 65C Orders to secure compliance 18 Transitional provision for existing 65D Giving notice of application offences and contraventions for Court orders 18A Related amendments 65E General provisions as to Subpart 2—Amendments to Securities Court’s orders Markets Act 1988 65F No pecuniary penalty and .ne 19 Securities Markets Act 1988 called for same conduct principal Act in this subpart Amendments to investigation and Amendments to interpretation enforcement powers 20 New sections 2 to 6 substituted 13 New sections 69B, 69BA, and 69C 2 Interpretation substituted 3 What is material information 69B Who may receive evidence in relation to public issuer 69BA Admissibility of evidence 3A What is material information 69C How evidence may be given in relation to futures contract 14 Power to summon witnesses 4 What information is generally 14A Right to be heard and represented at available to the market proceedings before Commission 5 Relevant interests in securities 15 New section 69U substituted (basic rule) 69U Restrictions on use of self ­ 5A Extension of basic rule to incriminating statements powers or controls exercisa­obtained by summons ble through trust, agreement, etc Amendments to regulation 5B Extension of basic rule to empowering provisions interests held by other per­16 New sections 70AA to 70AAF sons under control or acting inserted jointly 70AA Regulations may require 6 Situations not giving rise to compliance with generally relevant interests accepted accounting practice Insertion of new dealing misconduct and incorporate .nancial provisions reporting standards by reference 21 New Part 1 substituted 70AAB Effect of amendments to, Part 1 or replacement of, material Dealing misconduct incorporated by reference in Subpart 1—Insider conduct and regulations market manipulation prohibitions 70AAC Access to material incor ­porated by reference Insider conduct prohibited 70AAD Acts and Regulations Pub­ 8 Prohibition of insider conduct lication Act 1989 not applica­ 8A Who is information insider ble to material incorporated 8B Meaning of inside by reference information 70AAE Application of Regulations 8C Information insider must not (Disallowance) Act 1989 to trade material incorporated by 8D Information insider must not reference disclose inside information 70AAF Application of Standards 8E Information insider must not Act 1988 not affected advise or encourage trading 2 8F Criminal liability for insider 15 Exception for repurchase of conduct shares by company 16 Exception for offers of secur- When prohibition on insider ities to public conduct does not apply 17 Exception for disclosure by 9 Exception for trading required investment advisers or by enactment brokers 9A Exception for disclosure required by enactment Territorial scope 9B Exceptions in respect of 18 Territorial scope of general underwriting agreements dealing misconduct 9C Exception in case of know- prohibition ledge of person’s own inten- Liability under Fair Trading Act tions or activities 1986 9D Exception for agent executing 19 No liability under Fair Trad- trading instruction only ing Act 1986 if not liable 9E Exceptions for takeovers under this Part 9F Exception for redemption of units in unit trust Amendments to disclosure of relevant 9G Exception for Reserve Bank interests by directors and of.cers of public Af.rmative defences issuers 22 New section 19SA inserted trading 10 Absence of knowledge of 19SA Purpose of subpart 10A Inside information obtained 23 Public issuer must keep interests by independent research and register analysis 24 Inspection and copying of interests 10B Equal information register 10C Options and trading plans 25 New section 19ZF substituted 10D Chinese wall defence 19ZF Offences relating to interests register 11 False or misleading statement Market manipulation Amendments to disclosure of interests of or information substantial security holders in public issuers 11A Criminal liability for false or 26 New subpart 3 of Part 2 substituted misleading statement or information Subpart 3—Disclosure of interests 11B False or misleading appear- of substantial security holders in ance of trading, etc public issuers 11C Presumption as to false or 20 Purpose of subpart misleading appearance of 21 Meaning of substantial secur­ trading, etc ity holder, substantial hold­ 11D Criminal liability for false or ings, and percentage misleading appearance of Event disclosure obligations trading, etc 22 Persons must disclose if Subpart 2—General dealing begin to have substantial misconduct prohibition holding 23 Substantial security holders General dealing misconduct must disclose if subsequent movement of 1% in holdings prohibition 13 Misleading or deceptive con­ 24 Substantial security holders duct generally (for dealings in must disclose if subsequent listed and non-listed changes in nature of relevant securities) interests Exceptions 14 Exceptions for takeovers 3 25 Persons must disclose if cease to have substantial holding 26 What disclosure required 27 Form and method of disclosure 28 Public issuer must give acknowledgment of disclosure 29 How to ascertain total voting securities in class of public issuer’s voting securities for purposes of disclosure 30 Exemption for persons with interest in other substantial security holders who comply 31 Exemption for trustee corpo­ rations and nominee companies 32 Conditions of exemption for trustee corporations and nom­ inee companies 32A Exemption for persons under control or acting jointly with trustee corporations and nom­ inee companies 33 Extended time for disclosure for trustees, executors, and administrators Required disclosure obligations 34 Commission may require per­sons to disclose to market 35 relevant interests and powers to get relevant interests Public issuer may require reg­istered holder to disclose rele­ vant interests to it 35A Public issuer may require per­son who has relevant interest to disclose information to it 35B Form and method of notice requiring disclosure Offence 35BA Offence for failure to comply with substantial holding dis­closure obligation Register and publication of substantial holdings 35C 35D 35E Public issuers must maintain register of disclosures of sub­stantial holdings Inspection and copying of substantial holdings register Offences relating to substan­tial holdings register 4 35F Public issuers must publish information on substantial holdings 35G Registered exchange must publish disclosures 35H Offence for failing to publish information on substantial holdings or disclosures 35I No liability for publication of substantial holdings 35J Notice under this subpart not to affect incorporation of public issuer or constitute notice of trust Insertion of new Part 4 on investment advisers and brokers and new Part 5 on enforcement and remedies 27 New Parts 4 and 5 substituted Part 4 Investment advisers and brokers Application of this Part 41 When investment advice given to public, etc Disclosure by investment advisers 41B Investment advisers’ disclo­sure obligation 41C Investment adviser must dis­close experience, quali.ca­tions, professional standing, etc 41D Investment adviser must dis­close certain criminal convic­tions, etc 41E Investment adviser must dis­close fees 41F Investment adviser must dis­close other interests and relationships 41G Investment adviser must dis­close details of securities about which advice given Disclosure by investment brokers 41H Investment brokers’ disclo­sure obligation 41I Investment broker must dis­close certain criminal convic­tions, etc 41J Investment broker must dis­close procedures for dealing with investment money or investment property Method of disclosure 41K How disclosure must be made Other requirements relating to disclosure 41L Disclosure must not be 41M misleading Disclosure of additional information 41N No compliance with disclo­sure obligations if disclosure statement out of date 41O Advertisement must refer to disclosure statement 41P Advertisement must not be deceptive, misleading, or confusing Offences 41Q 41R Offence for failure to comply with disclosure obligation Offence of deceptive, mis­leading, or confusing disclosure 41S Offence of deceptive, mis­leading, or confusing advertisement 41T 41U Recommending, or receiving money for, acquisition of securities prohibited if offer for subscription illegal Defence of immateriality Territorial scope of this Part 41V Territorial scope Miscellaneous 41W No contracting out 41X No liability under Fair Trad­ing Act 1986 if not liable under this Part Part 5 Enforcement and remedies Subpart 2—Commission’s enforcement powers Prohibition and corrective orders 42B When Commission may make prohibition and corrective orders 42C Terms of prohibition and cor­rective orders Disclosure orders 42D When Commission may make disclosure orders 42E Terms of disclosure orders Temporary investment adviser and broker banning orders When Commission may make temporary banning orders for investment adviser or broker activities Terms of temporary banning order for investment adviser and broker activities Process for Commission’s orders Commission must follow steps before making orders Commission may shorten steps for speci.ed orders Commission must give notice after making orders General provisions General provisions on Com-mission’s orders Offence for failing to comply with Commission’s orders Subpart 3—Court’s enforcement powers Injunctions What Court may injunct When Court may grant injunctions and interim injunctions Undertaking as to damages not required by Commission Corrective orders When Court may grant cor­rective orders Terms of corrective orders Disclosure orders When Court may make dis­closure orders Terms of disclosure orders Subpart 4—Civil remedies Overview of civil remedies Overview of civil remedies What are civil remedy provisions Pecuniary penalty orders and declarations of contravention When Court may make pecu­niary penalty orders and dec­larations of contravention 42W Purpose and effect of declara­tions of contravention 42F 42G 42H 42I 42J 42K 42L 42M 42N 42O 42P 42Q 42R 42S 42T 42U 42V 42X What declarations of contra­vention must state 42Y Maximum amount of pecuni­ary penalty 42Z Guidance for Court on how to determine gains made or losses avoided for purposes of maximum amount 42ZA Considerations for Court in determining pecuniary penalty Compensatory orders 42ZB When Court may make com­pensatory orders 42ZC Terms of compensatory orders Civil remedy order for investment advisers’ or brokers’ disclosure obligations 42ZD When Court may make civil remedy order for investment advisers’ or brokers’ disclo­sure obligations 42ZE Terms of civil remedy order for investment advisers’ or brokers’ disclosure obligations Other civil remedy orders 42ZF When Court may make other civil remedy orders 42ZG Terms of other civil remedy orders Interrelationship of civil remedies 42ZH More than 1 civil remedy order may be made for same conduct 42ZI Only one pecuniary penalty order may be made for same conduct General 42ZJ Standard of proof for civil remedies 42ZK Time limit for applying for civil remedies Subpart 5—Criminal offences and penalties Penalties for offences 43 43A 43B Penalties for failing to com­ply with Part 1 Penalties for failing to com­ply with Part 2 Penalties for failing to com­ply with Part 2B 6 43C Penalties for failing to com­ply with Part 3 43D Penalties for failing to com­ply with Part 4 43E Penalties for failing to com­ply with this Part Subpart 5A—Other Court orders Management bans 43F When Court may make man­agement banning orders 43G Terms of management ban­ning orders 43H Offence of contravening man­agement banning order 43I Persons automatically banned from management 43J Only one management ban may be made for same conduct Investment adviser or broker bans 43K When Court may make ban­ning orders for investment adviser or broker activities 43L Terms of investment adviser or broker banning orders 43M Offence of contravening investment adviser or broker banning order 43N Persons automatically banned from investment adviser or broker activities 43O General provisions for bans and banning orders Orders to preserve assets to satisfy claims 43P When Court may prohibit payment or transfer of money, securities, or other property 43Q What orders may be made 43QA Interim orders 43QB Relationship with other law 43QC Offence Subpart 6—General 43R Time for laying information for summary offences 43S Evidence not otherwise admissible 43T Court may order payment of Commission’s costs 43U Orders to secure compliance 43V Giving notice of applications for Court orders 43W General provisions as to Miscellaneous Court’s orders 29 Related amendments 43X Persons entitled to appear 30 Transitional provisions relating to before Court new subpart 3 43Y Knowledge of matters pre­ 31 Transitional provision for existing sumed if employee or agent offences and contravention knows matters Part 2 43Z No pecuniary penalty and .ne Amendments to takeovers legislation for same conduct Amendments to Takeovers Act 1993 Amendments to exemption and regulation Various civil remedy orders empowering provisions 32 Takeovers Act 1993 called principal Act in this Part 28 New sections 48 to 49F and head­ing substituted 33 34 Interpretation Object of this Act Exemptions granted and removed 34A Delegation of certain powers by by Commission Panel 48 Exemptions granted by Commission 34B New section 15B inserted 15B Sharing of information with 48A Commission must notify rea- Commerce Commission sons for exemption 35 New heading inserted 48B Commission may vary or 36 New sections 31L to 31MA revoke exemption substituted 48C Commission may designate 31L Who may receive evidence persons as not exempt from 31M Admissibility of evidence disclosure obligations 31MA How evidence may be given 48D Requirements for Commis­ 37 Power to summon witnesses sion for designations of per­sons as not exempt 38 Panel’s powers in respect of com­pliance with takeovers code Regulations 39 Restraining orders 48E Regulations requiring contin­uous disclosure by public issuers 40 New section 33AA inserted 33AA Permanent compliance orders 48F Requirements for regulations 40A New section 33C substituted replacing continuous disclo­ 33C Restrictions on use of self- sure listing rules incriminating statements 48G Ongoing requirements for obtained by summons 49 continuous disclosure regulations Regulations concerning direc­tors’ and of.cers’ disclosure 41 42 Heading above section 33E and sec­tions 33E and 34 repealed New subpart 2 inserted obligations Subpart 2—Enforcement by Court 49A Regulations concerning sub- Overview of enforcement powers stantial holding disclosure and civil remedies 49B Regulations concerning deal­ 33E Overview of enforcement 49C ing in futures contracts Regulations concerning investment advisers and powers and civil remedies Injunctions brokers 33F What Court may injunct 49D 49E Other regulations Breach of exemption conditions 33G When Court may grant injunctions and interim injunctions 49F Regulations or exemptions in respect of speci.ed overseas 33H Undertaking as to damages not required by Panel jurisdictions False or misleading statement or information 33I When Court may make vari­ ous civil remedy orders 44B False or misleading statement 33J Terms of various civil rem- or information edy orders 44C Criminal liability for false or misleading statement or Compensatory orders information 33K When Court may make com­ 44D Exception for disclosure by pensatory orders investment advisers or 33L Terms of compensatory brokers orders 44DAA Fair Trading Act 1986 Pecuniary penalty orders and excluded declarations of contravention Subpart 3A—Other Court orders 33M When Court may make pecu- Management bans niary penalty orders and dec­ 44DAWhen Court may make man­ larations of contravention agement banning orders 33N Purpose and effect of declara­ 44DB Terms of management ban­ tions of contravention ning orders 33O What declarations of contra­ 44DC Offence of contravening man­ vention must state agement banning order 33P Maximum amount of pecuni­ 44DD Only one management ban­ ary penalty ning order may be made for 33Q Considerations for Court in same conduct determining pecuniary 44DE Persons automatically banned penalty from management General 44DF Panel must be noti.ed of 43 Persons who may apply application to depart from 44 Repeal of sections 36 and 37 management banning order 45 Court may have regard to determi- Orders to preserve assets to nations and recommendations by satisfy claims Panel 44DG When Court may prohibit 46 Sections 39 and 40 repealed payment or transfer of 48 New section 41 substituted money, securities, or other 41 Court may excuse property contravention 44DH What orders may be made 49 Court may require person to give 44DI Interim orders evidence or produce documents 44DJ Relationship with other law relating to interests in securities 44DK Offence 50 New sections 43 to 44J substituted Subpart 4—General 43 More than 1 civil remedy 44E Jurisdiction of Courts in New order may be made for same Zealand conduct 44F Court may order payment of 43A Only one pecuniary penalty Panel’s costs order may be made for same 44FA Orders to secure compliance conduct 44G Giving notice of applications 43B Standard of proof for civil for Court orders remedies 44GA General provisions as to 43C Time limit for applying for Court’s orders civil remedies 44H Persons entitled to appear 51 New heading and subparts 3, 3A, before Court and 4 inserted 44I Knowledge of matters pre-Subpart 3—Offences sumed if employee or agent knows matters General offences 44 General offences 8 44J No pecuniary penalty and .ne Transitional provisions for same conduct 58 Transitional provision for acquisi­52 New Part 4 heading inserted tions made or committed to before commencement of this Part Part 4 59 Transitional provision for existing Miscellaneous offences and contraventions Amendments to takeovers code Part 3 53 Takeovers code is called code in Amendments to Fair Trading Act 1986 this Part 60 Fair Trading Act 1986 called princi­ 54 Interpretation pal Act in this Part 55 Offer period 61 New sections 5A and 5B inserted 56 New Part 8 added 5A No liability under Act if not liable under Securities Mar- Part 8 kets Act 1988 5B Act does not apply to certain Market manipulation 64 Misleading or deceptive conduct regulated by take- conduct overs code 64C Exception for disclosure by investment advisers or 62 New section 48A inserted brokers 48A Sharing of information with Securities Commission or 56A Additional disclosures required if Takeovers Panel consideration includes securities Amendments to replace references to takeovers schemes Schedule 1 57 Amendments to replace references Amendments related to Securities Act to takeovers schemes 1978 Schedule 2 Amendments related to Securities Markets Act 1988 The Parliament of New Zealand enacts as follows: 1 Title This Act is the Securities Legislation Act 2004. 2 Commencement (1) This Act comes into force on 1 November 2005 (except as pro­vided in subsection (2)). Struck out (unanimous) (2) The following provisions come into force on a date to be appointed by the Governor-General by Order in Council: (a) section 22 of this Act (which relates to disclosures of interests of substantial security holders in public issu­ers); and (b) Part 4 of the Securities Markets Act 1988 (which relates to investment advisers and brokers), as inserted by section 27 of this Act, and section 27(2) (which repeals the Investment Advisers (Disclosure) Act 1996). (3) One or more Orders in Council may be made appointing different dates for the commencement of different provisions. New (unanimous) (2) Subpart 2 of Part 1 and Schedule 2 come into force on a date to be appointed by the Governor-General by Order in Council. (3) One or more Orders in Council may be made appointing different dates for the commencement of different provisions of that subpart and schedule. Part 1 Amendments to Securities Acts Subpart 1—Amendments to Securities Act 1978 3 Securities Act 1978 called principal Act in this subpart In this subpart, the Securities Act 19781 is called ‘‘the princi­ pal Act’’. 1 1978 No 103 New (unanimous) Sharing of information provisions 3A New section 17B inserted The principal Act is amended by inserting, after section 17A, the following section: ‘‘17B Sharing of information with Commerce Commission ‘‘(1) The Commission may communicate to the Commerce Com­ mission any information that the Commission— ‘‘(a) holds in relation to the exercise of the Commission’s powers, or the performance of its functions and duties; and ‘‘(b) considers may assist the Commerce Commission in the exercise of the Commerce Commission’s powers, or the performance of its functions and duties, in respect of the Fair Trading Act 1986. ‘‘(2) The Commission may use any information communicated to it by the Commerce Commission under section 48A of the Fair Trading Act 1986 in the Commission’s exercise of its powers, or the performance of its functions and duties. ‘‘(3) This section applies despite anything to the contrary in any enactment, contract, deed, or document.’’ Amendments to delegation of powers by Commission 3B Delegation of powers by Commission Section 27 of the principal Act is amended by repealing sub­section (1), and substituting the following subsection: ‘‘(1) The Commission may not delegate the powers in— ‘‘(a) sections 5(5), 38B, 38F, 44, 44B(2), 67, 69, and 69N: ‘‘(b) sections 34, 36ZO, 48, 48C, and subpart 2 of Part 5, of the Securities Markets Act 1988.’’ Amendments to remedies 4 New heading and sections 55A to 55G inserted (1) The principal Act is amended by inserting, after section 55, the following heading and sections: ‘‘Civil liability ‘‘55A Overview of civil liability ‘‘(1) The following civil remedies (may be) are available from the Court under this Act if there is a civil liability event: ‘‘(a) a pecuniary penalty order and declaration of civil liabil­ ity (on application by the Commission only) under section 55C: ‘‘(b) compensation under section 55G. ‘‘(2) Sections 56 to 57A cover who is liable for the civil liability event for both these remedies. ‘‘(4) This section is a guide only to the general scheme and effect of sections 55B to 57E. ‘‘55B What are civil liability events In this Part, a civil liability event is— ‘‘(a) distribution of an advertisement or a registered prospec­ tus that includes an untrue statement: ‘‘(b) a breach of regulations made under this Act relating to the offer, sale, or management of interests in contribu­ tory mortgages. ‘‘55C When Court may make pecuniary penalty orders and declarations of civil liability If the Commission applies for a pecuniary penalty order against a person under this Act, the Court— ‘‘(a) must determine whether there has been a civil liability event and whether the person is liable for a pecuniary penalty order for that civil liability event under sections 56 to 57A; and ‘‘(b) must make a declaration of civil liability if satis.ed (that there is a civil liability event) of those matters (see sections 55D and 55E); and ‘‘(c) may order the person to pay to the Crown a pecuniary penalty that the Court considers appropriate (see section 55F) if (it is satis.ed that there is a civil liability event, that the person is liable for a pecuniary penalty order for that civil liability event under sections 56 to 57A,) satis.ed of those matters and that the civil liability event— ‘‘(i) materially prejudices the interests of subscribers for the securities involved; or ‘‘(ii) is likely to materially damage the integrity or reputation of any of New Zealand’s securities markets; or ‘‘(iii) is otherwise serious. ‘‘55D Purpose and effect of declarations of civil liability ‘‘(1) The purpose of a declaration of civil liability is to enable a person who brings proceedings under section 55G to rely on the declaration in the proceedings for compensation, and not be required to prove the civil liability event. ‘‘(2) Accordingly, a declaration of civil liability is conclusive evi­dence of the matters that must be stated in it under section 55E. Struck out (unanimous) ‘‘(3) A declaration of civil liability does not state who is liable for the civil liability event as a person’s liability may differ under sections 56 to 57A according to whether the remedy sought is a pecuniary penalty order or compensation. ‘‘55E What declarations of civil liability must state A declaration of civil liability must state the following: ‘‘(a) the court that made the declaration; and ‘‘(b) whether the civil liability event comes within paragraph (a) or paragraph (b) of section 55B; and New (unanimous) ‘‘(ba) the person who has been found liable for the civil liabil­ity event; and ‘‘(c) the conduct that constituted the civil liability event. ‘‘55F Amount of pecuniary penalty ‘‘(1) The maximum amount of a pecuniary penalty under this Act is ($5,000,000) $500,000 for an individual and $5,000,000 for a body corporate, for each civil liability event. ‘‘(2) In determining an appropriate pecuniary penalty, the Court must have regard to all relevant matters, including— ‘‘(a) the nature and extent of the civil liability event; and ‘‘(b) the likelihood, nature, and extent of any damage to the integrity or reputation of New Zealand’s securities mar­kets because of the civil liability event; and ‘‘(c) the nature and extent of any loss or damage suffered by subscribers because of the civil liability event; and Part 1 cl 4 Securities Legislation ‘‘(d) the circumstances in which the civil liability event occurred; and ‘‘(e) whether or not the person has previously been found by the Court in proceedings under this Act to have engaged in any similar conduct. Struck out (unanimous) ‘‘(f) the matters set out in section 57B (interrelationship of civil liability remedies). ‘‘55G When liable persons must pay compensation for civil liability event ‘‘(1) A liable person must pay compensation to all persons who subscribe for any securities on the faith of an advertisement or registered prospectus that includes an untrue statement for the loss or damage that the persons may have sustained by reason of the untrue statement. ‘‘(2) A liable person must pay compensation to all persons who subscribe for an interest in a contributory mortgage, or who hold an interest in a contributory mortgage, for the loss or damage they may have sustained by reason of any breach of regulations made under this Act relating to the offer, sale, or management of interests in contributory mortgages. ‘‘(3) A liable person is a person who is liable for compensation for the relevant civil liability event under any of sections 56 to 57A.’’ New (unanimous) ‘‘55G Compensation orders ‘‘(1) The Court may, on the application of the Commission or a subscriber, order a liable person to pay compensation to all or any of the persons who subscribed for any securities on the faith of an advertisement or registered prospectus that includes an untrue statement, for the loss or damage that the persons have sustained by reason of the untrue statement. ‘‘(2) The Court may, on the application of the Commission or a subscriber for an interest in a contributory mortgage, order a liable person to pay compensation to all or any of the persons who subscribe for an interest in a contributory mortgage or who hold an interest in a contributory mortgage, for the loss or damage they have sustained by reason of any breach of regu­lations made under this Act relating to the offer, sale, or management of interests in contributory mortgages. ‘‘(3) A liable person is a person who is liable for compensation for the relevant civil liability event under any of sections 56 to 57A. ‘‘(4) The liable person must pay any compensation ordered under the compensation order. ‘‘(5) The Court may, if the proceedings were brought or conducted (in whole or in part) by the Commission, direct that the Com-mission’s costs in conducting the proceedings be paid from any amounts recovered under a compensation order. ‘‘(6) Subsection (5) does not limit section 65B.’’ (2) Section 2(1) of the principal Act is consequentially amended by inserting, in its appropriate alphabetical order, the follow­ ing de.nition: ‘‘civil liability event has the meaning set out in section 55B’’. 5 Civil liability for misstatements in advertisement or registered prospectus (1) Section 56 of the principal Act is amended by omitting the heading, and substituting the heading ‘‘Which persons are liable for misstatements’’. (2) Section 56 of the principal Act is amended by repealing sub­ section (1), and substituting the following subsection: ‘‘(1) A person is liable for a pecuniary penalty order (section 55C) (or) and for compensation (section 55G) for the distribution of an advertisement or registered prospectus that includes an untrue statement if— ‘‘(a) the person is the issuer of the securities referred to in the advertisement or registered prospectus (the issuer) and the issuer is an individual: ‘‘(b) in the case of an advertisement, the person— ‘‘(i) is a director of the issuer at the time that the advertisement is distributed; or 15 ‘‘(ii) has authorised himself or herself to be named and is named in the advertisement as a director of the issuer or as having agreed to become a director immediately or after an interval of time: ‘‘(c) in the case of a registered prospectus, the person— ‘‘(i) has signed the prospectus as a director of the issuer or is a (person) director on whose behalf the prospectus has been so signed; or ‘‘(ii) has authorised himself or herself to be named and is named in the prospectus as a director of the issuer or has agreed to become a director either immediately or after an interval of time: ‘‘(d) the person is a promoter of the securities referred to in the advertisement or registered prospectus.’’ Struck out (unanimous) (3) Section 56(3)(b) of the principal Act is amended by inserting, before the words ‘‘after the distribution’’, the words ‘‘(in the case of liability for compensation)’’. (4) Section 56(3) of the principal Act is amended by inserting, after paragraph (b), the following paragraph: ‘‘(ba) (in the case of liability for a pecuniary penalty order) as regards every untrue statement not purporting to be made on the authority of an expert or of a public of.cial document or statement, he or she had reasonable grounds to believe and did believe, up to the time of the distribution of the advertisement or registered prospec­tus, that the statement was true; or’’. (5) Section 56(3)(c) of the principal Act is amended by inserting, before the words ‘‘as regards every untrue statement’’, the words ‘‘(in the case of liability for compensation)’’. 6 Civil liability for misstatements by expert (1) Section 57 of the principal Act is amended by omitting the heading, and substituting the heading ‘‘Which experts are liable for misstatements’’. (2) Section 57 of the principal Act is amended by repealing sub­section (1), and substituting the following subsection: 16 ‘‘(1) A person is liable for a pecuniary penalty order (section 55C) (or) and for compensation (section 55G) for an untrue state­ment included in an advertisement or registered prospectus if— ‘‘(a) the person gave consent to the distribution of the adver­ tisement or registered prospectus under section 38A or section 40 or under regulations made under this Act; and ‘‘(b) the untrue statement purports to be made by him or her as an expert.’’ Struck out (unanimous) (3) Section 57(2)(b) of the principal Act is amended by inserting, before the words ‘‘after the distribution of’’, the words ‘‘(in the case of liability for compensation)’’. (4) Section 57(2) of the principal Act is amended by inserting, after paragraph (b), the following paragraph: ‘‘(ba) (in the case of liability for a pecuniary penalty order) he or she was competent to make the statement and that he or she had reasonable grounds to believe and did, up to the time of the distribution of the advertisement or registered prospectus, believe that the statement was true; or’’. (5) Section 57(2)(c) of the principal Act is amended by inserting, before the words ‘‘he or she was competent’’, the words ‘‘(in the case of liability for compensation)’’. 7 Civil liability for breach of contributory mortgage regulations (1) Section 57A of the principal Act is amended by omitting the heading, and substituting the heading ‘‘Which persons are liable for breaches of contributory mortgage regulations’’. (2) Section 57A of the principal Act is amended by repealing subsection (1), and substituting the following subsection: ‘‘(1) A person is liable for a pecuniary penalty order (section 55C) (or) and for compensation (section 55G) for a breach of regula­ tions made under this Act relating to the offer, sale, or man­ agement of interests in contributory mortgages if,— 17 ‘‘(a) in the case of a contributory mortgage broker who is an individual, the person acts, or is charged with acting, as the contributory mortgage broker for the contributory mortgage at the time that the breach occurred: ‘‘(b) in the case of a contributory mortgage broker that is a body corporate or other body, the person is— ‘‘(i) the contributory mortgage broker; or ‘‘(ii) a director of the contributory mortgage broker that is acting, or is charged with acting, as the contributory mortgage broker for the contribu­tory mortgage at the time that the breach occurred.’’ New heading and sections 57B to 57E inserted The principal Act is amended by inserting, after section 57A, the following heading and sections: ‘‘General provisions on civil liability remedies Struck out (unanimous) ‘‘57B Interrelationship of civil liability remedies ‘‘(1) A person may be liable for both a pecuniary penalty order and compensation for the same conduct. ‘‘(2) However, in determining whether a person is liable for one kind of remedy (remedy A) and, if they are, the amount or effect of remedy A, the Court must have regard to— ‘‘(a) whether another remedy (remedy B) has been imposed on the person for the conduct concerned in the applica­tion for remedy A; and ‘‘(b) if so, the amount or effect of remedy B. New (unanimous) ‘‘57B Pecuniary penalty order and compensation order may be made for same conduct A person may be liable for both a pecuniary penalty order and compensation for the same conduct. ‘‘57C Only one pecuniary penalty order may be made for same conduct If conduct by a person constitutes 2 or more civil liability events, proceedings may be brought against that person for any 1 or more of the civil liability events, but no person is liable to more than 1 pecuniary penalty order for the same conduct. ‘‘57D Standard of proof for civil remedies The proceedings under sections 55A to 57A are civil proceed­ings and the usual rules of the Court and rules of evidence and procedure for civil proceedings apply (including the standard of proof). ‘‘57E Time limit for applying for civil remedies ‘‘(1) An application for a pecuniary penalty order may be made at any time within 2 years after the date on which the matter giving rise to the civil liability event was discovered or ought reasonably to have been discovered. ‘‘(2) The usual time limits apply to all applications for compensation. New (unanimous) ‘‘(3) However, an application for compensation in respect of the civil liability event may be made at any time within 6 months after the date on which a declaration of civil liability is made, even if the usual time limit has expired.’’ 9 New heading inserted The principal Act is amended by inserting, (after section 59) before section 58, the following heading: ‘‘Criminal liability’’. 10 Criminal liability for obstructing exercise of powers (1) Section 59A(1) of the principal Act is amended by repealing paragraphs (b) and (c), and substituting the following paragraphs: ‘‘(b) having been summoned to appear before the Commis­sion or a member, of.cer, or employee of the Commis­sion, for the purposes of any matter, without reasonable excuse— ‘‘(i) refuses or fails to appear: ‘‘(ii) refuses to take an oath or af.rmation as a witness: ‘‘(iii) refuses to answer any question: ‘‘(iv) fails or refuses to (produce) provide any docu­ ment or information that the person is required to provide; or ‘‘(c) deceives or attempts to deceive or knowingly misleads the Commission or a member, of.cer, or employee of the Commission in providing evidence to any of them; or’’. (2) Section 59A of the principal Act is amended by inserting, after subsection (1), the following subsection: ‘‘(1A) A body corporate commits an offence under subsection (1)(b)(ii) or subsection (1)(b)(iii) if its representative appearing for it ref­uses to take an oath or af.rmation as a witness or refuses to answer any question.’’ 11 New sections 60A to 60G and headings inserted The principal Act is amended by inserting, after section 60, the following headings and sections: ‘‘Management bans ‘‘60A When Court may make management banning orders ‘‘(1) The Court may, on application by an entitled person, make a management banning order against a person (A) if— ‘‘(a) A has been convicted of an offence against (this Act) any of sections 58, 59, or 59A or a pecuniary penalty order has been made against A under this Act; or Struck out (unanimous) ‘‘(b) A has, while a director of an incorporated or unincorpo­rated body, persistently contravened this Act or, if the incorporated or unincorporated body has so contra­vened, persistently failed to take all reasonable steps to obtain compliance with this Act; or ‘‘(b) A has, while a director of an incorporated or unincorpo­rated body,— ‘‘(i) persistently contravened this Act, the Companies Act 1993, the Securities Markets Act 1988, the Takeovers Act 1993, or the takeovers code in force under that Act; or ‘‘(ii) if the incorporated or unincorporated body has so contravened, persistently failed to take all reason­able steps to obtain compliance with those Acts or the code; or ‘‘(c) A has been prohibited in an overseas jurisdiction from carrying on activities that the Court is satis.ed are sub­stantially similar to any of the activities referred to in section 60B in connection with a contravention of any law relating to the offering of securities. ‘‘(2) An entitled person is— ‘‘(a) the Commission: ‘‘(b) the Registrar: ‘‘(c) an incorporated or unincorporated body that— ‘‘(i) A is a director of at the time of the application; or ‘‘(ii) A was a director of at the time of the event that triggers the making of the order under subsection (1): ‘‘(d) the liquidator of an incorporated or unincorporated body referred to in paragraph (c): ‘‘(e) a person who is, or has been, a security holder or credi­tor of an incorporated or unincorporated body referred to in paragraph (c). Struck out (unanimous) ‘‘60B Terms of management banning orders A management banning order may prohibit or restrict the person (without the leave of the Court) from being a director or promoter of, or in any way (whether directly or indirectly) being concerned or taking part in the management of, an incorporated or unincorporated body for a period stated in the order of 10 years or less. ‘‘60B Terms of management banning orders A management banning order may, for a period stated in the order of 10 years or less, prohibit or restrict the person (with­out the leave of the Court) from being a director or promoter of, or in any way (whether directly or indirectly) being con­cerned or taking part in the management of, an incorporated or unincorporated body (other than an overseas company, or an incorporated or unincorporated body, that does not carry on business in New Zealand). ‘‘60C Offence of contravening management banning order Struck out (unanimous) A person who acts in contravention of a court order under section 60A commits an offence and is liable on conviction on indictment— ‘‘(a) in the case of an individual, to imprisonment for a term not exceeding 3 years or to a .ne not exceeding $100,000, or to both: ‘‘(b) in the case of a body corporate, to a .ne not exceeding $300,000. New (unanimous) An individual who acts in contravention of a court order under section 60A commits an offence and is liable on conviction on indictment to imprisonment for a term not exceeding 3 years or to a .ne not exceeding $100,000, or to both. ‘‘60D Only one management banning order may be made for same conduct If conduct by a person constitutes grounds for making an order under any 1 or more of section 60A of this Act, section 43F of the Securities Markets Act 1988, section 44DA of the Take­overs Act 1993, and section 383 of the Companies Act 1993, proceedings may be brought against that person under any 1 ‘‘60E Persons automatically banned from management ‘‘(1) This section applies to a person if the person has been con­victed of an offence against (this Act) either section 58 or 59A or a pecuniary penalty order has been made against the person under this Act. ‘‘(2) The person must not, for the period of 5 years after the conviction or making of the order (without the leave of the Court) be a director or promoter of, or in any way (whether directly or indirectly) be concerned or take part in the manage­ment of, an incorporated or unincorporated body (other than an overseas company, or an incorporated or unincorporated body, that does not carry on business in New Zealand). Struck out (unanimous) ‘‘(3) A person who acts in contravention of this section commits an offence and is liable on conviction on indictment,— ‘‘(a) in the case of an individual, to imprisonment for a term not exceeding 3 years or to a .ne not exceeding $100,000, or to both: ‘‘(b) in the case of a body corporate, to a .ne not exceeding $300,000. New (unanimous) ‘‘(3) An individual who acts in contravention of this section com­mits an offence and is liable on conviction on indictment to imprisonment for a term not exceeding 3 years or to a .ne not exceeding $100,000, or to both. ‘‘60EA Commission must be noti.ed of application for leave to depart from management ban ‘‘(1) A person intending to apply for the leave of the Court under section 60B or section 60E must give to the Commission not less than 10 working days’ written notice of that person’s intention to apply. ‘‘(2) The Commission, and any other persons that the Court thinks .t, may attend and be heard at the hearing of the application. Struck out (unanimous) ‘‘60F References in other enactments to management bans in Companies Act 1993 extend to management bans in principal Act ‘‘(1) A reference in any enactment to a person who is prohibited from being a director or promoter of, or being concerned or taking part in the management of, a company under section 382, 383, or 385 of the Companies Act 1993 must be read as extending also to a person who is prohibited from being a director or promoter of, or being concerned or taking part in the management of, an incorporated or unincorporated body under section 60A or 60E. ‘‘(2) This section does not apply if the enactment provides that it does not apply. ‘‘General provisions on liability ‘‘60G No pecuniary penalty and .ne for same conduct A person cannot be ordered to pay a pecuniary penalty and be liable for a .ne under this Act for the same conduct. New (unanimous) ‘‘Orders to preserve assets to satisfy claims ‘‘60F When Court may prohibit payment or transfer of money, securities, or other property ‘‘(1) This section applies if— ‘‘(a) an investigation is being carried out under this Act in relation to an act or omission by a person, being an act or omission that constitutes or may constitute a contra­vention of this Act; or ‘‘(b) a prosecution has begun against a person for a contra­vention of this Act; or ‘‘(c) a civil proceeding has begun against a person under this Act. ‘‘(2) The Court may, on application by the Commission or by an aggrieved person, make 1 or more of the orders listed in section 60FA if the Court considers it necessary or desirable to do so for the purpose of protecting the interests of an aggrieved person. ‘‘(3) In this section,— ‘‘aggrieved person means any person to whom a relevant person is liable ‘‘liable means liable, or may be or become liable, to pay money (whether in respect of a debt, by way of damages or compensation, or otherwise) or to account for securities or other property ‘‘relevant person means a person referred to in subsection (1). Compare: Section 1323(1), Corporations Act 2001 (Aust.) ‘‘60FA What orders may be made ‘‘(1) The orders that may be made under section 60F are— ‘‘(a) an order prohibiting the relevant person from transfer­ring, charging, or otherwise dealing with money, secur­ities, or other property held or controlled by the relevant person: ‘‘(b) an order prohibiting a person who is indebted to the relevant person or to an associated person of the rele­vant person from making a payment in total or partial discharge of the debt to, or to another person at the direction or request of, the person to whom the debt is owed: ‘‘(c) an order prohibiting a person holding money, securities, or other property, on behalf of the relevant person, or on behalf of an associated person of the relevant person, from paying all or any of the money, or transferring, or otherwise parting with possession of, the securities or other property, to, or to another person at the direction or request of, the person on whose behalf the money, securities, or other property, is or are held: ‘‘(d) an order prohibiting the taking or sending out of New Zealand by a person of money of the relevant person or of an associated person of the relevant person: ‘‘(e) an order prohibiting the taking, sending, or transfer by a person of securities or other property of the relevant person, or of an associated person of the relevant person from a place in New Zealand to a place outside New Zealand (including the transfer of securities from a register in New Zealand to a register outside New Zealand): ‘‘(f) an order requiring the relevant person, or any person holding money, securities, or other property on behalf of the relevant person or an associated person of the relevant person, to pay or transfer money, securities, or other property to a speci.ed person to be held on trust pending determination of the investigation, prosecu­tion, or civil proceeding: ‘‘(g) an order appointing,— ‘‘(i) if the relevant person is a natural person, a receiver or trustee, having any powers that the Court orders, of the property or of part of the property of that person; or ‘‘(ii) if the relevant person is a body corporate, a receiver or receiver and manager, having any powers that the Court orders, of the property or of part of the property of that person: ‘‘(h) if the relevant person is a natural person, an order requiring that person to deliver up to the Court his or her passport and any other documents that the Court thinks .t: ‘‘(i) if the relevant person is a natural person, an order prohibiting that person from leaving New Zealand, without the consent of the Court. ‘‘(2) A reference in subsection (1)(e) or (g) to property of a person includes a reference to property that the person holds other­wise than as sole bene.cial owner, for example,— ‘‘(a) as trustee for, as nominee for, or otherwise on behalf of or on account of, another person; or ‘‘(b) in a .duciary capacity. ‘‘(3) An order may be expressed to operate for a speci.ed period or until the order is discharged by a further order under this section. Compare: Section 1323(1), (2A), (6), Corporations Act 2001 (Aust.) ‘‘60FB Interim orders ‘‘(1) If an application is made to the Court for an order under section 60F, the Court may, if in the opinion of the Court it is desirable to do so, before considering the application, grant an interim order, being an order of the kind applied for that is expressed to have effect pending the determination of the application. ‘‘(2) The Court must not require the applicant or any other person, as a condition of granting an interim order under this section, to give an undertaking as to damages. Compare: Section 1323(3), (4), Corporations Act 2001 (Aust.) ‘‘60FC Relationship with other law ‘‘(1) Nothing in sections 60F to 60FB affects the powers that the Court has apart from those sections. ‘‘(2) This section has effect subject to the Insolvency Act 1967. Compare: Section 1323(7), (8) Corporations Act 2001 (Aust.) ‘‘60G Offence A person commits an offence who contravenes an order by the Court under section 60FA or section 60FB that is applicable to the person and is liable on conviction on indictment,— ‘‘(a) in the case of an individual, to imprisonment for a term not exceeding 3 years or to a .ne not exceeding $100,000, or both: ‘‘(b) in the case of a body corporate, to a .ne not exceeding $300,000. Compare: Section 1323(9), (10), Corporations Act 2001 (Aust.).’’ 12 Heading above section 65A amended The heading above section 65A of the principal Act is amended by omitting the word ‘‘General’’, and substituting the words ‘‘Other general’’. New (unanimous) 12 New heading above section 65A substituted The principal Act is amended by repealing the heading above section 65A, and substituting the heading ‘‘Other general provisions’’. 12A New sections 65B to 65E inserted The principal Act is amended by inserting, after section 65A, the following sections: ‘‘65B Court may order payment of Commission’s costs If the Commission brings or conducts proceedings under this Act and the Court makes any order against a person under this Act, the Court may also order that person to pay the Commis-sion’s costs and expenses in conducting the proceedings. ‘‘65C Orders to secure compliance The Court may, for the purpose of securing compliance with any other order it makes under this Act, direct a person to do or refrain from doing a speci.ed act. ‘‘65D Giving notice of application for Court orders Before making an order under this Act, the Court may direct the person making the application for the order to— ‘‘(a) give notice of the application to those persons the Court thinks .t: ‘‘(b) publish notice of the application in the manner the Court thinks .t. ‘‘65E General provisions as to Court’s orders ‘‘(1) An order under this Act may be made on the terms and conditions the Court thinks .t. ‘‘65F No pecuniary penalty and .ne for same conduct A person cannot be ordered to pay a pecuniary penalty and be liable for a .ne under this Act for the same conduct.’’ Amendments to investigation and enforcement powers 13 New sections 69B, 69BA, and 69C substituted The principal Act is amended by repealing sections 69B and 69C, and substituting the following sections: ‘‘69B Who may receive evidence ‘‘(1) The Commission may receive evidence through a member, of.cer, or employee of the Commission, or any 2 or more of them. ‘‘(2) However, if a person who is summoned to give evidence under section 69D requests that the evidence be received by a meeting of the Commission, then— ‘‘(a) subsection (1) does not apply, and the evidence must be received at a meeting of the Commission; and ‘‘(b) the meeting must not be held by a method under section 15(2A)(b) except with the consent of the person summoned. ‘‘69BA Admissibility of evidence The Commission may receive in evidence, whether admissi­ble in a court of law or not, any statement, document, informa­tion, or matter that— ‘‘(a) in the opinion of the person receiving it, may assist the Commission in dealing effectively with any matter before it; or ‘‘(b) the Commission may receive under section 69F. ‘‘69C How evidence may be given ‘‘(1) The Commission may receive evidence— ‘‘(a) given on oath: ‘‘(b) given not on oath: 29 ‘‘(c) if the person receiving the evidence permits it, given by a written statement: ‘‘(d) if the person receiving evidence permits it, given by a written statement veri.ed on oath: ‘‘(e) given by audio-visual communication, if the Commis­sion and the person giving the evidence agree. ‘‘(2) A member, of.cer, or an employee of the Commission may administer an oath for the purpose of a person giving evidence on oath.’’ 14 Power to summon witnesses (1) Section 69D of the principal Act is amended by repealing subsection (1), and substituting the following subsection: ‘‘(1) A member of the Commission may issue a summons to a person requiring that person to appear (in the case of a body corporate, to appear by its authorised representative) before the Commission, or a member, of.cer, or employee of the Commission, in relation to any matter before the Commission and to do any of the following things: ‘‘(a) give evidence: ‘‘(b) give evidence under oath: ‘‘(c) provide any documents or information that are (now) in the person’s possession or control and that are relevant to the matter.’’ (2) Section 69D(2) of the principal Act is amended by repealing paragraph (c), and substituting the following paragraph: ‘‘(c) the person’s right to request that the person give evi­dence at a meeting of the Commission; and’’. (3) Section 69D of the principal Act is amended by repealing subsection (3), and substituting the following subsection: ‘‘(3) A summons may be served— ‘‘(a) in the case of a natural person, by delivering it person­ally to the person summoned or by leaving it at his or her usual place of residence or business at least 24 hours before his or her attendance is required: ‘‘(b) in the case of a body corporate, by leaving it at the body corporate’s usual place of business at least 24 hours before its attendance is required.’’ 30 14A Right to be heard and represented at proceedings before Commission Section 69L(1) of the principal Act is amended by repealing paragraphs (g) and (h), and substituting the following paragraph: ‘‘(g) at a meeting for the purposes of section 42H of the Securi­ties Markets Act 1988, the persons to whom notice of the order must be given under that section:’’. 15 New section 69U substituted The principal Act is amended by repealing section 69U, and substituting the following section: ‘‘69U Restrictions on use of self-incriminating statements obtained by summons ‘‘(1) A self-incriminating statement made orally by a person sum­moned under section 69D (whether or not the statement is recorded in writing) in the course of answering any question before, or providing any information or document to, the Commission, or a member, of.cer, or employee of the Com­mission, (is not admissible as evidence in)— Struck out (unanimous) ‘‘(a) criminal proceedings against that person; or ‘‘(b) proceedings under this Act or the Securities Markets Act 1988 for a pecuniary penalty order against that person. New (unanimous) ‘‘(a) subject to paragraph (b), is not admissible in— ‘‘(i) criminal proceedings against that person; or ‘‘(ii) proceedings under this Act, the Securities Mar­ kets Act 1988, or the Takeovers Act 1993 for a pecuniary penalty order against that person; but ‘‘(b) is admissible against that person in any proceeding in respect of the falsity of the person’s testimony, for example, in a prosecution for perjury or for an offence under section 59A(1). Struck out (unanimous) ‘‘(2) However, a statement of that kind is admissible in evidence in proceedings where the person gives evidence inconsistent with the statement. ‘‘(3) In addition,— ‘‘(a) a refusal or failure to answer a question or provide information or a document or comply with any other requirement may be used in evidence against that per­son in proceedings for an offence under section 59A(1) arising from that refusal or failure; and ‘‘(b) the answering of a question in a way that is (deceptive or) false, deceptive, or misleading or the providing of information or a document that is (deceptive or) false, deceptive, or misleading may be used in evidence against that person in proceedings for an offence under section 59A(1) arising from that act.’’ Amendments to regulation empowering provisions 16 New sections 70AA to 70AAF inserted The principal Act is amended by inserting, after section 70, the following sections: ‘‘70AA Regulations may require compliance with generally accepted accounting practice and incorporate .nancial reporting standards by reference ‘‘(1) Regulations may— ‘‘(a) require any person, class of persons, information, or class of information to comply with generally accepted accounting practice either generally or in speci.ed cir­ cumstances; and ‘‘(b) incorporate by reference any approved .nancial report­ ing standard. 32 the regulations. ‘‘(3) Material incorporated by reference in regulations has legal effect as part of the regulations. ‘‘(4) In this section and in sections 70AAB to 70AAF,— ‘‘approved .nancial reporting standard has the same meaning as in section 2(1) of the Financial Reporting Act 1993 ‘‘chief executive means the chief executive of the Ministry ‘‘generally accepted accounting practice has the same meaning as in section 3 of the Financial Reporting Act 1993 ‘‘material incorporated by reference means any particular approved .nancial reporting standard that is incorporated by reference under subsection (1)(b) ‘‘Ministry means the department of State that, with the autho­ rity of the Prime Minister, is responsible for the administra­tion of this Act. ‘‘70AAB Effect of amendments to, or replacement of, material incorporated by reference in regulations An amendment to, or replacement of, material incorporated by reference in regulations (regulations A) has legal effect as part of regulations A. ‘‘70AAC Access to material incorporated by reference ‘‘(1) The chief executive (must)— ‘‘(a) must make the material referred to in subsection (3) (material) available for inspection during working hours free of charge at the head of.ce of the Ministry; and ‘‘(b) must make copies of the material available for purchase at a reasonable price at the head of.ce of the Ministry; and ‘‘(c) to the extent that there is no legal impediment to doing so, make copies of the material available, free of charge and at all reasonable times, on or through an Internet website maintained by or on behalf of the Ministry (for example, through a hypertext link); and New (unanimous) ‘‘(c) may make copies of the material available in any other way that the chief executive considers appropriate in the circumstances (for example, on an Internet web-site); and ‘‘(d) must give notice in the Gazette stating that— ‘‘(i) the material is incorporated in the regulations and the date on which the regulations were made; and ‘‘(ii) the material is available for inspection during working hours, free of charge (and the place at which it can be inspected), at the head of.ce of the Ministry and giving the location of that of.ce; and ‘‘(iii) copies of the material can be purchased (and the place at which they can be purchased) at the head of.ce of the Ministry and giving the location of that of.ce; and Struck out (unanimous) ‘‘(iv) if applicable, the material is available on the Internet, free of charge, and stating the website address. New (unanimous) ‘‘(iv) if copies of the material are made available under paragraph (c), the material is available in other ways and details of where or how it can be accessed or obtained. ‘‘(3) The material is— ‘‘(a) material incorporated by reference in regulations; and ‘‘(b) either— ‘‘(i) any amendment to, or replacement of, the material referred to in paragraph (a); or ‘‘(ii) the material referred to in paragraph (a) with the amendments or replacement material amalga­mated within it. ‘‘(4) A failure to comply with this section does not invalidate regulations that incorporate material by reference. ‘‘70AAD Acts and Regulations Publication Act 1989 not applicable to material incorporated by reference The Acts and Regulations Publication Act 1989 does not apply to material incorporated by reference in regulations or to an amendment to, or replacement of, that material. ‘‘70AAE Application of Regulations (Disallowance) Act 1989 to material incorporated by reference ‘‘(1) Nothing in section 4 of the Regulations (Disallowance) Act 1989 requires material that is incorporated by reference in regulations to be laid before the House of Representatives. ‘‘(2) Except as set out in subsection (1), the Regulations (Disallow­ance) Act 1989 applies to regulations that incorporate material by reference. ‘‘70AAF Application of Standards Act 1988 not affected Sections 70AA to 70AAE do not affect the application of sections 22 to 25 of the Standards Act 1988.’’ New (unanimous) 16A Registration of judgment Section 83 of the principal Act is amended by inserting, after the expression ‘‘section 80’’, the words ‘‘as a civil judgment debt’’. 17 Transitional validation for small employer superannuation schemes (1) Nothing in sections 37, 37A(1)(c), and 39 to 44 of the princi­pal Act applied in respect of any interest in a small employer superannuation scheme on and from 15 April 2004 until the close of 23 October 2004. (2) During that period, the investment statement for a small employer superannuation scheme did not have to contain the statement required by clause 1(2) of Schedule 3D of the Securities Regulations 1983, as in force on 15 April 2004, if it instead contained the statement required by that clause as in force immediately before 15 April 2004. (3) In this section, small employer superannuation scheme has the meaning set out in regulation 2C of the Securities Regula­tions 1983, as in force immediately before 15 April 2004 (the date on which the Securities Amendment Act 2004 came into force). Transitional provisions 18 Transitional provision for existing offences and contraventions (1) The principal Act continues to have effect as if it were not amended by this subpart for the purpose of— (a) investigating an existing offence or contravention: (b) commencing or completing proceedings for an existing offence or contravention: (c) imposing a penalty or other remedy, or making an order, in relation to an existing offence or contravention. Struck out (unanimous) (2) In this section, existing offence or contravention means an offence under, or contravention of, the principal Act that was committed or done before the commencement of this subpart. (2) In this section, existing offence or contravention means— (a) an offence under, or contravention of, the principal Act that was committed or done in respect of a prospectus that was registered, or an investment statement that was distributed, before the commencement of this subpart; and (b) in any other case, an offence under, or contravention of, the principal Act that was committed or done before the commencement of this subpart. 18A Related amendments The enactments speci.ed in Schedule 1 are amended in the manner set out in that Schedule. Subpart 2—Amendments to Securities Markets Act 1988 19 Securities Markets Act 1988 called principal Act in this subpart In this subpart, the Securities Markets Act 19882 is called ‘‘the principal Act’’. 2 1988 No 234 Amendments to interpretation 20 New sections 2 to 6 substituted The principal Act is amended by repealing sections 2 to 6A, and substituting the following sections: ‘‘2 Interpretation ‘‘(1) In this Act, unless the context otherwise requires,— ‘‘acquire— ‘‘(a) includes obtain by buying or subscribing; and ‘‘(b) includes agree to acquire; but New (unanimous) ‘‘(c) in Part 3, has the meaning set out in section 37(1) ‘‘advice advertisement means a form of communication that— Part 1 cl 20 Securities Legislation ‘‘(a) contains or refers to investment advice or is reasonably likely to induce persons to seek investment advice; and ‘‘(b) is authorised or instigated by, or on behalf of, an invest­ ment adviser or prepared with the co-operation of, or by arrangement with, an investment adviser; and ‘‘(c) is to be, or has been, distributed to a person New (unanimous) ‘‘associated persons or persons associated with each other has the meaning set out in subsection (2) ‘‘authorised futures contract has, in Part 3, the meaning set out in section 37(1) ‘‘authorised futures exchange has, in Part 3, the meaning set out in section 37(1) ‘‘broker advertisement means a form of communication that— ‘‘(a) refers to an investment broker or is reasonably likely to induce persons to seek an investment broker service; and ‘‘(b) is authorised or instigated by, or on behalf of, an invest­ment broker or prepared with the co-operation of, or by arrangement with, an investment broker; and ‘‘(c) is to be, or has been, distributed to a person ‘‘business includes any profession, trade, or undertaking, whether or not carried on with the intention of making a pecuniary pro.t ‘‘business rules means the rules made by a securities exchange that govern the conduct of— ‘‘(a) business on securities markets operated by the securi­ties exchange: ‘‘(b) persons authorised to undertake trading activities on those securities markets ‘‘chief executive means the chief executive of the department that, with the authority of the Prime Minister, is for the time being responsible for the administration of this Act ‘‘civil remedy order has the meaning set out in section 42T ‘‘civil remedy provision has the meaning set out in section 42U ‘‘class, in relation to securities, means a class of securities having attached to them identical rights, privileges, limita­tions, and conditions ‘‘Commission means the Securities Commission established under the Securities Act 1978 New (unanimous) ‘‘commodity has, in Part 3, the meaning set out in section 37(1) ‘‘company means a company, or an overseas company, within the meaning of section 2(1) of the Companies Act 1993 ‘‘conduct rules means the business rules and the listing rules of a securities exchange ‘‘consideration includes consideration other than money ‘‘continuous disclosure direction has the meaning set out in section 36ZP ‘‘continuous disclosure exemption means,— ‘‘(a) if section 19C does not apply to an exchange, an exemption or waiver of a continuous disclosure provi­sion or provisions of the registered exchange’s listing rules; or ‘‘(b) if section 19C applies to an exchange, an exemption from a provision or provisions of regulations made under section 48E that apply to that exchange ‘‘continuous disclosure obligation means section 19B or section 19C (whichever is applicable) and any listing rules or regulations with which either of those sections requires compliance ‘‘continuous disclosure provisions has the meaning set out in section 19D New (unanimous) ‘‘contravene includes, in Part 5, in relation to a provision, prohibition, obligation, or exemption (a provision),— ‘‘(a) a contravention of the provision; or ‘‘(b) an attempt to contravene the provision; or ‘‘(c) aiding, abetting, counselling, or procuring any other person to contravene the provision; or ‘‘(d) inducing, or attempting to induce, any other person, whether by threats or promises or otherwise, to contra­vene the provision; or ‘‘(e) being in any way, directly or indirectly, knowingly con­cerned in, or a party to, the contravention by any other person of the provision; or ‘‘(f) conspiring with any other person to contravene the provision ‘‘control, in subpart 1 of Part 2B, has the meaning set out in section 36S ‘‘co-operative company means a company that is registered as a co-operative company under the Co-operative Companies Act 1996 ‘‘Court means, in relation to any matter, the Court before which the matter is to be determined New (unanimous) ‘‘deal, in Part 3, in relation to a futures contract, has the meaning set out in section 37(5) and (6) ‘‘dealings in securities, in subpart 2 of Part 1,— ‘‘(a) means, in relation to the securities of a public issuer, any of the following steps: ‘‘(i) acquiring or disposing of securities; or ‘‘(ii) offering securities for subscription and issuing and allotting securities; or ‘‘(iii) underwriting securities; or ‘‘(iv) anything that is preparatory to, or related to, any dealings in securities (for example, giving invest­ment advice) unless an exception applies to those dealings under that subpart; and ‘‘(b) means, in relation to securities that are not listed on a registered exchange, any of the steps referred to in paragraph (a) taken in the course of business; but ‘‘(c) excludes any dealings exempted by regulations made under section 49D ‘‘director means— ‘‘(a) in relation to a company, any person occupying the position of a director of the company by whatever name called: ‘‘(b) in relation to a partnership (other than a special partner­ ship), any partner: ‘‘(c) in relation to a special partnership, any general partner: ‘‘(d) in relation to a body corporate or unincorporate, other than a company, partnership, or special partnership, any person occupying a position in the body that is compa­ rable with that of a director of a company: ‘‘(e) in relation to any other person, that person ‘‘directors’ and of.cers’ disclosure obligation means any of sections 19T to 19V and any regulations with which those sections require compliance ‘‘dispose of— ‘‘(a) includes dispose of by selling, allotting, withdrawing from, or terminating; and ‘‘(b) includes agree to dispose of; but New (unanimous) ‘‘(c) in Part 3, has the meaning set out in section 37(1) ‘‘distribute includes— ‘‘(a) make available, publish, and circulate; and ‘‘(b) communicate by letter, newspaper, broadcasting, sound recording, television, cinematographic .lm, video, or any form of electronic or other means of communication ‘‘document means any record of information; and includes— ‘‘(a) anything on which there is writing or any image; and Part 1 cl 20 Securities Legislation ‘‘(b) information recorded by means of any article or device (for example, a disk) from which information is capable of being reproduced with or without the aid of any other article or device; and ‘‘(c) material subsequently derived from information recorded by that means New (unanimous) ‘‘encourage includes incite, counsel, or procure ‘‘engaging in conduct means doing or refusing to do an act, and includes,— ‘‘(a) omitting to do an act; or ‘‘(b) making it known that an act will or will not be done ‘‘exemption means, in Part 5, in respect of an obligation or provision, an exemption granted by or under this Act from that obligation or provision (for example, a continuous disclo ­sure obligation exemption is an exemption from a continuous disclosure obligation), and a reference to a person contraven ­ing or complying with an exemption is to a person contra ­vening or complying with a term or condition of that exemption ‘‘futures contract has, in Part 3, the meaning set out in section 37(1) ‘‘general dealing misconduct prohibition means section 13 ‘‘generally available to the market has the meaning set out in section 4 ‘‘holding company has the same meaning as in sections 5 and 6 of the Companies Act 1993 ‘‘information insider has the meaning set out in section 8A ‘‘inside information has the meaning set out in section 8B ‘‘insider conduct prohibition means any of sections 8C to 8E ‘‘investment advice and advice— ‘‘(a) mean a recommendation, opinion, or guidance given to a member of the public in relation to acquiring or dis­posing of (or not acquiring or disposing of) securities; and ‘‘(b) include any such recommendation, opinion, or gui­dance that is communicated by letter, newspaper, peri­odical, broadcasting, sound recording, television, cine­matographic .lm, video, or any form of electronic or other means of communication; but— ‘‘(c) do not include— ‘‘(i) any such recommendation, opinion, or guidance given by a person whose principal occupation is that of a journalist and that is given in that per-son’s capacity as a journalist; or ‘‘(ii) any such guidance about the procedure for taking any of the steps referred to in paragraph (a); or ‘‘(iii) any of the following: ‘‘(A) a prospectus; or ‘‘(B) an investment statement; or ‘‘(C) an authorised advertisement; or ‘‘(D) a bank disclosure statement; or New (unanimous) ‘‘(E) a document or documents issued in lieu of a prospectus or investment statement in accordance with an exemption under the Securities Act 1978 ‘‘investment adviser and adviser— ‘‘(a) mean a person (whether or not the person is also an investment broker) who, in the course of the person’s business or employment, gives investment advice; and ‘‘(b) if a person is giving investment advice in the course of his or her employment, include both that person and his or her employer; but ‘‘(c) do not include an issuer or a promoter or a trustee (within the meaning of the Securities Act 1978 or the Unit Trusts Act 1960) or a statutory supervisor (within the meaning of the Securities Act 1978), of the particu­lar securities to which the advice relates; but do include an employee or agent of, or person otherwise associated with, that issuer, promoter, trustee, or statutory super­visor if the employee, agent, or person associated falls within paragraph (a); and Part 1 cl 20 Securities Legislation ‘‘(d) do not include a person who only transmits investment advice relating to particular securities given by the issuer or a promoter or a trustee (within the meaning of the Securities Act 1978 or the Unit Trusts Act 1960) or a statutory supervisor (within the meaning of the Secur­ities Act 1978) of those securities; and New (unanimous) ‘‘(e) do not include— ‘‘(i) the offeror or target company in a takeover offer made under the takeovers code: ‘‘(ii) an independent adviser in the exercise of that person’s functions under the takeovers code ‘‘investment advisers’ disclosure obligations means any of sections 41B to 41G and sections 41K to 41O and any regulations with which those sections require compliance, and invest­ment advisers’ obligations means those sections and regula­tions and sections 41P and 41T ‘‘investment broker and broker— ‘‘(a) mean a person (whether or not the person is also an investment adviser) who, in the course of the person’s business or employment, receives investment money or investment property; and ‘‘(b) if a person is receiving such investment money or investment property in the course of his or her employ­ment, include both that person and his or her employer; but ‘‘(c) do not include, in relation to a security to which the investment money or investment property relates,— ‘‘(i) an issuer or a trustee (within the meaning of the Securities Act 1978 or the Unit Trusts Act 1960); or ‘‘(ii) a nominated person of a trustee (within the mean­ing of the Unit Trusts Act 1960); or ‘‘(iii) a nominee of a nominated person of a trustee (within the meaning of the Unit Trusts Act 1960); or ‘‘(iv) a statutory supervisor (within the meaning of the Securities Act 1978); or ‘‘(v) a security registrar appointed by the issuer— of a security to which the investment money or investment property relates; and ‘‘(d) do not include a person who only transmits investment money or investment property to a person to whom paragraph (c) applies without being able to apply the money or property for any other purpose ‘‘investment brokers’ disclosure obligations means any of sections 41H to 41O and any regulations with which those sec­tions require compliance, and investment brokers’ obliga­tions means those sections and regulations and sections 41P and 41T ‘‘investment brokers service means the receipt of investment money or investment property by an investment broker ‘‘investment money and money, in relation to an investment broker, mean any money received from, or on account of, a member of the public in relation to acquiring or disposing of securities ‘‘investment property and property, in relation to an invest ­ment broker, mean security certi.cates or other valuable prop ­erty received from, or on account of, a member of the public in relation to acquiring or disposing of securities ‘‘listed, in relation to securities of a public issuer, means securities of the issuer that are approved for trading on the relevant registered exchange’s market (and, for the avoidance of doubt, securities do not cease to be listed merely because trading in those securities is suspended) ‘‘listing rules means the rules made by a securities exchange that relate to— ‘‘(a) the governance of the persons who are parties to listing agreements with the securities exchange; and ‘‘(b) the entry into, and revocation of, those listing agreements ‘‘market manipulation prohibition means either of sections 11 and 11B ‘‘material information has the meaning set out in section 3, in relation to a public issuer, and in section 3A, in relation to a futures contract ‘‘Minister means the Minister of the Crown who, under the authority of any warrant or with the authority of the Prime Minister, is for the time being responsible for the administra­tion of this Act ‘‘non-listed securities means securities that are not listed ‘‘of.cer, for the purposes of Part 2 in relation to a public issuer,— ‘‘(a) means a person, however designated, who is concerned or takes part in the management of the public issuer’s business; but ‘‘(b) excludes any class or classes of persons that are declared by regulations not to be of.cers for the pur­poses of this de.nition ‘‘operate, in relation to a securities market, includes control the operation of that market ‘‘prescribed means prescribed by regulations made under this Act ‘‘principal of.cer, in relation to a body corporate or other body, means— ‘‘(a) a director of the body; or ‘‘(b) a person in accordance with whose directions or instructions any or all of the directors of the body are accustomed to act (but a person is not a principal of.cer under this paragraph merely because the directors act on advice given by that person solely in a professional capacity) Struck out (unanimous) ‘‘product advertisement means a form of communication that— ‘‘(a) contains or refers to an offer of securities (as de.ned in section 4.2, and including derivatives) to the public for subscription, or is reasonably likely to induce persons to subscribe for those securities, being securities to which the communication relates and that have been, or are to be, offered to the public for subscription; and ‘‘(b) is authorised or instigated by, or on behalf of, an invest­ment adviser or prepared with the co-operation of, or by arrangement with, an investment adviser; and ‘‘(c) is to be, or has been, distributed to a person ‘‘product advertisement— ‘‘(a) means a form of communication that— ‘‘(i) contains or refers to an offer of securities (includ­ing derivatives) to the public for subscription, or is reasonably likely to induce persons to sub­scribe for those securities, being securities to which the communication relates and that have been, or are to be, offered to the public for sub­scription; and ‘‘(ii) is authorised or instigated by, or on behalf of, an investment adviser or prepared with the co­operation of, or by arrangement with, an invest­ment adviser; and ‘‘(iii) is to be, or has been, distributed to a person; but ‘‘(b) does not include a prospectus or an advertisement as de.ned in sections 2(1) and 2A of the Securities Act 1978 respectively ‘‘public issuer means— ‘‘(a) a person who is a party to a listing agreement with a registered exchange: ‘‘(b) a person who was previously a party to a listing agree­ment with a registered exchange, in respect of any action or event or circumstance to which this Act applied while the person was a party to a listing agree­ment with a registered exchange New (unanimous) ‘‘registered bank has, in Part 3, the meaning set out in section 37(1) ‘‘registered exchange means,— ‘‘(a) a body corporate registered under section 36F: ‘‘(b) a body corporate that is treated as if it were registered as a registered exchange under section 36X(3): ‘‘(c) a subsidiary of a registered exchange if the subsidiary operates a securities market New (unanimous) ‘‘related has the meaning set out in section 5B(2) ‘‘relevant event means an event that results in a person hav­ing to disclose matters under sections 22 to 25 ‘‘relevant interest has the meaning set out in sections 5 to 5B ‘‘securities exchange means a body corporate that operates a securities market ‘‘securities market means a market, exchange, or other facil­ ity for trading securities ‘‘security— ‘‘(a) means— ‘‘(i) any interest in, or right to participate in, any capi­tal, assets, earnings, royalties, or other property of any person: ‘‘(ii) any interest in, or right to be paid, money that is, or is to be, deposited with, lent to, or otherwise owing by, any person (whether or not the interest or right is secured by a charge over any property): ‘‘(iii) any renewal or variation of the terms or condi­tions of any existing security; but Struck out (unanimous) ‘‘(b) has a modi.ed meaning in Part 1 (and in Part 5 when Part 5 is applied to a contravention of Part 1) under section 7; and ‘‘(c) has a more limited meaning in Part 4 under section 41A New (unanimous) ‘‘(b) in subpart 1 of Part 1, means a security (as de.ned in paragraph (a)) that has been allotted and is listed on a registered exchange’s market or approved for trading on an authorised futures exchange; but excludes a pre­viously allotted security to the extent that conduct in ‘‘subsidiary has the same meaning as in sections 5 and 6 of the Companies Act 1993 relation to that security is regulated by the Securities Act 1978; and ‘‘(c) in subpart 2 of Part 1, means a security (as de.ned in paragraph (a)); but excludes a security exempted from Part 2 of the Securities Act 1978 under any of paragraphs (b) to (h) of section 5(1) of that Act; and ‘‘(d) in both subparts 1 and 2 of Part 1, also means— ‘‘(i) any form of bene.cial interest in the security: ‘‘(ii) the power to exercise, or control the exercise of, any right to vote attached to the security: ‘‘(iii) the power to acquire or dispose of, or control the acquisition or disposition of, the security: ‘‘(iv) any power which may exist or arise at any time under any trust, agreement, arrangement, or understanding relating to the security to do any­ thing described in subparagraphs (i) to (iii); and ‘‘(e) in Part 4, means a security (as de.ned in paragraph (a)); but excludes— ‘‘(i) a security exempted from Part 2 of the Securities Act 1978 under any of paragraphs (b) to (h) of section 5(1) of that Act; and ‘‘(ii) a call debt security as de.ned in regulations made under that Act; and ‘‘(iii) a bank term deposit as de.ned in regulations made under this Act; and ‘‘(f) in Part 5 has, when applied in relation to a contravention of a provision, the same meaning as security has in that provision ‘‘substantial holding has the meaning set out in section 21 ‘‘substantial holding disclosure obligation means any of sections 22 to 27, and 34 to 35A and any regulations with which those sections require compliance ‘‘substantial security holder has the meaning set out in section 21 ‘‘Takeovers Act means the Takeovers Act 1993 New (unanimous) ‘‘trade, in subpart 1 of Part 1,— ‘‘(a) means acquire or dispose of; but ‘‘(b) does not include acquire, or dispose of, by inheritance or gift ‘‘trading day means a day during which securities are traded on a registered (exchange) exchange’s market ‘‘transacting shareholder has the same meaning as in section 4 of the Co-operative Companies Act 1996 ‘‘trustee corporation means Public Trust or the Maori Trus­tee or any corporation authorised by any Act to administer the estates of deceased persons and other trust estates ‘‘voting right, in subpart 1 of Part 2B, has the meaning set out in section 36S ‘‘voting security, in relation to a public issuer or other body,— ‘‘(a) means a security of the public issuer or body that con­ fers a right to vote at meetings of members or share­holders (whether or not there is any restriction or limita­tion on the number of votes that may be cast by or on behalf of the holder of the security); and ‘‘(b) includes a security that is convertible into a security of that kind; but ‘‘(c) excludes a security that confers only a right to vote that, under the conditions attached to the security, is exercis­able only in 1 or more of the following circumstances: ‘‘(i) during a period in which a dividend (or part of a dividend) in respect of the security is in arrears: ‘‘(ii) on a proposal to reduce the capital of the public issuer or body: ‘‘(iii) on a proposal that affects rights attached to the security: ‘‘(iv) on a proposal to put the public issuer or body into liquidation: ‘‘(v) on a proposal for the disposal of the whole of the property, business, and undertaking of the public issuer or body: ‘‘(vi) during the liquidation of the public issuer or body. ‘‘(2) For the purposes of this Act, unless the context otherwise requires, associated persons or persons associated with each other are— ‘‘(a) persons who are relatives within the meaning of the Income Tax Act (1994) 2004 or de facto partners (within the meaning of the Property (Relationships) Act 1976); or ‘‘(b) persons who are partners to whom the Partnership Act 1908 applies; or ‘‘(c) bodies corporate that consist substantially of the same shareholders or are under the control of the same per­sons; or ‘‘(d) a body corporate and a person who has the power, directly or indirectly, to exercise, or control the exercise of, the right to vote attached to 25% or more of the voting securities of the body corporate; or ‘‘(e) a body corporate and a person who is a director or principal of.cer of the body corporate. ‘‘(3) Any term or expression that is de.ned in the Securities Act 1978 and used, but not de.ned, in this Act has the same meaning as in the Securities Act 1978. New (unanimous) ‘‘(4) A term that is de.ned to have a meaning when used in a particular Part or provision of this Act has the same meaning when it is used in the de.nition of any other term used in that Part or provision. ‘‘3 What is material information in relation to public issuer For the purposes of this Act, unless the context otherwise requires, material information, in relation to a public issuer but not in relation to a futures contract ((see) referred to in section 3A()), is information that— ‘‘(a) a reasonable person would expect, if it were generally available to the market, to have a material effect on the price (or value) of listed securities ofthe public issuer; and ‘‘(b) relates to particular securities, a particular public issuer, or particular public issuers, rather than to securities generally or public issuers generally. Struck out (unanimous) ‘‘(2) For the purposes of subsection (1), a reasonable person would be taken to expect information to have a material effect on the price or value of listed securities of a public issuer if the information would, or would be likely to, in.uence persons who commonly invest in securities in deciding whether to acquire or dispose of those listed securities. ‘‘(3) For the avoidance of doubt, subsection (2) does not limit what information a reasonable person would expect to have that effect. ‘‘3A What is material information in relation to futures contract For the purposes of this Act, unless the context otherwise requires, material information in relation to a futures con­tract that is listed for trading on an authorised futures exchange is information that— ‘‘(a) a reasonable person would expect, if it were generally available to the market, to have a material effect on the value of the futures contract; and ‘‘(b) relates to the particular futures contract, rather than to futures contracts generally. Struck out (unanimous) ‘‘(2) For the purposes of subsection (1), a reasonable person would be taken to expect information to have a material effect on the value of a futures contract if the information would, or would be likely to, in.uence persons who commonly invest in futures contracts in deciding whether to acquire or dispose of the futures contract. ‘‘(3) For the avoidance of doubt, subsection (2) does not limit what information a reasonable person would expect to have that effect. ‘‘4 What information is generally available to the market ‘‘(1) For the purposes of this Act, unless the context otherwise requires, information is generally available to the market— ‘‘(a) if— ‘‘(i) it is information that has been made known in a manner that would, or would be likely to, bring it to the attention of persons who commonly invest in relevant securities; and ‘‘(ii) since it was made known, a reasonable period for it to be disseminated among those persons has expired; or ‘‘(b) if it is likely that persons who commonly invest in relevant securities can readily obtain the information (whether by observation, use of expertise, purchase from other persons, or any other means); or ‘‘(c) if it is information that consists of deductions, conclu­sions, or inferences made or drawn from either or both of the kinds of information referred to in paragraphs (a) and (b). ‘‘(2) In this section, relevant securities means securities of a kind the price (or value) of which might reasonably be expected to be affected bythe information. New (unanimous) ‘‘(3) Information that is noti.ed in accordance with a continuous disclosure obligation is generally available to the market under subsection (1)(a) immediately on it being made available to participants in a registered exchange’s market (without limiting how quickly the reasonable period of dissemination in subsection (1)(a)(ii) may be satis.ed in other cases). ‘‘(1) A person has a relevant interest in a security if the person— ‘‘(a) is a registered holder of the security; or ‘‘(b) is a bene.cial owner of the security; or ‘‘(c) has the power to exercise, or to control the exercise of, a right to vote attached to the security; or ‘‘(d) has the power to acquire or dispose of, or to control the acquisition or disposition of, the security. ‘‘(2) It does not matter whether the power or control is express or implied, direct or indirect, legally enforceable or not, related to a particular security or not, exercisable presently or in the future, or exercisable alone or jointly with another person or persons (but a power to cast merely 1 of many votes is not, in itself, a joint power of this kind). ‘‘(3) It also does not matter whether or not the power or control is or can be made subject to restraint or restriction or is exercisa­ble only on the ful.lment of a condition. ‘‘(4) If 2 or more persons can jointly exercise a power, each of them is taken to have that power. ‘‘5A Extension of basic rule to powers or controls exercisable through trust, agreement, (practice,) etc ‘‘(1) A person has a power or control referred to in section 5 if the power or control is, or may at any time be, exercised under, by virtue of, by means of, or as a result of a revocation or breach of, a trust, agreement, arrangement, (understanding, or prac­tice) or understanding (or any combination of them). ‘‘(2) It does not matter whether or not the trust, agreement, arrange­ment, (understanding, or practice) or understanding is legally enforceable or whether or not the person is a party to it. Struck out (unanimous) ‘‘(3) In this section, practice includes market practice and persons’ practices in dealing with each other. ‘‘5B Extension of basic rule to interests held by other persons under control or acting jointly ‘‘(1) A person (A) has the relevant interests in securities that another person (B) has if— ‘‘(a) B or B’s directors are accustomed or under an obliga­tion (whether legally enforceable or not) to act in accor­dance with A’s directions, instructions, or wishes in relation to a power or control referred to in section 5; or ‘‘(b) A has the power to exercise, or control the exercise of, the right to vote attached to 20% or more of the securi­ties of B; or ‘‘(c) A has the power to acquire or dispose of, or to control the acquisition or disposition of, 20% or more of the securities of B; or ‘‘(d) A and B are related bodies corporate; or ‘‘(e) A and B have an agreement, arrangement, or under­standing to act in concert in relation to a power or control referred to in section 5. ‘‘(2) For the purposes of this Act, a body corporate (A) is related to another body corporate (B) if— ‘‘(a) B is A’s holding company or subsidiary within the meaning of sections 5 and 6 of the Companies Act 1993; or ‘‘(b) more than half of A’s issued shares (other than shares that carry no right to participate beyond a speci.ed amount in a distribution of either pro.ts or capital) is held by B and bodies corporate related to B (whether directly or indirectly, but other than in a .duciary capa­city); or ‘‘(c) more than half of the issued shares (other than shares that carry no right to participate beyond a speci.ed amount in a distribution of either pro.ts or capital) of each of A and B is held by members of the other (whether directly or indirectly, but other than in a .du­ciary capacity); or ‘‘(d) the businesses of A and B have been so carried on that the separate business of each body corporate, or a sub­stantial part of that business, is not readily identi.able; or ‘‘(e) there is another body corporate to which A and B are both related. ‘‘6 Situations not giving rise to relevant interests ‘‘(1) A person (A) does not have a relevant interest in securities under sections 5 to 5B merely because— Part 1 cl 20 Securities Legislation ‘‘(a) the ordinary business of A consists of, or includes, the lending of money or the provision of .nancial services, or both, and A has the relevant interest only as security given for the purposes of a transaction entered into in the ordinary course of the business of A; or ‘‘(b) A is authorised to undertake trading activities on a registered exchange’s market and A acts for another person to acquire or dispose of those securities on behalf of that person in the ordinary course of A’s business of carrying out those trading activities; or ‘‘(c) A has been authorised by resolution of the directors or other governing body of a body corporate to act as its representative at a particular meeting of members, or class of members, of a public issuer, and a copy of the resolution is deposited with the public issuer before the meeting; or ‘‘(d) A is appointed as a proxy to vote at a particular meeting of members, or of a class of members, of the public issuer and the instrument of A’s appointment is depos­ ited with the public issuer before the meeting; or ‘‘(e) A is a bare trustee of a trust to which the security is subject; or ‘‘(f) A is a director of a body corporate and the body corpo­ rate has a relevant interest in the security; or New (unanimous) ‘‘(g) A is a member of a body corporate and the body corpo-rate’s constitution or section 45 of the Companies Act 1993 gives the member pre-emptive rights on the trans­fer of the security, if all members have pre-emptive rights on the same terms. ‘‘(2) Subsection (1)(a) to ((f)) (g) does not apply to a person if the person is currently designated by the Commission, by notice in the Gazette under section 48C, as a person that is not exempt under that paragraph. ‘‘(3) For the purposes of subsection (1)(e), a trustee may be a bare trustee even if he or she is entitled as a trustee to be remuner­ated out of the income or property of the trust.’’ 21 New Part 1 substituted The principal Act is amended by repealing Part 1, and substi­tuting the following Part: ‘‘Part 1 ‘‘Dealing misconduct ‘‘Subpart 1—Insider conduct and market manipulation prohibitions Struck out (unanimous) ‘‘7 Interpretation of certain terms used in this subpart In this subpart, unless the context otherwise requires,— ‘‘encourage includes incite, counsel, or procure ‘‘security— ‘‘(a) means a security (as de.ned in section 2(1)) that— ‘‘(i) has been allotted; and ‘‘(ii) is listed on a registered exchange’s market or approved for trading on an authorised futures exchange; and ‘‘(b) means also, in relation to a security of that kind,— ‘‘(i) any form of bene.cial interest in the security: ‘‘(ii) the power to exercise any right to vote attached to the security: ‘‘(iii) the power to control the exercise of any right to vote attached to the security: ‘‘(iv) the power to acquire or dispose of the security: ‘‘(v) the power to control the acquisition or disposition of the security by any person: ‘‘(vi) any power which may exist or arise at any time under any trust, agreement, arrangement, or understanding relating to the security to— ‘‘(A) exercise the right to vote attached to the security; or ‘‘(B) control the exercise of the right to vote attached to the security; or ‘‘(C) acquire or dispose of the security; or ‘‘(D) control the acquisition or disposition of the security by any person; and ‘‘(c) does not include a previously allotted security offered to the public in accordance with section 6 of the Securi­ties Act 1978 ‘‘trade— ‘‘(a) means acquire or dispose of; but ‘‘(b) does not include acquire, or dispose of, by inheritance or gift. ‘‘Insider conduct prohibited ‘‘8 Prohibition of insider conduct A person must not do any of the things set out in sections 8C to 8E if that person is an information insider of the public issuer. ‘‘8A Who is information insider ‘‘(1) A person is an information insider of a public issuer if that person— ‘‘(a) has material information relating to the public issuer that is not generally available to the market; and ‘‘(b) knows or ought reasonably to know that the information is material information; and ‘‘(c) knows or ought reasonably to know that the information is not generally available to the market. ‘‘(2) A public issuer may be an information insider of itself. ‘‘8B Meaning of inside information In this subpart, inside information means the information in respect of which a person is an information insider of the public issuer in question. ‘‘8C Information insider must not trade An information insider of a public issuer must not trade secur­ities of the public issuer. ‘‘8D Information insider must not disclose inside information An information insider (A) of a public issuer must not directly or indirectly disclose inside information to another person (B) if A knows or ought reasonably to know or believes that B will, or is likely to,— ‘‘(a) trade securities of the public issuer; or ‘‘(b) if B is already a holder of those securities, continue to hold them; or ‘‘(c) advise or encourage another person (C) to trade or hold them. ‘‘8E Information insider must not advise or encourage trading An information insider (A) of a public issuer must not— ‘‘(a) advise or encourage another person (B) to trade or hold securities of the public issuer: ‘‘(b) advise or encourage B to advise or encourage another person (C) to trade or hold those securities. ‘‘8F Criminal liability for insider conduct A person who contravenes any of sections 8C to 8E commits an offence (see section 43 for the maximum penalty of 5 years’ imprisonment and a $300,000 .ne for an individual or a $1,000,000 .ne for a body corporate) if the person has actual knowledge— ‘‘(a) that the information is material information; and ‘‘(b) that the information is not generally available to the market; and ‘‘(c) in the case of a contravention of section 8D, of any of the matters set out in section 8D(a) to (c). ‘‘When prohibition on insider conduct does not apply ‘‘9 Exception for trading required by enactment Section 8C does not apply to trading in securities that is required by an enactment. ‘‘9A Exception for disclosure required by enactment Section 8D does not apply to disclosure that is required by an enactment. ‘‘9B Exceptions in respect of underwriting agreements ‘‘(1) Section 8C does not apply to (a person who acquires) the acquisition of the securities of a public issuer under an under­writing or sub-underwriting agreement. ‘‘(3) Section 8E does not apply if the advice or encouragement is given for the sole purpose of persuading the person to whom it is given to enter into an underwriting or sub-underwriting agreement in respect of the securities in question. ‘‘9C Exception in case of knowledge of person’s own intentions or activities ‘‘(1) A person (A) does not contravene section 8C merely because A trades the securities with the knowledge that A proposes to enter into, or has previously entered into, 1 or more transac­tions or agreements in relation to the securities or the public issuer. ‘‘(2) A person (B), who is an of.cer or agent of A acting on A’s behalf in trading the securities, does not contravene section 8C merely because B knows that A proposes to enter into, or has previously entered into, 1 or more transactions or agreements in relation to the securities or the public issuer, if B acquired that knowledge in the performance of B’s duties as an of.cer of A or in the course of acting as A’s agent. ‘‘9D Exception for agent executing trading instruction only Section 8C does not apply in the case of a person (A) if— ‘‘(a) in trading the securities A was acting on behalf of another person (B); and ‘‘(b) A traded the securities on B’s speci.c instruction; and ‘‘(c) before trading, A did not disclose inside information to B; and ‘‘(d) A did not advise or encourage B to instruct A to trade. Struck out (unanimous) ‘‘9E Exceptions for takeovers ‘‘(1) Section 8C does not apply to an acquisition of securities that results from a takeover offer made by an information insider under any takeovers code that is in force under the Takeovers Act 1993. ‘‘(2) Sections 8D and 8E do not apply if the inside information is disclosed, or the advice or encouragement given, as part of a takeover offer made by an information insider under any takeovers code that is in force under the Takeovers Act 1993. New (unanimous) ‘‘9E Exceptions for takeovers ‘‘(1) Section 8C does not apply to— ‘‘(a) trading that results from a takeover offer under the takeovers code; or ‘‘(b) trading in compliance with regulations made under section 49D(1)(b); or ‘‘(c) the acquisition of securities in performance of an agree­ment to acquire those securities at a .xed price under a future takeover offer that complies with the takeovers code. ‘‘(2) Section 8D does not apply to the following conduct: ‘‘(a) subject to the conditions in subsection (3), disclosure of inside information to a prospective offeror under a pro­spective takeover offer under the takeovers code: ‘‘(b) subject to the conditions in subsection (3), disclosure of inside information to encourage competing bona .de offers to be made in competition with a takeover offer under the takeovers code: ‘‘(c) subject to the conditions in subsection (3), disclosure of inside information by a prospective offeror under a prospective takeover offer under the takeovers code for the purpose of forming a consortium to make a takeover offer: ‘‘(d) disclosure of inside information to an independent adviser to enable that adviser to make a report required by the takeovers code. ‘‘(3) The conditions referred to in subsection (2) are— ‘‘(a) the recipient of the information is bound by a con.den­tiality agreement in respect of the information; and ‘‘(b) the purpose of the conduct is to enable or encourage the recipient to make a takeover offer or to participate in a takeover offer. ‘‘(4) Section 8E does not apply to advice or encouragement— ‘‘(a) by the directors of a company that is the target company under a takeover offer under the takeovers code, to the extent that the advice or encouragement is given to the company’s shareholders and relates to trading or hold­ing their securities; or ‘‘(b) by a prospective offeror under a prospective takeover offer under the takeovers code for the purpose of form­ing a consortium to make a takeover offer. ‘‘9F Exception for redemption of units in unit trust Section 8C does not apply to the redemption of units in a unit trust if the redemption price for each unit is calculated by reference to the underlying value of the assets of the .nancial business or undertaking of the scheme. ‘‘9G Exception for Reserve Bank Section 8C does not apply to trading by the Reserve Bank of New Zealand in securities issued by the Reserve Bank of New Zealand or by the Crown. ‘‘Af.rmative defences ‘‘10 Absence of knowledge of trading In any proceeding against a person (A) for contravention of section 8C, it is a defence if A proves on a balance of probabilities that A did not know, and could not reasonably be expected to know, that A traded the securities. ‘‘10A Inside information obtained by independent research and analysis ‘‘(1) In any proceeding against a person (A) for contravention of section 8C or section 8D, it is a defence if A proves on a balance of probabilities that the inside information was obtained by research and analysis, and was not obtained directly or indi­rectly from the public issuer concerned. ‘‘(1A) In any proceeding against a person (A) for contravention of section 8E, it is a defence if A proves on a balance of probabilities that A encouraged or advised on the basis of inside information obtained by research and analysis, and not obtained directly or indirectly from the public issuer concerned. ‘‘(2) In (subsection (1)) subsections (1) and (1A), research means planned investigation undertaken to gain new knowledge and understanding. ‘‘10B Equal information ‘‘(1) In any proceeding against a person (A) for contravention of section 8C, it is a defence if A proves on a balance of probabilities that the opposite party to the transaction knew, or ought reasonably to have known, the same inside information as A before entering into the transaction. ‘‘(2) In any proceeding against a person (A) for contravention of section 8D, (in a case where the securities of the public issuer have been traded as a result of A’s disclosure of inside infor­mation to B,) it is a defence if A proves on a balance of probabilities that the (opposite party to the transaction knew, or ought reasonably to have known, the same inside informa­tion as A before entering into the transaction) other person knew, or ought reasonably to have known, the same inside information as A before it was disclosed. ‘‘10C Options and trading plans ‘‘(1) In any proceeding against a person (A) for contravention of section 8C, it is a defence if A proves on a balance of probabilities that— ‘‘(a) A traded the securities under a .xed trading plan or (by exercise of .xed price delivery options) under options with a .xed exercise price; and ‘‘(b) A entered into the trading plan, or acquired the options, as the case may be,— ‘‘(i) before A obtained the inside information; and ‘‘(ii) without any intent to evade section 8C. that period; and ‘‘(c) is not subject to any in.uence by the investor as to trading decisions after the plan has begun. ‘‘10D Chinese wall defence ‘‘(1) In any proceeding against a person (A) for contravention of any of sections 8C to 8E, it is a defence if A proves on a balance of probabilities that— ‘‘(a) arrangements existed that could reasonably be expected to ensure that no individual who took part in the active decision received, or had access to, the inside informa­tion or was in.uenced, in relation to that decision, by an individual who had the information; and ‘‘(b) no individual who took part in the active decision received, or had access to, the inside information or was in.uenced, in relation to that decision, by an individual who had the information; and ‘‘(c) every individual who had the information and every individual who took part in the active decision acted in accordance with the arrangements referred to in para­graph (a). ‘‘(2) In subsection (1), active decision means the decision to trade the securities or disclose the inside information or advise or encourage, as the case may be. ‘‘Market manipulation ‘‘11 False or misleading statement or information A person must not make a statement or disseminate informa­tion if— ‘‘(a) a material aspect of the statement or information is false or the statement or information is materially mislead­ing; and ‘‘(b) the person knows or ought reasonably to know that a material aspect of the statement or information is false or that the statement or information is materially mis­leading; and ‘‘(c) the statement or information is likely to— ‘‘(i) induce a person to trade in the securities of a public issuer; or ‘‘(ii) have the effect of increasing, reducing, maintain­ing, or stabilising the price for trading in those securities. ‘‘11A Criminal liability for false or misleading statement or information A person who contravenes section 11 commits an offence (see section 43 for the maximum penalty of 5 years’ imprisonment and a $300,000 .ne for an individual or a $1,000,000 .ne for a body corporate) if the person has actual knowledge that the statement or information is false in a material aspect or is materially misleading. ‘‘11B False or misleading appearance of trading, etc A person must not do, or omit to do, anything if— ‘‘(a) the act or omission will have, or is likely to have, the effect of creating, or causing the creation of, a false or misleading appearance— ‘‘(i) with respect to the extent of active trading in the securities of a public issuer; or ‘‘(ii) with respect to the supply of, demand for, price for trading in, or value of those securities; and ‘‘(b) the person knows or ought reasonably to know that the person’s act or omission will, or is likely to have, that effect. ‘‘11C Presumption as to false or misleading appearance of trading, etc ‘‘(1) A person (A) is presumed to contravene section 11B if A is directly or indirectly a party to trading in the securities of a public issuer from which no change in bene.cial ownership results. ‘‘(2) A person (A) is also presumed to contravene section 11B if— ‘‘(a) A has made an offer to trade the securities of a public issuer; and ‘‘(b) either A or, to A’s knowledge, A’s associate, has made or proposes to make an (offer (the corresponding offer)) opposite offer (the opposite offer) to trade (the) securities of the public issuer; and ‘‘(c) the (corresponding) opposite offer substantially matches A’s offer as to the number and price of the securities. ‘‘(3) There is no presumption under subsection (1) or subsection (2), and it is a defence in any proceeding against A for contraven­tion of section 11B, if A proves, on a balance of probabilities, that the trading in securities occurred, or the offer to trade was made, for a legitimate reason. ‘‘(4) There is no presumption under subsection (1), and it is a defence in any proceeding against A for contravention of section 11B, if A proves, on a balance of probabilities, that— ‘‘(a) in trading the securities A was acting on behalf of another person; and ‘‘(b) A did not know, and ought not reasonably to have known, when trading the securities that no change in bene.cial ownership would result. ‘‘11D Criminal liability for false or misleading appearance of trading, etc A person who contravenes section 11B commits an offence (see section 43 for the maximum penalty of 5 years’ imprisonment and a $300,000 .ne for an individual or a $1,000,000 .ne for a body corporate) if the person has actual knowledge that the act or omission will have, or is likely to have, the effect of creating, or causing the creation of, a false or misleading appearance— ‘‘(a) with respect to the extent of active trading in the securi­ ties of a public issuer; or ‘‘(b) with respect to the supply of, demand for, price for trading in, or value of those securities. ‘‘Subpart 2—General dealing misconduct prohibition Struck out (unanimous) ‘‘Interpretation ‘‘12 Meaning of terms used in general dealing misconduct prohibition In this subpart,— ‘‘dealings in securities— ‘‘(a) means, in relation to the securities of a public issuer, any of the following steps: ‘‘(i) acquiring or disposing of securities; or ‘‘(ii) offering securities for subscription and issuing and allotting securities; or ‘‘(iii) underwriting securities; or ‘‘(iv) anything that is preparatory to, or related to, any dealings in securities (for example, giving invest­ment advice) unless an exception applies to those dealings under this subpart; and ‘‘(b) means, in relation to securities that are not listed on a registered exchange, any of the steps referred to in paragraph (a) taken in the course of business; but ‘‘(c) excludes any dealings exempted by regulations made under section 49D ‘‘engaging in conduct means doing or refusing to do an act, and includes,— ‘‘(a) omitting to do an act; or ‘‘(b) making it known that an act will or will not be done ‘‘security— ‘‘(a) means a security as de.ned in section 2(1) other than a security exempted from Part II of the Securities Act 1978 under any of paragraphs (b) to (f) and (h) of section 5(1) of that Act; and ‘‘(b) means also, in relation to a security as de.ned in para­graph (a),— ‘‘(i) any form of bene.cial interest in the security: ‘‘(ii) the power to exercise any right to vote attached to the security: ‘‘(iii) the power to control the exercise of any right to vote attached to the security: ‘‘(iv) the power to acquire or dispose of the security: ‘‘(v) the power to control the acquisition or disposition of the security by any person: ‘‘(vi) any power which may exist or arise at any time under any trust, agreement, arrangement, or understanding relating to the security to— ‘‘(A) exercise the right to vote attached to the security; or ‘‘(B) control the exercise of the right to vote attached to the security; or ‘‘(C) acquire or dispose of the security; or ‘‘(D) control the acquisition or disposition of the security by any person. ‘‘General dealing misconduct prohibition ‘‘13 Misleading or deceptive conduct generally (for dealings in listed and non-listed securities) ‘‘(1) A person must not engage in conduct, in relation to any dealings in securities, that is misleading or deceptive or likely to mislead or deceive. ‘‘(2) To make the position clear, this section applies more broadly than the rest of this Part and so applies to securities whether listed or non-listed and to all dealings in securities (not only trading). Struck out (unanimous) ‘‘13A Defences that may be raised in proceeding for contravention of section 13 ‘‘(1) In any proceeding against a person (A) for contravention of section 13, it is a defence if the defendant proves on a balance of probabilities— ‘‘(a) that the contravention was due to a reasonable mistake; or ‘‘(b) that the contravention was due to reasonable reliance on information supplied by another person; or ‘‘(c) that— ‘‘(i) the contravention was due to the act or default of another person to an accident or to some other cause beyond the defendant’s control; and ‘‘(ii) the defendant took reasonable precautions and exercised due diligence to avoid the contravention. ‘‘(2) However, this defence does not prevent the Commission from making a prohibition or corrective order under section 42B or a disclosure order under section 42D, or the Court from granting ‘‘(3) In subsection (1), another person does not include— ‘‘(a) an employee or agent of the defendant; or ‘‘(b) if the defendant is a body corporate, a director, employee, or agent of the defendant. ‘‘13B Defendant must give notice of identity of third party ‘‘(1) A defendant cannot rely on a defence under section 13A that the contravention was due to reasonable reliance on information supplied by another person or was due to the act or default of another person unless the defendant has .rst served notice identifying that other person on the party or parties bringing the proceeding. ‘‘(2) The defendant must serve the notice not later than 7 clear days before the hearing of the proceeding begins. ‘‘(3) However, the Court may allow the defendant to rely on a defence speci.ed in subsection (1) even if the defendant has not complied with subsection (1) or subsection (2) or both. ‘‘Exceptions ‘‘14 Exceptions for takeovers ‘‘(1) Sections 11 and 13 do not apply to conduct in relation to a takeover offer for securities under (a takeovers code that is in force under the Takeovers Act 1993) the takeovers code or to conduct in relation to the acquisition of securities under that offer to the extent that the conduct is regulated by the code or the (Act) Takeovers Act. ‘‘(2) For the purposes of subsection (1), conduct in relation to a takeover offer means conduct following the public announcement by a person of an intention to make the offer, whether or not the offer has already begun and whether or not the offer proceeds. ‘‘15 Exception for repurchase of shares by company Section 13 does not apply to conduct in relation to the acquisi­tion or redemption by a company of its shares under the ‘‘16 Exception for offers of securities to public Section 13 does not apply to conduct in relation to an offer of securities to the public for subscription under the Securities Act 1978 or to conduct in relation to the issue or allotment of those securities to the extent that the conduct is regulated by that Act. ‘‘17 Exception for disclosure by investment advisers or brokers Section 13 does not apply to conduct in relation to a disclosure under Part 4 or to conduct in relation to an advice advertise­ment, a broker advertisement, or a product advertisement to the extent that that conduct is regulated by Part 4. ‘‘Territorial scope ‘‘18 Territorial scope of general dealing misconduct prohibition Section 13 applies to— ‘‘(a) conduct in New Zealand; and ‘‘(b) conduct outside New Zealand by any person resident, incorporated, or carrying on business in New Zealand to the extent that that conduct relates to dealings in securi­ties that occur (in part or otherwise) within New Zealand. Struck out (unanimous) ‘‘Fair Trading Act 1986 excluded ‘‘19 Fair Trading Act 1986 does not apply to conduct regulated by sections 11 to 11D and 13 of this Act Nothing in the Fair Trading Act 1986 applies to conduct to the extent that it is regulated by sections 11 to 11D and 13 of this Act. ‘‘Liability under Fair Trading Act 1986 ‘‘19 No liability under Fair Trading Act 1986 if not liable under this Part A court hearing a proceeding brought against a person under the Fair Trading Act 1986 must not .nd that person liable for conduct that is regulated by this Part if that person would not be liable for that conduct under this Part.’’ Amendments to disclosure of relevant interests by directors and of.cers of public issuers 22 New section 19SA inserted The principal Act is amended by inserting, above section 19T, the following section: ‘‘19SA Purpose of subpart The purpose of this subpart is to promote good corporate governance, and to deter and assist in the monitoring of insider conduct and market manipulation, by— ‘‘(a) ensuring that information about directors’ and of.cers’ trading activities in public issuers is available to partici­pants in New Zealand’s securities markets; and ‘‘(b) enabling the dates of trades to be checked against the dates at which material information became generally available to the market.’’ 23 Public issuer must keep interests register Section 19Z of the principal Act is amended by repealing subsection (2), and substituting the following subsections: ‘‘(2) The interests register must be kept at— ‘‘(a) the registered of.ce of the public issuer; or ‘‘(b) any other place in New Zealand, of which notice is given in accordance with subsection (2A). ‘‘(2A) If the interests register is not kept at the public issuer’s registered of.ce, or the place at which it is kept is changed, the public issuer must give written notice to the Registrar of Companies of the place at which it is kept within 10 working days of its .rst being kept elsewhere or of its being moved.’’ 71 24 Inspection and copying of interests register Section 19ZA of the principal Act is amended by repealing subsection (4), and substituting the following subsection: ‘‘(4) A person may require a copy of, or extract from, an interests register to be sent to that person— ‘‘(a) within 5 working days after the person has made a request in writing for the copy or extract; and ‘‘(b) if the person has paid a reasonable copy and administra­ tion fee determined by the public issuer.’’ 25 New section 19ZF substituted The principal Act is amended by repealing section 19ZF, and substituting the following section: ‘‘19ZF Offences relating to interests register ‘‘(1) A person who fails, without reasonable excuse, to comply with section 19Z(1) or (2) commits an offence (see section 43A for the maximum penalty of a $10,000 .ne). ‘‘(2) If a person fails, without reasonable excuse, to provide a copy of, or extract from, an interests register in accordance with a request under section 19ZA, the person commits an offence (see section 43A for the maximum penalty of a $10,000 .ne).’’ Amendments to disclosure of interests of substantial security holders in public issuers 26 New subpart 3 of Part 2 substituted Part 2 of the principal Act is amended by repealing subpart 3, and substituting the following subpart: ‘‘Subpart 3—Disclosure of interests of substantial security holders in public issuers ‘‘20 Purpose of subpart The purpose of this subpart is to promote an informed market, and to deter insider conduct, market manipulation, and secret dealings in potential takeover bids, by ensuring that partici­pants in New Zealand’s securities markets have access to information concerning the identity and trading activities of persons who are, or may at any time be, entitled to control or in.uence the exercise of signi.cant voting rights in a public issuer. 72 ‘‘21 Meaning of substantial security holder, substantial holdings, and percentage ‘‘(1) A person is a substantial security holder in a public issuer for the purposes of this Act if that person has a substantial holding in that public issuer. ‘‘(2) A person has a substantial holding in a public issuer for the purposes of this Act if that person has a relevant interest in listed voting securities that comprise 5% or more of a class of listed voting securities of the public issuer. ‘‘(3) A person has a separate substantial holding for the purposes of this Act for each class in respect of which the person has a substantial holding under subsection (2). ‘‘(4) The percentage of securities that a person has in a class, for the purposes of this subpart, is calculated as follows: number held ( total )× 100 if— number held is the number of securities, in that class, in which the person has a relevant interest total is the total number of securities in that class. ‘‘Event disclosure obligations ‘‘22 Persons must disclose if begin to have substantial holding ‘‘(1) A person who begins to have a substantial holding (or another substantial holding for another class) in a public issuer must disclose that fact in accordance with sections 26 and 27. ‘‘(2) The disclosure must be given as soon as the person knows, or ought to know, that the person has the substantial holding. ‘‘23 Substantial security holders must disclose if subsequent movement of 1% in holdings ‘‘(1) A substantial security holder in a public issuer must disclose, in accordance with sections 26 and 27, any movement of 1% or more in the substantial holding. ‘‘(2) There is a movement of 1% or more in a substantial holding if the percentage worked out using the formula in section 21(4) increases or decreases by 1 or more percentage points from the percentage last disclosed under this subpart in relation to the substantial holding. New (unanimous) ‘‘(2) There is a movement of 1% or more in a substantial holding if— ‘‘(a) there is a change in the number of securities held by the substantial security holder (where number held has the same meaning as in section 21(4)); and ‘‘(b) the percentage worked out using the formula in section 21(4) increases or decreases by 1 or more percentage points from the percentage last disclosed under this subpart in relation to the substantial holding. ‘‘(3) The disclosure must be given as soon as the person knows, or ought to know, that that movement has occurred. ‘‘24 Substantial security holders must disclose if subsequent changes in nature of relevant interests ‘‘(1) A substantial security holder in a public issuer must disclose, in accordance with sections 26 and 27, any change in the nature of any relevant interest in the substantial holding. ‘‘(2) The disclosure must be given as soon as the person knows, or ought to know, of the change. ‘‘25 Persons must disclose if cease to have substantial holding ‘‘(1) A person who ceases to have a substantial holding (or any of the person’s substantial holdings) in a public issuer must disclose that fact in accordance with sections 26 and 27. ‘‘(2) The disclosure must be given as soon as the person knows, or ought to know, that the person has ceased to have a substantial holding. 74 Securities Legislation Part 1 cl 26 ‘‘26 What disclosure required ‘‘(1) A person must disclose the matters required to be disclosed under any of sections 22 to 25 or section 34 to— ‘‘(a) the public issuer; and ‘‘(b) every registered exchange by which the securities of the public issuer are listed. ‘‘(2) The person must also disclose, as required by regulations made under section 49A, any further matters relating to that matter, the relevant event, or the substantial holding that are required by those regulations. ‘‘(3) The disclosure must also be accompanied by, or have annexed, anything required by regulations made under section 49A. ‘‘27 Form and method of disclosure The person must give the disclosure in accordance with any regulations made under section 49A (which may govern the form and method of the disclosure). ‘‘28 Public issuer must give acknowledgment of disclosure Every public issuer must, at the request of a person by whom disclosure is given to it under this subpart, give to that person an acknowledgment of the disclosure in the manner required by regulations made under section 49A. ‘‘29 How to ascertain total voting securities in class of public issuer’s voting securities for purposes of disclosure ‘‘(1) For the purposes of this subpart, a person may assume that the total number of securities of a public issuer in a class most recently published by the following methods is correct: ‘‘(a) in a document published by a public issuer and distrib­ uted to the holders of that class of securities; or ‘‘(b) on a website maintained by the relevant registered exchange. ‘‘(2) Subsection (1) does not apply if that person knows that number is not correct. 75 ‘‘30 Exemption for persons with interest in other substantial security holders who comply A person (A) need not comply with any of sections 22 to 25 in relation to a substantial holding in a public issuer if— ‘‘(a) another person (B) is required to comply, and does comply, with that section in relation to the same public issuer; and ‘‘(b) A has that substantial holding merely for 1 or more of the following reasons: ‘‘(i) A has a power to exercise, or control the exercise of, the right to vote attached to 20% or more of the securities of B (see section 5B(1)(b)): ‘‘(ii) A has a power to acquire or dispose of, or control the acquisition or disposition of, 20% or more of the securities of B (see section 5B(1)(c)): ‘‘(iii) A and B are related bodies corporate (see section 5B(1)(d)). ‘‘31 Exemption for trustee corporations and nominee companies ‘‘(1) A person (A) need not comply with any of sections 22 to 25 in relation to a substantial holding in (a public issuer) 1 or more public issuers if— ‘‘(a) A has that substantial holding merely because A acts for another person in the ordinary course of business as a trustee corporation or a nominee company; and ‘‘(b) A has opted in to this exemption by written notice to the Commission (and not withdrawn the notice by further written notice to the Commission). Struck out (unanimous) ‘‘(c) A is not currently designated by the Commission, by notice in the Gazette under section 48C, as a person that is not exempt under this section. New (unanimous) ‘‘(2) Subsection (1) does not apply if A is currently designated by the Commission, by notice in the Gazette under section 48C, as a person that is not exempt under this section. ‘‘(1) A person (A) to whom section 31 applies must— ‘‘(a) keep under continuing review the transactions of all persons for whom A holds listed voting securities in A’s name; and ‘‘(b) inform the public issuer of the securities and the regis­tered exchange by which those securities are listed if section 22 or section 25 applies to any of those persons; and ‘‘(c) inform that registered exchange if it exercises, or pro­poses to exercise, in its own right any voting rights in respect of 5% or more of a class of listed voting securi­ties of a public issuer. ‘‘(2) Every person who, without reasonable excuse, fails to comply with subsection (1) commits an offence (see section 43A for the maximum penalty of a $10,000 .ne). New (unanimous) ‘‘32A Exemption for persons under control or acting jointly with trustee corporations and nominee companies ‘‘(1) A person (A) need not comply with any of sections 22 to 25 in relation to a substantial holding in 1 or more public issuers if A has that substantial holding merely because A has, under section 5B, the relevant interests in securities that a trustee corporation or a nominee company that is exempt in relation to that substantial holding under section 31 has. ‘‘(2) Subsection (1) does not apply if A is currently designated by the Commission, by notice in the Gazette under section 48C, as a person that is not exempt under this section. ‘‘33 Extended time for disclosure for trustees, executors, and administrators If a person is required to comply with sections 22, 23, or 25 merely because the person is the trustee of a testamentary trust or the executor or administrator of the estate of a deceased person,— ‘‘(a) the time limit for disclosure in that section does not apply; and ‘‘(b) the disclosure must instead be given before the expiry of 14 days after the grant of administration under the Administration Act 1969. ‘‘Required disclosure obligations ‘‘34 Commission may require persons to disclose to market relevant interests and powers to get relevant interests ‘‘(1) The Commission may, by written notice given after having regard to the purpose of this subpart, require a person to disclose all (or any class of)— ‘‘(a) relevant interests that the person has in securities of the public issuer; or ‘‘(b) powers that the person has or may at any time have to acquire a relevant interest in securities of the public issuer. ‘‘(2) It does not matter whether the securities referred to in sub­section (1)(a) and (b) are voting securities or not, listed or non-listed, or issued or yet to be issued. ‘‘(3) The person must disclose the information required under sub­section (1) in accordance with sections 26 and 27 as soon as the person receives the notice. ‘‘(4) Whether or not a person has a power referred to in subsection (1) must be determined in the same way as sections 5 to 5B deter­mine whether or not a person has a relevant interest (and for this purpose every reference in those sections to a relevant interest must be read as including a reference to a power to acquire a relevant interest). ‘‘35 Public issuer may require registered holder to disclose relevant interests to it ‘‘(1) A public issuer may, by written notice, require a person who is registered as the holder of listed voting securities in that public issuer to disclose— ‘‘(a) the name and address of every person who has a rele­vant interest in those listed voting securities and the nature of that interest; and ‘‘(b) to the extent that that registered holder is unable to supply any of that information in relation to a person having a relevant interest in those listed voting securi­ties, other particulars that will, or are likely to, assist in identifying that person and the nature of that interest. ‘‘(2) That registered holder must disclose that information in writ­ing to the public issuer as soon as the holder receives the notice. ‘‘35A Public issuer may require person who has relevant interest to disclose information to it ‘‘(1) A public issuer may, by written notice, require a person who the public issuer believes has, or may have, a relevant interest in listed voting securities in that public issuer to disclose the information the public issuer speci.es for the purpose of assisting the public issuer to ascertain who is, or may be, a substantial security holder in the public issuer. ‘‘(2) That relevant interest holder must disclose that information in writing to the public issuer as soon as the holder receives the notice. ‘‘35B Form and method of notice requiring disclosure The notice requiring disclosure under section 34, 35, or 35A must be given in accordance with the regulations (if any) made under section 49A (which may govern the form and method in which the notice must be given). New (unanimous) ‘‘Offence ‘‘35BA Offence for failure to comply with substantial holding disclosure obligation Every person who is aware or ought reasonably to be aware of information that the person is required to disclose under any of sections 22 to 25 and 34 to 35A, and who fails to disclose that information in accordance with a substantial holding disclo­sure obligation, commits an offence (see section 43A for the maximum penalty of a $30,000 .ne). ‘‘(1) The public issuer must keep a register for the disclosures given to it under this subpart (and must include a disclosure in the register on receiving it). New (unanimous) ‘‘(1A) Subsection (1) does not apply to disclosures made under section 35 or section 35A which do not reveal a substantial holding. ‘‘(2) The disclosures must be kept in the register in alphabetical order and with a chronological index. ‘‘(3) The register must be kept at— ‘‘(a) the registered of.ce of the public issuer; or ‘‘(b) any other place in New Zealand, of which notice is given in accordance with subsection (4). ‘‘(4) If the register is not kept at the public issuer’s registered of.ce, or the place at which it is kept is changed, the public issuer must give written notice to the Registrar of Companies of the place at which it is kept within 10 working days of its .rst being kept elsewhere or its being moved. ‘‘(5) This section and section 35D do not derogate from the Compa­nies Act 1993 or any other enactment. ‘‘35D Inspection and copying of substantial holdings register ‘‘(1) The register required under section 35C must be kept open for inspection by any person. ‘‘(2) The register must be open for inspection between the hours of 9 am and 5 pm on each working day during the inspection period. ‘‘(3) In subsection (2), inspection period means the period com­mencing on the third working day after the day on which notice of intention to inspect is served on the public issuer by the person concerned and ending with the eighth working day after the day of service. ‘‘(4) A person may require a copy of, or extract from, a register to be sent to that person— ‘‘(a) within 5 working days after the person has made a request in writing for the copy or extract; and ‘‘(b) if the person has paid a reasonable copy and administra­tion fee determined by the public issuer. ‘‘35E Offences relating to substantial holdings register ‘‘(1) Every person who, without reasonable excuse, fails to comply with a requirement of section 35C or section 35D commits an offence (see section 43A for the maximum penalty of a $10,000 .ne). ‘‘(2) If a person fails, without reasonable excuse, to provide a copy of, or extract from, the register kept under section 35C in accor­dance with a request under section 35D, the person commits an offence (see section 43A for the maximum penalty of a $10,000 .ne). ‘‘35F Public issuers must publish information on substantial holdings ‘‘(1) Every public issuer must, in accordance with this section, send out a notice stating— ‘‘(a) the names of all persons who, according to the register kept under section 35C, are substantial security holders in the public issuer, at the record date; and ‘‘(b) the number and class of listed voting securities of the public issuer that, according to the register, form part of each substantial holding in the public issuer at the record date; and ‘‘(c) the total number in each class of the public issuer’s listed voting securities at the record date. ‘‘(2) The notice must be sent— ‘‘(a) for public issuers that are companies (other than over­seas companies within the meaning of the Companies Act 1993), to each shareholder with or in— ‘‘(i) the annual report sent under section 209 of the Companies Act 1993; or ‘‘(ii) if the shareholder has elected not to receive an annual report, the .nancial statements or sum­mary .nancial statements sent under section 210 of that Act; and ‘‘(b) for every other public issuer, to every holder of its listed voting securities not later than 30 June in each year. ‘‘35G Registered exchange must publish disclosures A registered exchange must— ‘‘(a) notify each disclosure given to it under this subpart to the registered exchange’s market as soon as practicable after receiving it; and ‘‘(b) publish that disclosure on its website soon after notify­ing it to the registered exchange’s market. ‘‘35H Offence for failing to publish information on substantial holdings or disclosures ‘‘(1) A public issuer who, without reasonable excuse, fails to com­ply with a requirement of section 35F commits an offence (see section 43A for the maximum penalty of a $10,000 .ne). ‘‘(2) A registered exchange who, without reasonable excuse, fails to comply with a requirement of section 35G commits an offence (see section 43A for the maximum penalty of a $10,000 .ne). ‘‘35I No liability for publication of substantial holdings (or disclosures) No public issuer is liable for any false or misleading informa­tion published under section 35F if the information was derived by the issuer under this subpart and the issuer did not know that the information was false or misleading. ‘‘35J Notice under this subpart not to affect incorporation of public issuer or constitute notice of trust ‘‘(1) Nothing in, or done under, this subpart— ‘‘(a) affects the incorporation of a public issuer; or ‘‘(b) limits section 92, 93, or 94 of the Companies Act 1993. ‘‘(2) A public issuer is not, by virtue of anything done for the purposes of this subpart, affected with notice of, or put on inquiry as to, the rights of any person in relation to any securities.’’ 27 New Parts 4 and 5 substituted (1) The principal Act is amended by repealing sections 41 to 43 and the Part 4 heading, and substituting the following Parts: ‘‘Part 4 ‘‘Investment advisers and brokers ‘‘Application of this Part ‘‘41 When investment advice given to public, etc For the purpose of this Part, in determining whether invest­ment advice is given to the public or investment money or investment property is received from the public, section 3 of the Securities Act 1978 (which relates to the construction of references to offering securities to the public), except section 3(2)(a)(ii), applies as if every reference in that section to an offer of securities were a reference to the giving of investment advice or receiving of investment money or investment prop­erty, as the case may be. Struck out (unanimous) ‘‘41A Meaning of security in this Part In this Part, unless the context otherwise requires, security means a security as de.ned in section 2(1) except that it does not include— ‘‘(a) a security exempted from Part II of the Securities Act 1978 under any of paragraphs (b) to (f) and (h) of section 5(1) of that Act; or ‘‘(b) a call security as de.ned in regulations made under that Act. ‘‘Disclosure by investment advisers ‘‘41B Investment advisers’ disclosure obligation An investment adviser must not give investment advice to a member of the public unless the adviser has .rst made disclo­sure to that person in accordance with— ‘‘(a) sections 41C to 41G; and ‘‘(b) any requirements speci.ed by regulations made under section 49C. ‘‘41C Investment adviser must disclose experience, quali.cations, professional standing, etc An investment adviser must disclose— ‘‘(a) the following information in relation to any quali.ca­tions of the adviser that are relevant to the giving of investment advice: ‘‘(i) the nature of the quali.cations; and ‘‘(ii) when those quali.cations were obtained; and ‘‘(iii) a brief description of the extent to which the adviser has kept up to date the knowledge gained in obtaining those quali.cations; and ‘‘(b) a brief description of the adviser’s experience as an investment adviser; and: ‘‘(c) whether the adviser is a member of a professional body that is relevant to the provision of investment advice; and ‘‘(d) whether the adviser has professional indemnity insur­ance, and the nature and scope of that insurance; and ‘‘(e) whether dispute resolution facilities are available to the adviser’s clients. ‘‘41D Investment adviser must disclose certain criminal convictions, etc ‘‘(1) An investment adviser must disclose whether, during the period of 5 years before the investment advice is given, the investment adviser— ‘‘(a) has been convicted of an offence under this Act or the Securities Act 1978, or of a crime involving dishonesty (as de.ned in section 2(1) of the Crimes Act 1961); or ‘‘(b) was a principal of.cer of a body corporate, if a body corporate committed an offence referred to in paragraph (a), when the body corporate committed the offence; or ‘‘(c) has been adjudicated bankrupt; or ‘‘(d) has been prohibited by an Act or by a court from taking part in the management of a company or a business; or ‘‘(e) has been (a party to any successful court action) the subject of an adverse .nding by a court, tribunal, or disciplinary body in any proceeding that has been taken against the investment adviser in the adviser’s profes­sional (or other business) capacity; or ‘‘(f) has been expelled from, or has been prohibited from being a member of, a professional body. ‘‘(2) In the case of an investment adviser that is a body corporate or unincorporated, the investment adviser must also— ‘‘(a) make disclosure under subsection (1) for each principal of.cer of the investment adviser; and ‘‘(b) disclose whether, during the period of 5 years before the investment advice is given, the investment adviser has been placed in statutory management or receivership. ‘‘41E Investment adviser must disclose fees An investment adviser must disclose the nature and level of the fee that the adviser will charge the person to whom the adviser gives investment advice. ‘‘41F Investment adviser must disclose other interests and relationships ‘‘(1) An investment adviser must disclose whether or not the adviser or an associated person has, or will or may have, any interest or relationship that a reasonable person would .nd reasonably likely to in.uence the adviser in giving the invest­ment advice. ‘‘(2) This includes an obligation to disclose— ‘‘(a) any relevant remuneration as de.ned in subsection (4); and ‘‘(b) whether the adviser is an associated person of, or has any other .nancial or other relationship with, any per­son connected with the investment; and ‘‘(c) a relationship with any other person (other than a pro­fessional body) who may reasonably be expected to in.uence the provision or content of the investment advice; and ‘‘(d) any other direct or indirect pecuniary or other interest in giving the investment advice. ‘‘(3) An investment adviser must disclose the following information: ‘‘(a) the nature and extent of the interest or relationship; and ‘‘(b) in the case of remuneration, to the extent practicable, the amount or rate of the remuneration and the name of the person from whom the remuneration has been, or will or may be, received. ‘‘(4) In this section,— ‘‘relevant remuneration means any remuneration that the adviser or an associated person has received, or will or may receive, directly or indirectly, from a person other than the investor in connection with the giving of the investment advice or a transaction resulting from the giving of the advice ‘‘remuneration means a commission, fee, or other bene.t or advantage, whether pecuniary or not, and whether direct or indirect; but does not include a salary or wages of a .xed amount. ‘‘41G Investment adviser must disclose details of securities about which advice given An investment adviser must disclose— ‘‘(a) the types of securities about which the adviser gives advice; and ‘‘(b) if the adviser gives advice only about securities of a particular issuer or particular issuers, a statement to this effect and the name of each of the issuers concerned. ‘‘Disclosure by investment brokers ‘‘41H Investment brokers’ disclosure obligation An investment broker must not receive investment money or investment property from a member of the public unless the broker has .rst made disclosure to that person in accordance with— ‘‘(a) sections 41I and 41J; and ‘‘(b) any requirements speci.ed by regulations made under section 49C. ‘‘41I Investment broker must disclose certain criminal convictions, etc ‘‘(1) An investment broker must disclose whether, during the period of 5 years before the investment money or investment property is received, the investment broker— ‘‘(a) has been convicted of an offence under this Act or the Securities Act 1978, or of a crime involving dishonesty (as de.ned in section 2(1) of the Crimes Act 1961); or ‘‘(b) was a principal of.cer of a body corporate, if a body corporate committed an offence referred to in paragraph (a), when the body corporate committed the offence; or ‘‘(c) has been adjudicated bankrupt; or ‘‘(d) has been prohibited by an Act or by a court from taking part in the management of a company or a business; or ‘‘(e) has been (a party to any successful court action) the subject of an adverse .nding by a court, tribunal, or disciplinary body in any proceeding taken against the broker in the broker’s professional (or other business) capacity; or ‘‘(f) has been expelled from, or has been prohibited from being a member of, a professional body. ‘‘(2) In the case of an investment broker that is a body corporate or unincorporated, the investment adviser must also— ‘‘(a) make disclosure under subsection (1) for each principal of.cer of the investment broker; and ‘‘(b) disclose whether, during the period of 5 years before the investment money or investment property is received, the investment broker has been placed in statutory man­agement or receivership. ‘‘41J Investment broker must disclose procedures for dealing with investment money or investment property ‘‘(1) An investment broker must disclose a brief description of the procedures of the broker (or, if the broker is acting in the course of his or her employment, of the employer) relating to the receipt and disbursement of the money or receipt and distribution of the property by the broker, including— ‘‘(a) how payment or delivery of money or delivery of prop­erty should be made to the broker; and ‘‘(b) whether or not the money or property received by the broker will be held on trust for the investor, and will be so held until it is disbursed or distributed in accordance with the investor’s instructions; and ‘‘(c) what records will be kept by the broker in relation to the money or property, whether the investor has access to those records, and the terms of that access; and ‘‘(d) whether or not the receipt, holding, and disbursement of the money and the receipt, holding, and distribution of the property, by the broker will be audited by an auditor and, if so, the name of the auditor; and ‘‘(e) the extent, if any, to which the broker can use the money or property for the bene.t of the broker or any other person; and ‘‘(f) any other information that must be disclosed under reg­ulations made under this Act. ‘‘(2) For the purposes of subsection (1)(d), auditor means a person who would, if the broker were an issuer of securities, be a quali.ed auditor within the meaning of section 2C of the Securities Act 1978. ‘‘Method of disclosure ‘‘41K How disclosure must be made ‘‘(1) Disclosure under this Part must be made in a disclosure statement. ‘‘(2) The disclosure statement must— ‘‘(a) be in writing; and ‘‘(b) state when it was prepared; and ‘‘(c) in the case of an investment adviser or an investment broker, other than an employee of an investment adviser or investment broker, state the name, address, and busi­ness telephone number of the investment adviser or the investment broker concerned; and ‘‘(d) in the case of an investment adviser or an investment broker who is an employee of an investment adviser or an investment broker, state the name of that employee; and ‘‘(e) be either received by the investor, or delivered or sent to the investor, at the investor’s last known address or an address (including an electronic address) speci.ed by the investor for this purpose; and ‘‘(f) comply with any regulations prescribing the form or the contents of the statement. ‘‘Other requirements relating to disclosure ‘‘41L Disclosure must not be misleading Disclosure under this Part must not be deceptive, misleading, or confusing at the time that it is made. ‘‘41M Disclosure of additional information ‘‘(1) A disclosure statement may be accompanied by disclosure of additional information. ‘‘(2) Additional information that accompanies a disclosure state­ment must not be deceptive, misleading, or confusing. ‘‘41N No compliance with disclosure obligations if disclosure statement out of date ‘‘(1) An investment adviser or an investment broker who has pre­viously given a member of the public a disclosure statement does not comply with their respective disclosure obligations under this Part if the disclosure statement is out of date when— ‘‘(a) the investment adviser gives that person investment advice; or ‘‘(b) the investment broker receives investment money or investment property from that person. ‘‘(2) The disclosure statement is out of date if— ‘‘(a) since the date of the disclosure statement there has been a material change in any matter that must be disclosed in the disclosure statement; and ‘‘(b) a reasonable person in the position of the person receiv­ing advice or engaging the investment broker would consider that the change (may) would materially affect any of the following decisions by that person: ‘‘(i) in the case of disclosure by an investment adviser, a decision— ‘‘(A) to proceed to be given investment advice by that adviser; or ‘‘(B) to proceed with investment advice already given by the adviser; or ‘‘(C) about the weight that the person gives to investment advice by that adviser: ‘‘(ii) in the case of an investment broker, a decision— ‘‘(A) to proceed with the receipt of investment money or investment property by that bro­ker; or ‘‘(B) to postpone or countermand the investment of investment money or investment prop­erty already received by that broker but not yet invested. ‘‘(3) Subsection (1) does not apply if, before the investment advice is given or the investment money or investment property is received, as the case may be, the investment adviser or the investment broker gives the person concerned— ‘‘(a) a new disclosure statement that is up to date; or ‘‘(b) additional written information that, when read with the original disclosure statement, updates the disclosure statement. ‘‘41O Advertisement must refer to disclosure statement Any advertisement by an investment adviser or an investment broker advertising that person’s services as an investment adviser or investment broker must state that a disclosure state­ment is available, on request and free of charge. ‘‘41P Advertisement must not be deceptive, misleading, or confusing ‘‘(1) An advertisement must not be deceptive, misleading, or confusing. ‘‘(2) In subsection (1), advertisement means an advice advertise­ment, a broker advertisement, or a product advertisement. ‘‘Offences ‘‘41Q Offence for failure to comply with disclosure obligation Every person who is aware or ought reasonably to be aware of information that the person must disclose under an investment advisers’ or investment brokers’ disclosure obligation, and who fails to disclose that information in accordance with this Part, commits an offence (see section 43D for the maximum penalty of a $100,000 .ne for an individual or a $300,000 .ne for a body corporate). ‘‘41R Offence of deceptive, misleading, or confusing disclosure ‘‘(1) An investment adviser or an investment broker who makes disclosure that contravenes section 41L or section 41M commits an offence (see section 43D for the maximum penalty of a $100,000 .ne for an individual or a $300,000 .ne for a body corporate). ‘‘(2) However, the adviser or the broker does not commit an offence under subsection (1) if the adviser or the broker proves that, at the time when the disclosure was made, the adviser or the broker (had) believed on reasonable grounds (to believe) that the disclosure was not deceptive, misleading, or confusing. ‘‘(3) The defence in subsection (2) does not prevent the Commission from making a prohibition or corrective order under section 42B or a disclosure order under section 42D, or the Court from granting an injunction under section 42M, or making a correc­tive order under section 42P or a disclosure order under section 42R. ‘‘41S Offence of deceptive, misleading, or confusing advertisement ‘‘(1) An investment adviser or an investment broker commits an offence (see section 43D for the maximum penalty of a .ne of $300,000 and $10,000 per day in the case of a continuing offence) if an advertisement— ‘‘(a) contravenes section 41P; and ‘‘(b) has been distributed to a person; and ‘‘(c) was— ‘‘(i) authorised or instigated by, or on behalf of, the adviser or the broker; or ‘‘(ii) prepared with the co-operation of, or by arrange­ment with, the adviser or the broker. ‘‘(2) However, the adviser or the broker does not commit an offence under subsection (1) if the adviser or the broker proves that, at the time when the advertisement was distributed, the adviser or the broker (had) believed on reasonable grounds (to believe) that the advertisement was not deceptive, misleading, or confusing. ‘‘(3) The defence in subsection (2) does not prevent the Commission from making a prohibition or corrective order under section 42B or a disclosure order under section 42D, or the Court from granting an injunction under section 42M, or making a correc­tive order under section 42P or a disclosure order under section 42R. ‘‘(1) An investment adviser must not recommend to a member of the public that that person acquire securities, and an invest­ment broker must not receive investment money from a mem­ber of the public in respect of the acquisition of securities, if— ‘‘(a) when the securities were or are offered for subscription, the offer was or is illegal; and ‘‘(b) the illegality has not been remedied; and ‘‘(c) the adviser or the broker knows or ought to know that, when the securities were or are offered for subscription, the offer was or is illegal. ‘‘(2) A person who contravenes subsection (1) commits an offence (see section 43D for the maximum penalty of a .ne of $300,000 and $10,000 per day in the case of a continuing offence). ‘‘41U Defence of immateriality It is a defence to a charge of contravening any of sections 41Q to 41T if the contravention was in respect of matters that, in the opinion of the Court dealing with the charge, were immaterial. ‘‘Territorial scope of this Part ‘‘41V Territorial scope ‘‘(1) This Part applies to investment advice offered to, or an invest­ment brokers service performed for, or an investment adviser’s or investment broker’s advertisement received by, a person in New Zealand, regardless of— ‘‘(a) where any resulting investment occurs: ‘‘(b) where any investment money or investment property is received: ‘‘(c) where the adviser or broker is resident, is incorporated, or carries on business. ‘‘(2) For the purposes of this Part, advice is offered, or an adver­tisement is made, to a person in New Zealand if the advice or the advertisement is received by a person in New Zealand, unless the adviser or broker shows that it took all reasonable steps to ensure that members of the public in New Zealand do not receive the advice or the advertisement. ‘‘(3) (This Part applies) Sections 41P and 41T apply to investment advice offered to, or an investment broker’s service performed for, or an advertisement made to, a person outside New Zealand by a person who is resident, is incorporated, or carries on business, in New Zealand. ‘‘Miscellaneous ‘‘41W No contracting out The provisions of this Part have effect no matter what any agreement may say. Struck out (unanimous) ‘‘41X Liability under other law or enactment ‘‘(1) Nothing in the Fair Trading Act 1986 applies to conduct to the extent that it is regulated by this Part. ‘‘(2) Nothing in this Part affects the liability of a person under any other law or enactment. New (unanimous) ‘‘41X No liability under Fair Trading Act 1986 if not liable under this Part ‘‘(1) A court hearing a proceeding brought against a person under the Fair Trading Act 1986 must not .nd that person liable for conduct that is regulated by this Part if that person would not be liable for that conduct under this Part. ‘‘(2) Except as provided in subsection (1), nothing in this Part affects the liability of a person under any other law or enactment. ‘‘Part 5 ‘‘Enforcement and remedies Struck out (unanimous) ‘‘Subpart 1—Preliminary provisions ‘‘42 What are contraventions for purposes of Part In this Part, unless the context otherwise requires, a reference to a person who has contravened a provision, prohibition, obligation, or exemption (a provision) is a reference to a person who— ‘‘(a) has contravened the provision; or ‘‘(b) has attempted to contravene the provision; or ‘‘(c) has aided, abetted, counselled, or procured any other person to contravene the provision; or ‘‘(d) has induced, or attempted to induce, any other person, whether by threats or promises or otherwise, to contra­vene the provision; or ‘‘(e) has been in any way, directly or indirectly, knowingly concerned in, or a party to, the contravention by any other person of the provision; or ‘‘(f) has conspired with any other person to contravene the provision. ‘‘42A De.nitions in this Part ‘‘(1) In this Part, acquire, dispose of, and security have the mean­ings that they have in Part 1 when applied to a contravention of Part 1. ‘‘(2) In this Part, a reference to an exemption in respect of an obligation or provision is to an exemption granted by or under this Act from that obligation or provision (for example, a continuous disclosure obligation exemption is an exemption from a continuous disclosure obligation). ‘‘(3) In this Part, a reference to a person contravening or comply­ing with an exemption is to a person contravening or com­plying with a term or condition of that exemption. ‘‘Subpart 2—Commission’s enforcement powers ‘‘Prohibition and corrective orders ‘‘42B When Commission may make prohibition and corrective orders The Commission may make a prohibition order or a corrective order, or both, in accordance with this subpart if it is satis.ed that, by engaging in any conduct, a person has contravened, or would contravene,— ‘‘(a) a market manipulation prohibition or the general deal­ ing misconduct prohibition: ‘‘(b) an investment advisers’ or brokers’ obligation or exemption: ‘‘(c) section 36A(1) (no holding out as securities exchange unless registered) or an exemption from that section: ‘‘(d) section 37A(1) (no holding out as futures exchange unless authorised) or an exemption from that section. ‘‘42C Terms of prohibition and corrective orders ‘‘(1) A prohibition order may prohibit or restrict the making of any statement or distributing of any document by or on behalf of the person for the purpose of preventing a contravention or further contravention of the relevant prohibition, obligation, or exemption. ‘‘(2) A corrective order may direct the person in contravention to publish, at the person’s own expense, in the manner and at the times speci.ed in the order, corrective statements that are speci.ed in, or are to be determined in accordance with, the order. ‘‘Disclosure orders ‘‘42D When Commission may make disclosure orders The Commission may make a disclosure order in accordance with this subpart if it is satis.ed that a person has contravened— ‘‘(a) a continuous disclosure obligation or exemption: ‘‘(b) a directors’ and of.cers’ disclosure obligation or exemption: ‘‘(c) a substantial (security holders’) holding disclosure obli­gation or exemption: ‘‘(d) an investment advisers’ or brokers’ disclosure obliga­tion or exemption. ‘‘42E Terms of disclosure orders A disclosure order may order the person— ‘‘(a) to disclose in accordance with the order information for the purpose of securing compliance with the relevant obligation or exemption: ‘‘(b) to publish, at the person’s own expense, in the manner and at the times speci.ed in the order, corrective state­ments that are speci.ed in, or are to be determined in accordance with, the order. The Commission may make a temporary banning order against a person in accordance with this subpart if the Com­mission is satis.ed that— ‘‘(a) the person has persistently contravened section 13 (general dealing misconduct prohibition), Part 4 (invest­ment advisers and brokers), or the Securities Act 1978; or ‘‘(b) the person has been prohibited in an overseas jurisdic­tion from carrying on activities that the Commission is satis.ed are substantially similar to any of the activities referred to in section 42G. ‘‘42G Terms of temporary banning order for investment adviser and broker activities A temporary banning order may prohibit or restrict the person from doing all or any of the following things, without the leave of the Commission, for a period stated in the order of 14 days or less: ‘‘(a) giving investment advice to, or receiving investment money or investment property from, the public: ‘‘(b) acting as a director or promoter of, or in any way, whether directly or indirectly, being concerned or tak­ing part in the management of, any company or busi­ness that is an investment adviser or an investment broker: ‘‘(c) acting as an employee or agent of an investment adviser or an investment broker in a capacity that allows the person to take part in the giving of investment advice to, or receiving investment money or investment property from, the public. ‘‘Process for Commission’s orders ‘‘42H Commission must follow steps before making orders ‘‘(1) The Commission may make an order under this subpart only if it .rst takes the following steps: ‘‘(a) gives the person to whom the order is directed written notice of— ‘‘(i) the nature of the alleged contravention; and Securities Legislation Part 1 cl 27 ‘‘(ii) the proposed terms of the order; and ‘‘(iii) the reasons for the proposed order; and ‘‘(b) also gives that written notice to the relevant registered exchange, in the case of a disclosure order for a contra­vention of a continuous disclosure obligation or exemp­tion; and ‘‘(c) gives that notice at least— ‘‘(i) 24 hours before the Commission makes the order, in the case of an order speci.ed in section 42I; or ‘‘(ii) 48 hours before the Commission makes the order, in the case of any other disclosure order; or ‘‘(iii) 7 days before the Commission makes the order, in the case of any other prohibition or corrective order; and ‘‘(d) gives each person to whom notice of the order must be given an opportunity to make written submissions within that notice period; and ‘‘(e) also gives each of those persons an opportunity to have the matter determined following a meeting of the Com­mission after the expiry of that notice period and the opportunity to be heard and represented by counsel at that meeting (but this paragraph does not apply to an order speci.ed in section 42I); and ‘‘(f) has regard to any written submissions made to it within that notice period and (if applicable) written or oral submissions made at a meeting of the Commission. ‘‘(2) However, the Commission may shorten these steps in accor­dance with section 42I for an order speci.ed in that section. ‘‘42I Commission may shorten steps for speci.ed orders ‘‘(1) If the Commission thinks it necessary or desirable in the public interest for any of the orders set out in subsection (3) to be made more urgently than section 42H permits, it— ‘‘(a) may give less than 24 hours’ notice before it makes the order, and the notice may be oral, not written; and ‘‘(b) may give persons an opportunity to make only oral submissions, not written, to a member, of.cer, or employee of the Commission (as the Commission determines). 97 ‘‘(3) The orders are— ‘‘(a) a prohibition or corrective order for a contravention of a market manipulation prohibition or the general dealing misconduct prohibition: ‘‘(b) a prohibition or corrective order for an investment advisers’ or brokers’ obligation or exemption if that order is stated to apply for a period of 14 days or less: ‘‘(c) a disclosure order for a contravention of a continuous disclosure obligation or exemption: ‘‘(d) a temporary banning order. ‘‘42J Commission must give notice after making orders ‘‘(1) If the Commission makes an order under this subpart, the Commission— ‘‘(a) must, as soon as is reasonably practicable, give written notice to the person to whom the order is directed of— ‘‘(i) the terms of the order; and ‘‘(ii) the reasons for the order; and ‘‘(b) must also give that written notice to the relevant regis­tered exchange, in the case of a disclosure order for a contravention of a continuous disclosure obligation or exemption; and ‘‘(c) may also give notice to any other person of those matters. ‘‘(2) The Commission must also, as soon as practicable after the making of a temporary banning order, give notice on its web-site (and may give public notice by any other means also) of the name of the person against whom the order is made and the period or dates for which the ban applies. ‘‘General provisions ‘‘42K General provisions on Commission’s orders ‘‘(1) The Commission may make an order under this subpart on the terms and conditions that the Commission thinks .t. ‘‘(2) The Commission may vary an order in the same way as it may make the order under this subpart. ‘‘(3) The Commission may revoke an order or suspend an order on the terms and conditions it thinks .t. ‘‘(4) An order made under this subpart is subject to appeal only in accordance with section 69P of the Securities Act 1978. ‘‘42L Offence for failing to comply with Commission’s orders ‘‘(1) A person who contravenes an order made by the Commission under this subpart commits an offence (see section 43E for the maximum penalty of a $30,000 .ne). ‘‘(2) No person may be convicted of an offence against subsection (1) if— ‘‘(a) the person proves that the contravention occurred with­out the person’s knowledge or without the person’s knowledge of the order; or ‘‘(b) the contravention was in respect of matters that, in the Court’s opinion, were immaterial; or ‘‘(c) the Court thinks that the contravention, in the circum­stances of the case, ought reasonably to be excused. ‘‘Subpart 3—Court’s enforcement powers ‘‘Injunctions ‘‘42M What Court may injunct The Court may, on application by the Commission or any other person, grant an injunction restraining a person from engaging in conduct that constitutes or would constitute a contravention of a provision of this Act. ‘‘42N When Court may grant injunctions and interim injunctions ‘‘(1) The Court may grant an injunction restraining a person from engaging in conduct of a particular kind if— ‘‘(a) it is satis.ed that the person has engaged in conduct of that kind; or ‘‘(b) it appears to the Court that, if an injunction is not granted, it is likely that the person will engage in con­duct of that kind. ‘‘(2) The Court may grant an interim injunction restraining a per­son from engaging in conduct of a particular kind if in its opinion it is desirable to do so. ‘‘(4) Subsections (1)(b) and (2) apply whether or not the person has previously engaged in conduct of that kind or there is an imminent danger of substantial damage to any other person if that person engages in conduct of that kind. ‘‘42O Undertaking as to damages not required by Commission ‘‘(1) If the Commission applies to the Court for the grant of an interim injunction under this subpart, the Court must not, as a condition of granting an interim injunction, require the Com­mission to give an undertaking as to damages. ‘‘(2) However, in determining the Commission’s application for the grant of an interim injunction, the Court must not take into account that the Commission is not required to give an under­taking as to damages. ‘‘Corrective orders ‘‘42P When Court may grant corrective orders The Court may, on application by the Commission or any other person, make a corrective order if it is satis.ed that a person has contravened— ‘‘(a) a market manipulation prohibition or the general deal­ing misconduct prohibition: ‘‘(b) an investment advisers’ or brokers’ obligation or exemption: ‘‘(c) section 36A(1) (no holding out as securities exchange unless registered) or an exemption from that section: ‘‘(d) section 37A(1) (no holding out as futures exchange unless authorised) or an exemption from that section. ‘‘42Q Terms of corrective orders A corrective order may direct the person in contravention to publish, at the person’s own expense, in the manner and at the times speci.ed in the order, corrective statements that are speci.ed in, or are to be determined in accordance with, the order. ‘‘Disclosure orders ‘‘42R When Court may make disclosure orders The Court may, on application by the Commission or any other person, make a disclosure order if it is satis.ed that a person has contravened— ‘‘(a) a continuous disclosure obligation or exemption: ‘‘(b) a substantial (security holders’) holding disclosure obli­gation or exemption: ‘‘(c) an investment advisers’ or brokers’ disclosure obliga­tion or exemption. ‘‘42S Terms of disclosure orders A disclosure order may order— ‘‘(a) the person in contravention to disclose in accordance with the order information for the purpose of securing compliance with the relevant obligation or exemption: ‘‘(b) the person in contravention to publish, at the person’s own expense, in the manner and at the times speci.ed in the order, corrective statements that are speci.ed in, or are to be determined in accordance with, the order. ‘‘Subpart 4—Civil remedies ‘‘Overview of civil remedies ‘‘42T Overview of civil remedies ‘‘(1) The following remedies (civil remedy orders) (may be) are available for a contravention of a civil remedy provision (except if otherwise provided) under this subpart: ‘‘(a) a pecuniary penalty order and declaration of contraven­tion (on application by the Commission only): ‘‘(b) a compensatory order: ‘‘(c) a speci.c civil remedy order under section 42ZD: ‘‘(d) other civil remedy orders under section 42ZF. Struck out (unanimous) ‘‘(2) Section 42ZH covers how those civil remedy orders interrelate with each other. ‘‘(3) This section is a guide only to the general scheme and effect of this subpart. ‘‘42U What are civil remedy provisions In this subpart, a civil remedy provision is— ‘‘(a) an insider conduct prohibition: ‘‘(b) a market manipulation prohibition: ‘‘(c) the general dealing misconduct prohibition: ‘‘(d) a continuous disclosure obligation or exemption: ‘‘(e) a substantial (security holders’) holding disclosure obli­ gation or exemption: ‘‘(f) an investment advisers’ or brokers’ obligation or exemption. ‘‘Pecuniary penalty orders and declarations of contravention ‘‘42V When Court may make pecuniary penalty orders and declarations of contravention ‘‘(1) If the Commission applies for a pecuniary penalty order against a person under this Act, the Court— ‘‘(a) must determine whether the person has contravened a civil remedy provision; and ‘‘(b) must make a declaration of contravention (see sections 42W and 42X) if satis.ed (that there is a contravention) of that matter; and ‘‘(c) may order the person to pay a pecuniary penalty that the Court considers appropriate to the Crown (see sections 42Y to 42ZA) if satis.ed (that there is a contravention) of that matter and that the contravention— ‘‘(i) materially prejudices the interests of acquirers or disposers of the securities or relevant interests involved; or ‘‘(ii) materially prejudices the public issuer or, if the public issuer is a body corporate, its members; or ‘‘(iii) is likely to materially damage the integrity or reputation of any of New Zealand’s securities markets; or ‘‘(iv) is otherwise serious. ‘‘(2) However, the Court must not make a declaration of contraven­tion or a pecuniary penalty order under this section for a contravention of— ‘‘(a) section 13 (general dealing misconduct prohibition); or ‘‘(b) an investment advisers’ or broker’s disclosure obliga­tion or exemption. ‘‘42W Purpose and effect of declarations of contravention ‘‘(1) The purpose of a declaration of contravention is to enable an applicant for a compensatory order or other civil remedy order under section 42ZF to rely on the declaration of contravention in the proceedings for that order, and not be required to prove the contravention. ‘‘(2) Accordingly, a declaration of contravention is conclusive evi­dence of the matters that must be stated in it under section 42X. ‘‘42X What declarations of contravention must state A declaration of contravention must state the following: ‘‘(a) the court that made the declaration; and ‘‘(b) the civil remedy provision to which the contravention relates or, if the contravention is of an exemption, both the term or condition contravened and the civil remedy provision to which the exemption relates; and ‘‘(c) the person who engaged in the contravention; and ‘‘(d) the conduct that constituted the contravention and, if a transaction constituted the contravention, the transac­tion; and ‘‘(e) the public issuer to which the conduct related (if relevant). ‘‘42Y Maximum amount of pecuniary penalty ‘‘(1) The maximum amount of a pecuniary penalty for a contraven­tion of an insider conduct prohibition or market manipulation prohibition is the greater of— ‘‘(a) the consideration for the transaction that constituted the contravention (if any); or ‘‘(b) 3 times the amount of the gain made, or the loss avoided, by the person in carrying out the conduct (see section 42Z for guidance); or ‘‘(c) $1,000,000. ‘‘(2) The maximum amount of a pecuniary penalty for a contraven­tion of any other civil remedy provision is $1,000,000. ‘‘42Z Guidance for Court on how to determine gains made or losses avoided for purposes of maximum amount ‘‘(1) For the purposes of section 42Y(1)(b),— ‘‘(a) a person makes a gain if the person acquires a security in a public issuer for less than its value: ‘‘(2) In this case, the gain made or loss avoided is the difference between the consideration paid or received (as the case may be) and the value the security would have had at the time of the sale if,— ‘‘(a) in the case of a contravention of an insider conduct prohibition, the material information had been gener­ally available to the market; or ‘‘(b) in the case of a contravention of a market manipulation prohibition, the conduct, statement, or information had not been misleading, deceptive, or false. ‘‘42ZA Considerations for Court in determining pecuniary penalty In determining an appropriate pecuniary penalty, the Court must have regard to all relevant matters, including— ‘‘(a) any purpose and criteria stated in this Act that apply to the civil remedy provision; and ‘‘(b) the nature and extent of the contravention; and ‘‘(c) the likelihood, nature, and extent of any damage to the integrity or reputation of any of New Zealand’s securi­ties markets because of the contravention; and ‘‘(d) the nature and extent of any loss or damage suffered by a person referred to in section 42V(1)(c)(i) or (ii), or gains made or losses avoided by the person in contravention, because of the contravention; and ‘‘(e) the circumstances in which the contravention took place; and ‘‘(f) whether or not the person in contravention has pre­viously been found by the Court in proceedings under this Act to have engaged in any similar conduct; and ‘‘(g) the relationship of the parties to the transaction consti­tuting the contravention. Struck out (unanimous) ‘‘(h) the matters set out in section 42ZH(2) (interrelationship of civil remedy orders). ‘‘Compensatory orders ‘‘42ZB When Court may make compensatory orders ‘‘(1) The Court may make a compensatory order, on application by the Commission or any other person, if the Court is satis.ed that— ‘‘(a) there is a contravention of a civil remedy provision; and ‘‘(b) a person (the aggrieved person) has suffered, or is likely to suffer, loss or damage because of the contravention. ‘‘(2) The Court may make a compensatory order whether or not the aggrieved person is a party to the proceedings. ‘‘(3) However, the Court must not make a compensatory order under this section for a contravention of an investment advis­ers’ and brokers’ disclosure obligation or exemption. ‘‘42ZC Terms of compensatory orders ‘‘(1) If section 42ZB applies, the Court may make any order it thinks just to compensate an aggrieved person in whole or in part for the loss or damage, or to prevent or reduce that loss or dam­age, including an order (without limitation) to— ‘‘(a) direct the person in contravention to pay to the aggrieved person the amount of the loss or damage: ‘‘(b) direct the person in contravention to refund money or return property to the aggrieved person: ‘‘(c) if a contract has been entered into between the person in contravention and the aggrieved person,— ‘‘(i) vary the contract or any collateral arrangement as speci.ed in the order and, if the Court thinks .t, declare the contract or arrangement to have had effect as so varied on and after a date before the order was made, as speci.ed in the order: ‘‘(ii) cancel the contract and, if the Court thinks .t, declare the cancellation to have had effect on and after a date before the order was made, as speci­ .ed in the order: ‘‘(iii) require the person in contravention to take any action the Court thinks .t to reinstate the parties (as nearly as may be in) as near as may be pos­sible to their former positions. ‘‘(3) Subsection (2) does not limit section 43T. ‘‘Civil remedy order for investment advisers’ or brokers’ disclosure obligations ‘‘42ZD When Court may make civil remedy order for investment advisers’ or brokers’ disclosure obligations ‘‘(1) The Court may make a civil remedy order described in section 42ZE against an investment adviser or investment broker, on application by an entitled person, if the Court is satis.ed that— ‘‘(a) the adviser or broker has contravened an investment advisers’ or brokers’ disclosure obligation or exemp­tion; and ‘‘(b) if the adviser or broker had complied with that obliga­tion or exemption, a reasonable person in the position of the entitled person would have— ‘‘(i) not used that adviser or proceeded with invest­ ment advice given by that adviser; or ‘‘(ii) not used that broker or paid or delivered invest­ment money or investment property to that bro­ker; or ‘‘(iii) acted in a way that was materially different from the way the entitled person acted in relation to the advice or services of the adviser or broker. ‘‘(2) An entitled person is any person who has received invest­ment advice from that investment adviser or whose invest­ment money or investment property has been paid or delivered to that investment broker. ‘‘(3) It does not matter whether or not the investment adviser or investment broker has previously contravened an investment advisers’ or brokers’ disclosure obligation or exemption, or whether or not the entitled person has suffered any loss as a result of the contravention. ‘‘42ZE Terms of civil remedy order for investment advisers’ or brokers’ disclosure obligations ‘‘(1) A civil remedy order under section (43ZD) 42ZD may order the investment adviser or investment broker to pay to the entitled person an amount determined by the Court. ‘‘(2) The maximum amount of a (pecuniary order) civil remedy order under subsection (1) is— ‘‘(a) in the case of an individual, $100,000; and ‘‘(b) in the case of a body corporate, $300,000. ‘‘Other civil remedy orders ‘‘42ZF When Court may make other civil remedy orders ‘‘(1) The Court may, on application by the Commission or any other person, make a civil remedy order described in section 42ZG if the Court is satis.ed on reasonable grounds that a person has contravened or intends to contravene a civil rem­edy provision. ‘‘(2) However, the Court must not make a civil remedy order of that kind for a contravention of a continuous disclosure obli­gation or exemption or an investment advisers’ or brokers’ obligation or exemption. ‘‘42ZG Terms of other civil remedy orders A civil remedy order under section 42ZF may— ‘‘(a) restrain the exercise of rights attaching to securities, or the exercise of relevant interests, or declare an exercise of those rights or relevant interests to be void and of no effect: ‘‘(b) restrain the issue or allotment of securities or restrain any distribution due in relation to securities: ‘‘(c) restrain the acquisition or disposal of securities or of relevant interests or restrain the registration of any transfer of that kind: ‘‘(d) direct the disposal of securities or of relevant interests (including the person or class of person to which they must, or must not, be disposed of) and direct the pay­ment of the proceeds of any disposal: ‘‘(e) require securities to be forfeited and require the public issuer to cancel the forfeited securities: ‘‘(f) cancel an agreement for the acquisition or disposal of securities or relevant interests. ‘‘Interrelationship of civil remedies ‘‘42ZH (Interrelationship of) More than 1 civil remedy (orders)order may be made for same conduct The Court may make a civil remedy order of one kind against a person even though the Court has made another civil remedy order of a different kind against the person for the same conduct. Examples The Court may make a compensatory order and a pecuniary penalty order for the same conduct. The Court may make a civil remedy order requiring forfeiture of securities and declaring a previous exercise of voting rights attaching to those securities to be void. Struck out (unanimous) ‘‘(2) However, in determining whether to make a civil remedy order (order A) and, if it is made, its amount or effect, the Court must have regard to— ‘‘(a) whether another civil remedy order (order B) has been imposed on the person for a contravention involving the conduct concerned in the application for order A; and ‘‘(b) if so, the amount or effect of order B. ‘‘42ZI Only one pecuniary penalty order may be made for same conduct If conduct by a person constitutes a contravention of 2 or more civil remedy provisions, proceedings may be brought against that person for the contravention of any one or more of the provisions, but no person is liable to more than one pecuniary penalty order for the same conduct. ‘‘General ‘‘42ZJ Standard of proof for civil remedies The proceedings under this subpart are civil proceedings and the usual rules of the Court and rules of evidence and proce­dure for civil proceedings apply (including the standard of proof). ‘‘42ZK Time limit for applying for civil remedies ‘‘(1) An application for a pecuniary penalty order, a civil remedy order under section 42ZD, or other civil remedy order under section 42ZF may be made at any time within 2 years after the date on which the matter giving rise to the contravention was discovered or ought reasonably to have been discovered. ‘‘(2) The usual time limits apply to all applications for other civil remedy orders. New (unanimous) ‘‘(3) However, an application for a compensatory order in respect of the contravention may be made at any time within 6 months after the date on which a declaration of contravention is made, even if the usual time limit has expired. ‘‘Subpart 5—Criminal offences and penalties ‘‘Penalties for offences ‘‘43 Penalties for failing to comply with Part 1 ‘‘(1) A person who commits an offence against any of the sections set out in subsection (2) is liable on conviction on indictment to— ‘‘(a) in the case of an individual, imprisonment for a term not exceeding 5 years or a .ne not exceeding $300,000, or to both: ‘‘(b) in the case of a body corporate, a .ne not exceeding $1,000,000. ‘‘(2) The sections are— ‘‘(a) section 8F (criminal liability for insider conduct): ‘‘(b) section 11A (criminal liability for false or misleading statement or information): ‘‘(c) section 11D (criminal liability for false or misleading appearance of trading, etc). Struck out (unanimous) ‘‘(1) A person who commits an offence against section 19ZD (offence for failure to comply with directors’ and of.cers’ disclosure obligation) is liable on summary conviction to a .ne not exceeding $30,000. New (unanimous) ‘‘(1) A person who commits an offence against any of the follow­ing sections is liable on summary conviction to a .ne not exceeding $30,000: ‘‘(a) section 19ZD (offence for failure to comply with direc­ tors’ and of.cers’ disclosure obligation): ‘‘(b) section 35BA (offence for failure to comply with sub­stantial holding disclosure obligation). ‘‘(2) A person who commits an offence against any of the follow­ing sections is liable on summary conviction to a .ne not exceeding $10,000: ‘‘(a) section 19ZF (offences relating to directors’ and of.cers’ interests register): ‘‘(b) section 32 (conditions of exemption for trustee corpora­tions and nominee companies): ‘‘(c) section 35E (offences relating to substantial holdings register): ‘‘(d) section 35H (offence for failing to publish information on substantial holdings or disclosures). ‘‘43B Penalties for failing to comply with Part 2B ‘‘(1) A person who commits an offence against section 36ZX (offence for failing to comply with monitoring of securities exchange provisions) is liable on summary conviction to a .ne not exceeding $30,000. ‘‘(2) A person who commits an offence against any of the follow­ing sections is liable on summary conviction to a .ne not exceeding $10,000 for every day or part of a day during which the contravention occurs: ‘‘(a) section 36A(1) (no holding out as securities exchange unless registered): ‘‘(b) section 36B(1) (no operation of securities markets unless registered (if restriction applies)): ‘‘(c) section 36G(1) (registered exchange must operate securities markets with conduct rules that include required matters and have effect): ‘‘(d) section 36P(1) (registered exchange must not operate new securities market if proposed conduct rules or changes not approved): ‘‘(e) section 36Z (offence for breach of terms or conditions of authorisation). ‘‘(3) A person who commits an offence against section 36Q(1) (conduct rules must be available for public inspection) is liable on summary conviction to a .ne not exceeding $5,000. ‘‘(4) A person who commits an offence against section 36U(1)(a) (effect of exceeding control limit) is liable on summary con­viction to a .ne not exceeding $1,000 for every day or part of a day during which the contravention occurs. ‘‘43C Penalties for failing to comply with Part 3 ‘‘(1) A person who commits an offence against section 38 (dealers in futures contracts must be authorised) is liable on conviction on indictment— ‘‘(a) in the case of an individual, to imprisonment for a term not exceeding 3 years or to a .ne not exceeding $100,000, or to both: ‘‘(b) in the case of a body corporate, to a .ne not exceeding $300,000. ‘‘(2) A person who commits an offence against any of the follow­ing sections is liable on summary conviction to a .ne not exceeding $10,000 for every day or part of a day during which the contravention occurs: ‘‘(a) section 37A(1) (no holding out as futures exchange unless authorised): ‘‘(b) section 37B(1) (no operation of futures markets unless authorised (if restriction applies)). ‘‘43D Penalties for failing to comply with Part 4 ‘‘(1) A person who commits an offence against either of the follow­ing sections is liable on summary conviction to a .ne not exceeding $300,000 and, if the offence is a continuing one, to a further .ne not exceeding $10,000 for every day or part of a day during which the offence is continued: ‘‘(a) section 41S (offence of deceptive, misleading, or con­ fusing advertisement): ‘‘(b) section 41T (recommending, or receiving money for, illegal offer). ‘‘(2) A person who commits an offence against either of the sec­tions set out in subsection (3) is liable on summary conviction to a .ne not exceeding— ‘‘(a) in the case of an individual, $100,000; or ‘‘(b) in the case of a body corporate, $300,000. ‘‘(3) The sections are— ‘‘(a) section 41Q (offence for failure to comply with disclo­sure obligation): ‘‘(b) section 41R (offence of deceptive, misleading, or con­fusing disclosure). ‘‘43E Penalties for failing to comply with this Part New (unanimous) ‘‘(1A) An individual who commits an offence against either of the following sections is liable on conviction on indictment to imprisonment for a term not exceeding 3 years or to a .ne not exceeding $100,000, or to both: ‘‘(a) section 43H (offence of contravening management ban­ ning order): ‘‘(b) section 43I (persons automatically banned from management). ‘‘(1) A person who commits an offence against any of the sections set out in subsection (2) is liable on conviction on indictment— ‘‘(a) in the case of an individual, to imprisonment for a term not exceeding 3 years or to a .ne not exceeding $100,000, or to both: ‘‘(b) in the case of a body corporate, to a .ne not exceeding $300,000. Struck out (unanimous) ‘‘(a) section 43H (offence of contravening management ban­ ning order): ‘‘(b) section 43I (persons automatically banned from management): ‘‘(c) section 43M (offence of contravening investment adviser or broker banning order): ‘‘(d) section 43N (persons automatically banned from invest­ ment adviser or broker activities): New (unanimous) ‘‘(e) section 43QC (offence of contravening orders to preserve assets to satisfy claims). ‘‘(3) A person who commits an offence against section 42L (offence for failing to comply with Commission’s orders) is liable on summary conviction to a .ne not exceeding $30,000. New (unanimous) ‘‘Subpart 5A—Other Court orders ‘‘Management bans ‘‘43F When Court may make management banning orders ‘‘(1) The Court may, on application by an entitled person, make a management banning order against a person (A) if— ‘‘(a) A has been convicted of an offence against Part 1 (deal­ing misconduct) or a pecuniary penalty order has been made against A for a contravention of that Part; or Struck out (unanimous) ‘‘(b) A has, while a director of an incorporated or unincorpo­rated body, persistently contravened this Act or, if the incorporated or unincorporated body has so contra­vened, persistently failed to take all reasonable steps to obtain compliance with this Act; or New (unanimous) ‘‘(b) A has, while a director of an incorporated or unincorpo­rated body,— ‘‘(i) persistently contravened this Act, the Companies Act 1993, the Securities Act 1978, the Takeovers Act 1993, or the takeovers code; or ‘‘(ii) if the incorporated or unincorporated body has so contravened, persistently failed to take all reason­able steps to obtain compliance with those Acts or the code; or ‘‘(c) A has been prohibited in an overseas jurisdiction from carrying on activities that the Court is satis.ed are sub­stantially similar to any of the activities referred to in section 43G in connection with a contravention of any law relating to the trading of securities. ‘‘(2) An entitled person is— ‘‘(a) the Commission: ‘‘(b) the Registrar of Companies: ‘‘(c) an incorporated or unincorporated body that— ‘‘(i) A is a director of at the time of the application; or ‘‘(ii) A was a director of at the time of the event that triggers the making of the order under subsection (1): ‘‘(d) the liquidator of an incorporated or unincorporated body referred to in paragraph (c): ‘‘(e) a person who is, or has been, a holder of securities (and, for this purpose, security has the same meaning as in the Securities Act 1978) or creditor of an incorporated or unincorporated body referred to in paragraph (c). ‘‘43G Terms of management banning orders A management banning order may prohibit or restrict the person (without the leave of the Court) from being a director or promoter of, or in any way (whether directly or indirectly) being concerned or taking part in the management of, an incorporated or unincorporated body for a period stated in the order of 10 years or less. New (unanimous) ‘‘43G Terms of management banning orders A management banning order may, for a period stated in the order of 10 years or less, prohibit or restrict the person (with­out the leave of the Court) from being a director or promoter of, or in any way (whether directly or indirectly) being con­cerned or taking part in the management of, an incorporated or unincorporated body (other than an overseas company, or an incorporated or unincorporated body, that does not carry on business in New Zealand). ‘‘43H Offence of contravening management banning order (A person) An individual who acts in contravention of a court order under section 43F commits an offence (see section 43E for the maximum penalty of 3 years’ imprisonment and a $100,000 .ne (for an individual or a $300,000 .ne for a body corporate)). ‘‘43I Persons automatically banned from management ‘‘(1) This section applies to a person if the person has been con­victed of an offence against Part 1 (dealing misconduct) or a pecuniary penalty order has been made against the person for a contravention of that Part. ‘‘(2) The person must not, for the period of 5 years after the conviction or making of the order (without the leave of the Court) be a director or promoter of, or in any way (whether directly or indirectly) be concerned or take part in the manage­ment of, an incorporated or unincorporated body (other than ‘‘(3) (A person) An individual who acts in contravention of this section commits an offence (see section 43E for the maximum penalty of 3 years’ imprisonment and a $100,000 .ne (for an individual or a $300,000 .ne for a body corporate)). Struck out (unanimous) ‘‘43J Miscellaneous provisions on management bans in Companies Act 1993, Securities Act 1978, and Securities Markets Act 1988 If conduct by a person constitutes grounds for making an order under any 1 or more of section 43F of this Act, section 60A of the Securities Act 1978, and section 383 of the Companies Act 1993, proceedings may be brought against that person under any 1 or more of those provisions, but no person is liable to more than 1 order under those provisions for the same conduct. ‘‘(2) A reference in any enactment to a person who is prohibited from being a director or promoter of, or being concerned or taking part in the management of, a company under section 382, 383, or 385 of the Companies Act 1993 must be read as extending also to a person who is prohibited from being a director or promoter of, or being concerned or taking part in the management of, an incorporated or unincorporated body under section 43F or section 43I. ‘‘(3) Subsection (2) does not apply if the enactment provides that it does not apply. New (unanimous) ‘‘43J Only one management ban may be made for same conduct If conduct by a person constitutes grounds for making an order under any 1 or more of section 43F of this Act, section 60A of the Securities Act 1978, section 44DA of the Takeovers Act 1993, and section 383 of the Companies Act 1993, proceed­ings may be brought against that person under any 1 or more of those provisions, but no person is liable to more than 1 order under those provisions for the same conduct. ‘‘Investment adviser or broker bans ‘‘43K When Court may make banning orders for investment adviser or broker activities The Court may, on application by the Commission or any other person, make an investment adviser or broker banning order against a person if the Court is satis.ed that— ‘‘(a) the person has been convicted of an offence against Part 1 (dealing misconduct) or a pecuniary penalty order has been made against the person for a contravention of that Part; or ‘‘(b) the person has been convicted of an offence against section 41S (offence of deceptive, misleading, or con­ fusing advertisement) or section 41T (recommending, or receiving money for, illegal offer) or a pecuniary pen­ alty order has been made against the person for a con­ travention of either of those sections; or ‘‘(c) the person has been convicted of an offence against any of sections 58, 59, or 59A of the Securities Act 1978 or a pecuniary penalty order has been made against the person under that Act; or ‘‘(d) the person has been convicted of a crime involving dishonesty as de.ned in section 2(1) of the Crimes Act 1961; or ‘‘(e) the person has persistently contravened section 13 (general dealing misconduct prohibition), Part 4 (invest­ment advisers and brokers), or the Securities Act 1978; or ‘‘(f) the person has been prohibited in an overseas jurisdic­tion from carrying on activities that the Court is satis­.ed are substantially similar to any of the activities referred to in section 43L. ‘‘43L Terms of investment adviser or broker banning orders An investment adviser or broker banning order may prohibit or restrict the person from doing all or any of the following things, without the leave of the Court, for a period stated in the order of 10 years or less: ‘‘(a) giving investment advice to, or receiving investment money or investment property from, the public: ‘‘(b) being a director or promoter of, or in any way, whether directly or indirectly, being concerned or taking part in the management of, any (company or business) incor­porated or unincorporated body that is an investment adviser or an investment broker (other than an overseas company, or an incorporated or unincorporated body, that does not carry on business in New Zealand): ‘‘(c) being an employee or agent of an investment adviser or an investment broker in a capacity that allows the per­son to take part in the giving of investment advice to, or receiving investment money or investment property from, the public. ‘‘43M Offence of contravening investment adviser or broker banning order A person who acts in contravention of a court order under section 43K commits an offence (see section 43E for the maxi­mum penalty of 3 years’ imprisonment and a $100,000 .ne for an individual or a $300,000 .ne for a body corporate). ‘‘43N Persons automatically banned from investment adviser or broker activities ‘‘(1) This section applies to a person if— ‘‘(a) the person has been convicted of an offence against Part 1 (dealing misconduct) or a pecuniary penalty order has been made against the person for a contravention of that Part; or ‘‘(b) the person has been convicted of an offence against section 41S (offence of deceptive, misleading, or con­fusing advertisement) or section 41T (recommending, or receiving money for, illegal offer) or a pecuniary pen­alty order has been made against the person for a con­travention of either of those sections; or ‘‘(c) the person has been convicted of a crime involving dishonesty as de.ned in section 2(1) of the Crimes Act 1961. ‘‘(2) The person must not, for the period of 5 years after the conviction or making of the order, without the leave of the Court,— ‘‘(a) give investment advice to, or receive investment money or investment property from, the public: Struck out (unanimous) ‘‘(b) be a director or promoter of, or in any way, whether directly or indirectly, be concerned or take part in the management of, any company or business that is an investment adviser or an investment broker: New (unanimous) ‘‘(b) be a director or promoter of, or in any way, whether directly or indirectly, be concerned or take part in the management of, any incorporated or unincorporated body that is an investment adviser or an investment broker (other than an overseas company, or an incor­porated or unincorporated body, that does not carry on business in New Zealand): ‘‘(c) be an employee or agent of an investment adviser or an investment broker in a capacity that allows the person to take part in the giving of investment advice to, or receiving investment money or investment property from, the public. ‘‘(3) A person who acts in contravention of this section commits an offence (see section 43E for the maximum penalty of 3 years’ imprisonment and a $100,000 .ne for an individual or a $300,000 .ne for a body corporate). ‘‘43O General provisions for bans and banning orders ‘‘(1) The Registrar of the Court must, as soon as practicable after the making of a banning order by a Court under this Part,— ‘‘(a) give notice to the Registrar of Companies and the Com­mission that the order has been made; and ‘‘(b) give notice in the Gazette of the name of the person against whom the order is made and the period or dates for which the ban applies. ‘‘(2) A person intending to apply for the leave of the Court to override a ban imposed by or under section 43F, 43I, 43K, or 43N must give to the Commission not less than 10 working days’ written notice of that person’s intention to apply. Struck out (unanimous) ‘‘Court orders relating to investment brokers’ accounts ‘‘43P When Court may make orders relating to investment brokers’ accounts The Court may, on application by the Commission or any other person, make an order described in section 43Q against a person (A) or any associated persons of A if— ‘‘(a) any of the following apply: ‘‘(i) an investigation has been commenced into the conduct of A that may constitute a contravention of an investment brokers’ obligation: ‘‘(ii) a prosecution has been commenced against A for a contravention of an investment brokers’ obligation: ‘‘(iii) civil proceedings have been commenced against A for a contravention of an investment brokers’ obligation; and ‘‘(b) the Court thinks the order necessary or desirable for the purpose of protecting the interests of a person to whom A may be liable to pay money or transfer property under a compensatory order or otherwise. ‘‘43Q Terms of orders relating to investment brokers’ accounts ‘‘(1) If section 43P applies, the Court may order A or any associated persons of A— ‘‘(a) not to remove from New Zealand, transfer, charge, or otherwise deal with any of A’s property or funds except with the prior approval of the Court and subject to the terms and conditions that the Court speci.es: ‘‘(b) to place in a trust account any money received for investment: ‘‘(c) to take any other action that is stated in the order to preserve the interests of the investment broker’s clients and creditors. ‘‘(2) Any money placed in a trust account under subsection (1) may, after it has ceased to be subject to an order, be applied for the purposes for which it was received. New (unanimous) ‘‘Orders to preserve assets to satisfy claims ‘‘43P When Court may prohibit payment or transfer of money, securities, or other property ‘‘(1) This section applies if— ‘‘(a) an investigation is being carried out under this Act in relation to an act or omission by a person, being an act or omission that constitutes or may constitute a contra­vention of this Act; or ‘‘(b) a prosecution has begun against a person for a contra­vention of this Act; or ‘‘(c) a civil proceeding has begun against a person under this Act. ‘‘(2) The Court may, on application by the Commission or by an aggrieved person, make 1 or more of the orders listed in section 43Q if the Court considers it necessary or desirable to do so for the purpose of protecting the interests of an aggrieved person. ‘‘(3) In this section,— ‘‘aggrieved person means any person to whom a relevant person is liable ‘‘liable means liable, or may be or become liable, to pay money (whether in respect of a debt, by way of damages or compensation, or otherwise) or to account for securities or other property ‘‘relevant person means a person referred to in subsection (1). Compare: Section 1323(1), Corporations Act 2001 (Aust.) ‘‘(1) The orders that may be made under section 43P are— ‘‘(a) an order prohibiting the relevant person from transfer­ring, charging, or otherwise dealing with money, secur­ities, or other property held or controlled by the relevant person: ‘‘(b) an order prohibiting a person who is indebted to the relevant person or to an associated person of the rele­vant person from making a payment in total or partial discharge of the debt to, or to another person at the direction or request of, the person to whom the debt is owed: ‘‘(c) an order prohibiting a person holding money, securities, or other property, on behalf of the relevant person, or on behalf of an associated person of the relevant person, from paying all or any of the money, or transferring, or otherwise parting with possession of, the securities or other property, to, or to another person at the direction or request of, the person on whose behalf the money, securities, or other property, is or are held: ‘‘(d) an order prohibiting the taking or sending out of New Zealand by a person of money of the relevant person or of an associated person of the relevant person: ‘‘(e) an order prohibiting the taking, sending, or transfer by a person of securities or other property of the relevant person, or of an associated person of the relevant person from a place in New Zealand to a place outside New Zealand (including the transfer of securities from a register in New Zealand to a register outside New Zealand): ‘‘(f) an order requiring the relevant person, or any person holding money, securities, or other property on behalf of the relevant person or an associated person if the relevant person, to pay or transfer money, securities, or other property to a speci.ed person to be held on trust pending determination of the investigation, prosecu­tion, or civil proceeding: ‘‘(g) an order appointing,— ‘‘(i) if the relevant person is a natural person, a receiver or trustee, having any powers that the Court orders, of the property or of part of the property of that person; or ‘‘(ii) if the relevant person is a body corporate, a receiver or receiver and manager, having any powers that the Court orders, of the property or of part of the property of that person: ‘‘(h) if the relevant person is a natural person, an order requiring that person to deliver up to the Court his or her passport and any other documents that the Court thinks .t: ‘‘(i) if the relevant person is a natural person, an order prohibiting that person from leaving New Zealand, without the consent of the Court. ‘‘(2) A reference in subsection (1)(e) or (g) to property of a person includes a reference to property that the person holds other­wise than as sole bene.cial owner, for example,— ‘‘(a) as trustee for, as nominee for, or otherwise on behalf of or on account of, another person; or ‘‘(b) in a .duciary capacity. ‘‘(3) An order may be expressed to operate for a speci.ed period or until the order is discharged by a further order under this section. Compare: Section 1323(1), (2A), (6), Corporations Act 2001 (Aust.) ‘‘43QA Interim orders ‘‘(1) If an application is made to the Court for an order under section 43P, the Court may, if in the opinion of the Court it is desirable to do so, before considering the application, grant an interim order, being an order of the kind applied for that is expressed to have effect pending the determination of the application. ‘‘(2) The Court must not require the applicant or any other person, as a condition of granting an interim order under this section, to give an undertaking as to damages. Compare: Section 1323(3), (4), Corporations Act 2001 (Aust.) ‘‘43QB Relationship with other law ‘‘(1) Nothing in sections 43P to 43QA affects the powers that the Court has apart from those sections. ‘‘(2) This section has effect subject to the Insolvency Act 1967. Compare: Section 1323(7), (8) Corporations Act 2001 (Aust.) ‘‘43QC Offence A person commits an offence who contravenes an order by the Court under section 43Q or section 43QA that is applicable to the person (see section 43E for the maximum penalty of 3 years’ imprisonment and a $100,000 .ne for an individual or a $300,000 .ne for a body corporate). Compare: Section 1323(9), (10), Corporations Act 2001 (Aust.) ‘‘Subpart 6—General Struck out (unanimous) ‘‘Time for laying information for summary offences ‘‘43R Time for laying information for summary offences ‘‘(1) Any information for an offence against this Act punishable on summary conviction may be laid at any time within 3 years after the date of the offence. ‘‘(2) Subsection (1) applies despite section 14 of, or anything else to the contrary in, the Summary Proceedings Act 1957. Struck out (unanimous) ‘‘Subpart 6—General ‘‘43S Evidence not otherwise admissible In the exercise of its jurisdiction under this Act, the Court may receive in evidence any statement, document, or information that would not be otherwise admissible that may in its opinion assist it to deal effectively with the matter. ‘‘43T Court may order payment of Commission’s costs If the Commission brings or conducts proceedings under this Part and the Court makes any order against a person under this Part, the Court may also order that person to pay the Commis-sion’s costs and expenses in conducting the proceedings. ‘‘43U Orders to secure compliance The Court may, for the purpose of securing compliance with any other order it makes under this Part, direct a person to do or refrain from doing a speci.ed act. ‘‘43V Giving notice of applications for Court orders Before making an order under this Part, the Court may direct the person making the application for the order to— ‘‘(a) give notice of the application to those persons the Court thinks .t: ‘‘(b) publish notice of the application in the manner the Court thinks .t. ‘‘43W General provisions as to Court’s orders ‘‘(1) An order under this Part may be made on the terms and conditions the Court thinks .t. ‘‘(2) The Court may revoke, vary, or suspend an order made under this Part on the terms and conditions the Court thinks .t. ‘‘43X Persons entitled to appear before Court The following persons are entitled to appear and be heard at the hearing of an application to the Court under this Part: ‘‘(a) the applicant: ‘‘(b) the public issuer: ‘‘(c) a person who is alleged to have suffered, or to be likely to suffer, loss or damage because of an alleged contra­vention (whether that person or another person makes the allegation): ‘‘(d) the Commission: ‘‘(e) the relevant registered exchange: ‘‘(f) a person directed to be given notice of the application: ‘‘(g) with the leave of the Court, any other person. ‘‘43Y Knowledge of matters presumed if employee or agent knows matters In any proceedings under this Act, it is presumed, in the absence of proof to the contrary, that a person knew, at a material time, of any matter if, at that time, an employee or agent of that person knew of the matter in his or her capacity as employee or agent. ‘‘43Z No pecuniary penalty and .ne for same conduct A person cannot be ordered to pay a pecuniary penalty and be liable for a .ne under this Act for the same conduct.’’ (2) The Investment Advisers (Disclosure) Act 1996 is consequen­tially repealed. Amendments to exemption and regulation empowering provisions 28 New sections 48 to (49E) 49F and heading substituted The principal Act is amended by repealing sections 48 and 49, and substituting the following heading and sections: ‘‘Exemptions granted and removed by Commission ‘‘48 Exemptions granted by Commission ‘‘(1) The Commission may, in its discretion and on the terms and conditions (if any) that it thinks .t, by notice in the Gazette,— ‘‘(a) exempt any transaction, class of transactions, class of persons, or class of relevant interests, acquisitions, or disposals from compliance with any directors’ and of.cers’ disclosure obligation or obligations: ‘‘(b) exempt any person or class of persons, any transaction or class of transactions, or any class of relevant interests, substantial holdings, or relevant events from compliance with any substantial security holders’ dis­closure obligation or obligations: ‘‘(c) exempt any person or class of persons, any transaction or class of transactions, or any class of investment advice (for example, advice given by telephone) or investment brokers services from compliance with any investment advisers’ or investment brokers’ disclosure obligation or obligations. ‘‘(2) The exemption has effect according to its tenor. 126 ‘‘48A Commission must notify reasons for exemption ‘‘(1) The Commission’s reasons for granting an exemption (includ­ing why the exemption is appropriate) must be noti.ed in the Gazette together with the exemption. ‘‘(2) However, the Commission may defer notifying or not notify the reasons for granting an exemption if the Commission is satis.ed that it is proper to do so on the ground of commercial con.dentiality. ‘‘48B Commission may vary or revoke exemption ‘‘(1) The Commission may vary the exemption in the same way as it may grant the exemption under section 48. ‘‘(2) The Commission may revoke the exemption by notice in the Gazette. ‘‘48C Commission may designate persons as not exempt from disclosure obligations ‘‘(1) The Commission may, by notice in the Gazette, designate a person as a person that is not exempt under section 6(1)(a) to (f) (in relation to either subpart 2 or subpart 3 of Part 2) or under section 31 or section 32A. ‘‘(2) The Commission may exercise that power if it is satis.ed that the exemption is being used for purposes of circumventing, evading, or defeating the purpose of the subpart that will (in whole or part) apply as a result of the designation, taking into account the nature, substance, and economic effect of the interest or relationship or other facts (and not the mere form). ‘‘(3) The Commission may, by notice in the Gazette, revoke a designation. ‘‘(4) A notice under this section has effect according to its tenor. ‘‘(5) A notice under this section takes effect from the date stated in the notice (which must not be earlier than the date of the Gazette notice). ‘‘48D Requirements for Commission for designations of persons as not exempt ‘‘(1) Before designating a person as not exempt under section 48C, the Commission must— ‘‘(a) do everything reasonably possible on its part to advise the person of the proposed designation; and ‘‘(2) Subsection (1) does not apply to a designation if the Commis­sion considers that it is desirable in the public interest for the exemption to be removed urgently. ‘‘(3) Failure to comply with subsection (1) does not invalidate the designation. ‘‘(4) The Commission must list on its website all persons that are currently designated (and may also publicly notify them by any other means). ‘‘Regulations ‘‘48E Regulations requiring continuous disclosure by public issuers ‘‘(1) The Governor-General may, on the recommendation of the Minister in accordance with section 48F or section 48G, make regulations for the purpose of providing, under section 19C, for continuous disclosure by public issuers of material infor­mation that is not generally available to the market. ‘‘(2) Those regulations may— ‘‘(a) declare that section 19C applies to a registered exchange: ‘‘(b) contain requirements for the purpose of requiring public issuers that are parties to listing agreements with that exchange to notify information about events or matters as they arise (being material information that is not generally available to the market) for the purpose of that information being made available to participants in the registered exchange’s market: ‘‘(c) determine the form in which, how, and when that infor­mation must be made available to participants in the registered exchange’s market, or provide who may determine any of these matters: ‘‘(d) determine the form of, method of, and any additional details required with, the noti.cation of that informa­tion, or provide who may determine any of these matters: ‘‘(e) exempt (on terms and conditions, if any) persons, clas­ses of persons, information, and classes of information from compliance with any provision or provisions of the regulations: ‘‘(f) provide for a speci.ed person or persons to exempt (on terms and conditions, if any) persons, classes of per­sons, information, and classes of information from compliance with any provision or provisions of the regulations, and to vary and revoke those exemptions: ‘‘(g) provide for a speci.ed person or persons to carry out functions under the regulations, and the powers and procedures of that person or persons: ‘‘(h) require fees and charges to be paid in connection with the performance or exercise of a function or power referred to in paragraph (f) or paragraph (g), and prescribe those fees and charges or a means by which they may be calculated or ascertained: ‘‘(i) provide for transitional provisions. ‘‘(3) A failure to comply with section 48F(3) or section 48G(2)(b) to (d) does not invalidate any regulations made under this section. ‘‘48F Requirements for regulations replacing continuous disclosure listing rules ‘‘(1) This section applies if the Minister proposes to recommend regulations to declare that section 19C applies to a registered exchange. ‘‘(2) The Minister may make a recommendation under section 48E if the Minister— ‘‘(a) has had regard to the purpose of subpart 1 of Part 2, the criteria stated in section 19A, and any other matters he or she considers relevant; and ‘‘(b) is satis.ed that, over time, the continuous disclosure provisions of the registered exchange’s listing rules, or the registered exchange’s administration of those provi­sions, has not achieved the purpose of that subpart. ‘‘(3) The Minister must, before making that recommendation,— ‘‘(a) give at least 3 months’ written notice of the proposed recommendation, and of the Minister’s reasons for his or her opinion under subsection (2)(b), to— ‘‘(i) the Commission; and ‘‘(ii) the relevant registered exchange; and ‘‘(iii) any other persons that the Minister thinks are representative of the interests of persons likely to be substantially affected by the proposal; and ‘‘(b) have regard to any submissions made by those persons within the notice period given; and ‘‘(c) give at least 14 days’ written notice to the persons in paragraph (a), and in the Gazette, of his or her decision to do so and of the Minister’s reasons for his or her opinion under subsection (2)(b). ‘‘48G Ongoing requirements for continuous disclosure regulations ‘‘(1) This section applies if the Minister proposes to recommend regulations to amend, revoke, or replace regulations made under section 48E. ‘‘(2) The Minister must, before making a recommendation under section 48E,— ‘‘(a) have regard to the purpose of subpart 1 of Part 2, the criteria stated in section 19A, and any other matters he or she considers relevant; and ‘‘(b) give written notice of the proposed recommendation to— ‘‘(i) the Commission; and ‘‘(ii) the relevant registered exchange; and ‘‘(iii) any other persons that the Minister thinks are representative of the interests of persons likely to be substantially affected by the proposal; and ‘‘(c) have regard to any submissions made by those persons within the notice period given; and ‘‘(d) give at least 14 days’ written notice to the persons in paragraph (b), and in the Gazette, of his or her decision to do so. ‘‘49 Regulations concerning directors’ and of.cers’ disclosure obligations ‘‘(1) The Governor-General may, by Order in Council made on the recommendation of the Minister in accordance with subsection (2), make regulations for the purpose of— ‘‘(a) declaring any class or classes of persons not to be of.cers for the purposes of this Act: ‘‘(b) prescribing further matters relating to a relevant interest, or acquisition or disposal of a relevant interest, that must be disclosed by directors and of.cers under subpart 2 of Part 2, which may include (without limitation): ‘‘(i) the nature of the relevant interest: ‘‘(ii) the number and class of securities to which the relevant interest relates or related: ‘‘(iii) the date of the disclosure obligation becoming applicable, or the date of the acquisition or disposal: ‘‘(iv) the consideration paid or received for the acquisi­tion or disposal: ‘‘(v) details as to the circumstances in which the acquisition or disposal occurred: ‘‘(vi) the date of the last disclosure by the director or of.cer: ‘‘(c) determining when the disclosure in paragraph (b) is required (including by requiring disclosure only on request) and prescribing the form of or for, and the method of, disclosure, or providing for the relevant registered exchange to determine that form or method and for the way in which it must do so: ‘‘(d) exempting (on terms and conditions, if any) classes of persons, classes of transactions, or classes of relevant interests, acquisitions, or disposals from compliance with any directors’ and of.cers’ disclosure obligation or obligations. Struck out (unanimous) ‘‘(e) exempting (on terms and conditions, if any) persons having relevant interests in issuers that are subject to speci.ed overseas jurisdictions from compliance with any directors’ and of.cers’ disclosure obligation or obligations. ‘‘(2) The Minister must consult with the Commission before mak­ing a recommendation under subsection (1). ‘‘49A Regulations concerning substantial holding disclosure ‘‘(1) The Governor-General may, by Order in Council made on the recommendation of the Minister in accordance with subsection (3), make regulations for the purpose of— ‘‘(a) prescribing further matters relating to a matter, a rele­ vant event, or a substantial holding, that must be dis­closed under subpart 3 of Part 2, which may include (with­out limitation): ‘‘(i) the nature of the relevant interests in the substan­ tial holding (including before and after the rele­ vant event in the case of sections 23 and 24): ‘‘(ii) the number, nominal value (if any), and class of securities in which the person has or had the substantial holding (including before and after the relevant event in the case of sections 23 and 24): ‘‘(iii) the date of the relevant event: ‘‘(iv) the terms and conditions (including considera­tion) of the transaction giving rise to the relevant event: ‘‘(v) details as to the circumstances in which the rele­vant event occurred: ‘‘(vi) the date of the last disclosure by the person under that subpart in respect of the substantial holding: ‘‘(vii) information relating to the relevant event or sub­stantial holding and concerning other persons who have made disclosures under that subpart: ‘‘(b) prescribing the documents, certi.cates, and statements that must accompany or be annexed to those disclosures: ‘‘(c) determining when disclosure of the further matters referred to in paragraph (a) is required (including by requiring disclosure only on request): ‘‘(d) prescribing the form of or for, and the method of, dis­closure under that subpart (and of any other acknowl­edgments or notices required by the subpart), or provid­ing for the relevant registered exchange to determine that form or method and providing for the way in which it must do so: ‘‘(e) exempting (on terms and conditions, if any) classes of persons, classes of transactions, or classes of relevant interests, substantial holdings, or relevant events from Struck out (unanimous) ‘‘(f) exempting (on terms and conditions, if any) persons having relevant interests in issuers that are subject to speci.ed overseas jurisdictions from compliance with any substantial holding disclosure obligation or obligations. ‘‘(2) The further matters prescribed for disclosures required by section 22 or 25 may differ according to whether section (31) 30(1)(a), (b), or (d) of the Securities Legislation Act 2004 (which contains transitional provisions) applies to the disclosure or not. ‘‘(3) The Minister must consult with the Commission before mak­ing a recommendation under subsection (1). ‘‘49B Regulations concerning dealing in futures contracts ‘‘(1) The Governor-General may, by Order in Council made on the recommendation of the Minister, in accordance with subsection (3), make regulations for the purpose of— ‘‘(a) regulating the business and operations of authorised futures exchanges: ‘‘(b) regulating the carrying on of the business of dealing in futures contracts and prescribing requirements that must be met by persons dealing in those contracts including requirements relating to the disclosure of .nancial and other information and the appointment and duties of trustees: ‘‘(c) regulating the receipt of money and property from cli­ents by persons dealing in futures contracts and the application of that money and property: ‘‘(d) prescribing requirements relating to the deposit of that money and property in separate clients’ funds accounts or safe custody, as the case may be: ‘‘(e) specifying the duties and obligations of those dealers in relation to clients’ funds accounts including obligations to make payments into those accounts: ‘‘(f) providing for the protection of money deposited in cli­ents’ funds accounts and the investment of that money and property deposited in safe custody from claims against persons dealing in futures contracts: ‘‘(g) providing for the Commission to carry out functions under the regulations, and its powers and procedures in doing so. ‘‘(2) Without limiting subsection (1), regulations made under that subsection may also apply to persons acting on behalf of an authorised futures exchange in the same way that they apply to the authorised futures exchange. ‘‘(3) The Minister must consult with the Commission before mak­ing a recommendation under subsection (1). ‘‘49C Regulations concerning investment advisers and brokers ‘‘(1) The Governor-General may, by Order in Council made on the recommendation of the Minister in accordance with subsection (2), make regulations for the purpose of— ‘‘(a) prescribing any further information that must be dis­closed under section 41B or section 41H: ‘‘(b) prescribing any further contents of the disclosure state­ment and the method of disclosure under Part 4: ‘‘(c) requiring an investment adviser to— ‘‘(i) have a minimum level of professional indemnity insurance, and prescribing the amount of that minimum level; or ‘‘(ii) give an undertaking that the adviser has adequate professional indemnity insurance for the protec­tion of the persons to whom the adviser gives investment advice: ‘‘(d) exempting (on terms and conditions, if any) any person or class of persons, any class of transactions, or any class of investment advice (for example, advice given by telephone) or investment brokers services from com­pliance with any investment advisers’ or investment brokers’ disclosure obligation or obligations: New (unanimous) ‘‘(e) prescribing how information disclosed in a disclosure statement must be set out: ‘‘(f) prescribing a form for use as a disclosure statement. ‘‘49D Other regulations ‘‘(1) The Governor-General may, by Order in Council made on the recommendation of the Minister in accordance with subsection (3), make regulations for the purpose of— ‘‘(a) exempting (on terms and conditions, if any) anything from being dealings in securities for the purposes of the general dealing misconduct prohibition: ‘‘(b) exempting (on terms and conditions, if any) conduct from being— ‘‘(i) insider conduct, that is conduct that would other­ wise fall within section 8C or section 8D or section 8E: ‘‘(ii) market manipulation, that is conduct that would otherwise fall within section 11 or section 11B: ‘‘(c) requiring information to be provided in a notice under section 36ZD: ‘‘(d) prescribing fees and charges to be paid for the purposes of this Act, or a means by which fees and charges may be calculated or ascertained: ‘‘(e) providing for any other matters contemplated by this Act, necessary for its administration, or necessary for giving it full effect. ‘‘(2) Without limiting subsection (1)(d), regulations made under that paragraph may— ‘‘(a) authorise the Commission to require payment of fees and charges— ‘‘(i) in connection with the exercise by the Commis­ sion of any power or function conferred on it by or under this Act: ‘‘(ii) on an application to the Commission to exercise any power or function conferred on it by or under this Act: ‘‘(iii) from a person for advice provided by the Com­mission to the Minister on the exercise of the Minister’s powers or functions in connection with that person under this Act: ‘‘(b) authorise the Commission to require payment of any costs incurred by the Commission. ‘‘49E Breach of exemption conditions The breach of a term or condition of an exemption provided by regulations made under this Act or by notice under section 48 is a breach of the obligation for which the exemption applies. New (unanimous) ‘‘49F Regulations or exemptions in respect of speci.ed overseas jurisdictions Without limiting sections 48 to 49D, exemptions made under those sections or under regulations made under those sections may extend to all, or classes of, persons, transactions, or other matters in relation to speci.ed overseas jurisdictions.’’ Miscellaneous 29 Related amendments The enactments speci.ed in (the Schedule) Schedule 2 are amended in the manner set out in that schedule. 30 Transitional provisions relating to new subpart 3 (1) The following transitional provisions apply to the commence­ ment of new subpart 3 (commencement): (a) a person who, immediately before commencement, was a substantial security holder under old section 20 of the principal Act is not required to disclose that fact (or any of their existing substantial holdings) by new section 22 (but see paragraph (e)): (b) a person who begins to have a substantial holding only as a result of the commencement of new subpart 3 (for example, because of changes to the meaning of substan­ tial security holder) must disclose that fact in accor­ dance with new section 22 (except that disclosure is not required until the expiry of 14 days after commencement): (c) new sections 23 and 24 apply only to a movement or change that occurs on or after commencement: 136 (d) a person who ceases to have a substantial holding only as a result of the commencement of new subpart 3 must disclose that fact in accordance with new section 25 (except that disclosure is not required until the expiry of 14 days after commencement): (e) old subpart 3 and the rest of the Securities Markets Act 1988 continues to apply as they did immediately before commencement for the purposes of any disclosure required by old subpart 3 before commencement. (2) In this section, new section or new subpart means the section or subpart inserted by section 27 of this Act, and old section or old subpart means the section or subpart as they were imme­diately before commencement. 31 Transitional provision for existing offences and contravention (1) This section applies to an offence committed under, or a contravention of,— (a) subpart 3 of Part 2 of the principal Act, or the Securities (Substantial Security Holders) Regulations 1997, before the commencement of section 26; and (b) the Investment Advisers (Disclosure) Act 1996 before the commencement of section 27(2); and (c) the principal Act, or any regulations in force under it, (other than the subpart and regulations speci.ed in para­graph (a)) before (1 November 2005) the commencement of this section. (2) The Investment Advisers (Disclosure) Act 1996 and the prin­cipal Act, and the regulations in force under the principal Act, continue to have effect as if they had not been amended, repealed, or revoked by this subpart for the purpose of— (a) investigating an offence or contravention to which this section applies: (b) commencing or completing proceedings for an offence or contravention to which this section applies: (c) imposing a penalty or other remedy, or making an order, in relation to an offence or contravention to which this section applies. Amendments to Takeovers Act 1993 32 Takeovers Act 1993 called principal Act in this Part In this Part, the Takeovers Act 19933 is called ‘‘the principal Act’’. 3 1993 No 107 33 Interpretation (1) Section 2(1) of the principal Act is amended by repealing the de.nition of company, and substituting the following de.nition: ‘‘company has the same meaning as in section 2(1) of the Companies Act 1993’’. Struck out (unanimous) (2) Section 2(1) of the principal Act is amended by omitting, from paragraph (b) of the de.nition of speci.ed company, the words ‘‘and $20,000,000 or more of assets’’. New (unanimous) (2) Section 2(1) of the principal Act is amended by repealing the de.nition of speci.ed company, and substituting the follow­ing de.nition: ‘‘speci.ed company means a company that— ‘‘(a) is a party to a listing agreement with a registered exchange and that has securities that confer voting rights quoted on the registered exchange’s market; or ‘‘(b) was within paragraph (a) at any time during a period speci.ed in the takeovers code (being a period not exceeding 12 months before any date or the occurrence of any event referred to in the code); or ‘‘(c) has 50 or more shareholders’’. (2A) Section 2(1) of the principal Act is amended by inserting, in their appropriate alphabetical order, the following de.nitions: ‘‘quoted, in relation to securities of a person, means securities of the person that are approved for trading on a registered exchange’s market (and, for the avoidance of doubt, securities do not cease to be quoted merely because trading in those securities is suspended) ‘‘voting right means a currently exercisable right to cast a vote at meetings of shareholders of a company, not being a right to vote that is exercisable only in 1 or more of the following circumstances: ‘‘(a) during a period in which a payment or distribution (or part of a payment or distribution) in respect of the security that confers the voting right is in arrears or some other default exists: ‘‘(b) on a proposal that affects rights attached to the security that confers the voting right: ‘‘(c) on a proposal to put the company into liquidation: ‘‘(d) on a proposal for the disposal of the whole, or a material part, of the property, business, and undertaking of the company: ‘‘(e) during the liquidation of the company: ‘‘(f) in respect of a special, immaterial, or remote matter that is inconsequential to control of the company.’’ (2B) Section 2 of the principal Act is amended by repealing the de.nition of public issuer. (3) Section 2 of the principal Act is amended by adding, as subsections (2) and (3), the following subsections: ‘‘(2) In sections 32, 33, and 33AA and in subpart 2 of Part 3 (which contain the enforcement powers of the Panel and Court), unless the context otherwise requires, a reference to a person who has contravened the takeovers code or not acted in compliance with the takeovers code is a reference to a person who— ‘‘(a) has contravened the takeovers code or a term or condi­ tion of an exemption from the takeovers code; or ‘‘(b) has attempted to contravene the takeovers code or a term or condition of an exemption from the takeovers code; or ‘‘(c) has aided, abetted, counselled, or procured any other person to contravene the takeovers code or a term or condition of an exemption from the takeovers code; or Part 2 cl 33 Securities Legislation ‘‘(d) has induced, or attempted to induce, any other person, whether by threats or promises or otherwise, to contra­ vene the takeovers code or a term or condition of an exemption from the takeovers code; or ‘‘(e) has been in any way, directly or indirectly, knowingly concerned in, or a party to, the contravention by any other person of the takeovers code or a term or condi­ tion of an exemption from the takeovers code; or ‘‘(f) has conspired with any other person to contravene the takeovers code or a term or condition of an exemption from the takeovers code. New (unanimous) ‘‘(3) For the purposes of this Act, unless the context otherwise requires, associated persons or persons associated with each other have the same meaning as in section 2(2) of the Securities Markets Act 1988.’’ 34 Object of this Act Section 4 of the principal Act is amended by inserting, after paragraph (c), the following paragraph: ‘‘(ca) provide criminal liability for false or misleading state­ments or information in relation to takeovers of speci­.ed companies:’’. New (unanimous) 34A Delegation of certain powers by Panel Section 14(1) of the principal Act is amended by inserting, after the word ‘‘sections’’, the expression ‘‘31A,’’. 34B New section 15B inserted The principal Act is amended by inserting, after section 15A, the following section: ‘‘15B Sharing of information with Commerce Commission ‘‘(1) The Panel may communicate to the Commerce Commission any information that the Panel— ‘‘(a) holds in relation to the exercise of the Panel’s powers, or the performance of its functions and duties; and ‘‘(b) considers may assist the Commerce Commission in the exercise of the Commerce Commission’s powers, or the performance of its functions and duties, in respect of the Fair Trading Act 1986. ‘‘(2) The Panel may use any information communicated to it by the Commerce Commission under section 48A of the Fair Trading Act 1986 in the Panel’s exercise of its powers, or the perform­ance of its functions and duties. ‘‘(3) This section applies despite anything to the contrary in any enactment, contract, deed, or document.’’ 35 New heading inserted The principal Act is amended by inserting, after the Part 3 heading, the heading ‘‘Subpart 1—Investigation and enforce­ment by Panel’’. 36 New sections 31L to 31MA substituted The principal Act is amended by repealing sections 31L and 31M, and substituting the following sections: ‘‘31L Who may receive evidence ‘‘(1) The Panel may receive evidence through a member, of.cer, or employee of the Panel, or any 2 or more of them. ‘‘(2) However, if a person who is summoned to give evidence under section 31N requests that the evidence be received (by) at a meeting of the Panel, then— ‘‘(a) subsection (1) does not apply, and the evidence must be received at a meeting of the Panel; and ‘‘(b) the meeting must not be held by a method under clause (4(2A)(b) of the Schedule) 8(b) of Schedule 5 of the Crown Entities Act 2004 except with the consent of the person summoned. ‘‘31M Admissibility of evidence The Panel may receive in evidence, whether admissible in a court of law or not, any statement, document, information, or matter that,— ‘‘(a) in the opinion of the person receiving it, may assist the Panel in dealing effectively with any matter before it; or 141 ‘‘(b) the Panel may receive under section 31P. ‘‘31MA How evidence may be given ‘‘(1) The Panel may receive evidence— ‘‘(a) given on oath: ‘‘(b) given not on oath: ‘‘(c) if the person receiving the evidence permits it, given by a written statement: ‘‘(d) if the person receiving the evidence thinks it is appro­priate, given by a written statement veri.ed on oath: ‘‘(e) given by audio-visual communication, if the Panel and the person giving the evidence agree. ‘‘(2) A member, of.cer, or an employee of the Panel may adminis­ter an oath for the purpose of a person giving evidence on oath.’’ 37 Power to summon witnesses (1) Section 31N of the principal Act is amended by repealing subsection (1), and substituting the following subsection: ‘‘(1) A member of the Panel may issue a summons to a person requiring that person to appear (in the case of a body corpo­ rate, to appear by its authorised representative) before the Panel, or a member, of.cer, or employee of the Panel, in relation to any matter before the Panel and to do any of the following things: ‘‘(a) give evidence: ‘‘(b) give evidence under oath: ‘‘(c) provide any documents or information that are (now) in the person’s possession or control and that are relevant to the matter.’’ (2) Section 31N(2)(c) of the principal Act is amended by omitting the words ‘‘he or she’’, and substituting the words ‘‘the person’’. (3) Section 31N of the principal Act is amended by repealing subsection (3), and substituting the following subsection: ‘‘(3) A summons may be served— ‘‘(a) in the case of a natural person, by delivering it person­ ally to the person summoned or by leaving it at his or her usual place of residence or business at least 24 hours before his or her attendance is required: ‘‘(b) in the case of a body corporate, by leaving it at the body corporate’s usual place of business at least 24 hours before its attendance is required.’’ 38 Panel’s powers in respect of compliance with takeovers code (1) Section 32(2) of the principal Act is amended by inserting, before the word ‘‘restraining’’, the word ‘‘temporary’’. (2) Section 32 of the principal Act is amended by inserting, after subsection (3), the following subsection: ‘‘(3A) If the Panel makes a determination under subsection (3), the Panel must, as soon as reasonably practicable, give written notice of its reasons for the determination to the person the determination concerns.’’ (3) Section 32(4) of the principal Act is amended by inserting, before the word ‘‘restraining’’ wherever it occurs, the word ‘‘temporary’’ in each case. (4) Section 32(4) of the principal Act is amended by adding the following paragraphs: ‘‘(c) make a permanent compliance order (relating to the non-compliance with the takeovers code): ‘‘(d) if it makes any (other) order under this subsection, also make an order extending, for a reasonable time, the period for which a takeover offer must remain open.’’ (5) Section 32 of the principal Act is amended by inserting, after subsection (4), the following subsection: ‘‘(4A) If the Panel makes an order under this section, the Panel— ‘‘(a) must immediately give written notice to the person to whom the order is directed of the terms and conditions of the order; and ‘‘(b) must, as soon as is reasonably practicable, also give that person written notice of the reasons for the order; and ‘‘(c) may also give notice to any other person of those matters.’’ (6) Section 32(5) of the principal Act is amended by omitting the words ‘‘A restraining order’’, and substituting the words ‘‘An order’’. (7) Section 32(6) and (7) of the principal Act is amended by omitting the word ‘‘restraining’’ in each place where it occurs. 39 Restraining orders (1) The heading to section 33 of the principal Act is amended by omitting the word ‘‘Restraining’’, and substituting the words ‘‘Temporary restraining’’. (2) Section 33 of the principal Act is amended by inserting, before the .rst use of the word ‘‘restraining’’, the word ‘‘temporary’’. (3) Section 33 of the principal Act is amended by repealing para­graph (d), and substituting the following paragraph: ‘‘(d) restraining a person from taking any action (including from making any statement or distributing any docu­ment) that is or that may reasonably be expected to constitute a contravention of the takeovers code (see section 2(2) for the de.nition of contravention of the takeovers code):’’. 40 New section 33AA inserted The principal Act is amended by inserting, after section 33, the following section: ‘‘33AA Permanent compliance orders For the purposes of section 32, a permanent compliance order is an order for one or more of the following: ‘‘(a) prohibiting or restricting a person from making any statement or distributing any document that is or that may reasonably be expected to constitute a contraven­tion of the takeovers code (see section 2(2) for the de.ni­tion of contravention of the takeovers code): ‘‘(b) directing a person to disclose in accordance with the order information for the purpose of securing compli­ance with the takeovers code: ‘‘(c) directing a person to publish, at the person’s own expense, in the manner and at the times speci.ed in the order corrective statements that are speci.ed in, or are to be determined in accordance with, the order: ‘‘(d) for the purpose of securing compliance with any of those orders, an order directing a person to do or refrain from doing a speci.ed act.’’ 40A New section 33C substituted The principal Act is amended by repealing section 33C, and substituting the following section: ‘‘33C Restrictions on use of self-incriminating statements obtained by summons ‘‘(1) A self-incriminating statement made orally by a person sum­moned under section 31N (whether or not the statement is recorded in writing) in the course of answering any question before, or providing any information or document to, the Panel, or a member, of.cer, or employee of the Panel,— ‘‘(a) subject to paragraph (b), is not admissible in— ‘‘(i) criminal proceedings against that person; or ‘‘(ii) proceedings under this Act, the Securities Act 1978, or the Securities Markets Act 1988 for a pecuniary penalty order against that person; but ‘‘(b) is admissible against that person in any proceeding in respect of the falsity of the person’s testimony, for example, in a prosecution for perjury or for an offence under section 44(1). ‘‘(2) In addition,— ‘‘(a) a refusal or failure to answer a question or provide information or a document or comply with any other requirement may be used in evidence against that per­son in proceedings for an offence under section 44(1) arising from that refusal or failure; and ‘‘(b) the answering of a question in a way that is false, deceptive, or misleading or the providing of informa­tion or a document that is false, deceptive, or mislead­ing may be used in evidence against that person in proceedings for an offence under section 44(1) arising from that act.’’ 41 Heading above section 33E and sections 33E and 34 repealed The principal Act is amended by repealing the heading above section 33E, and sections 33E and 34. 42 New subpart 2 inserted The principal Act is amended by inserting, before section 35, the following subpart: ‘‘Subpart 2—Enforcement by Court ‘‘Overview of enforcement powers and civil remedies ‘‘33E Overview of enforcement powers and civil remedies ‘‘(1) The following enforcement orders and remedies (civil rem­edy orders) (may be) are available under this subpart for a contravention of the takeovers code: ‘‘(a) an injunction: ‘‘(b) a civil remedy order under section 33I: ‘‘(c) a compensatory order: ‘‘(d) a pecuniary penalty order and declaration of contraven­tion (on application by the Panel only). Struck out (unanimous) ‘‘(2) Section 43 covers how those orders interrelate with each other. ‘‘(3) See section 2(2) for the de.nition of contravention of the take­overs code in this subpart. ‘‘(4) This section is a guide only to the general scheme and effect of this subpart. ‘‘Injunctions ‘‘33F What Court may injunct The Court may, on application by any person in accordance with section 35, grant an injunction restraining a person from engaging in conduct that constitutes or would constitute a contravention of the takeovers code. ‘‘33G When Court may grant injunctions and interim injunctions ‘‘(1) The Court may grant an injunction restraining a person from engaging in conduct of a particular kind if— ‘‘(a) it is satis.ed that the person has engaged in conduct of that kind; or ‘‘(b) it appears to the Court that, if an injunction is not granted, it is likely that the person will engage in con­duct of that kind. ‘‘(3) Subsections (1)(a) and (2) apply whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind. ‘‘(4) Subsections (1)(b) and (2) apply whether or not the person has previously engaged in conduct of that kind or there is an imminent danger of substantial damage to any other person if that person engages in conduct of that kind. ‘‘33H Undertaking as to damages not required by Panel ‘‘(1) If the Panel applies to the Court for the grant of an interim injunction under this subpart, the Court must not, as a condi­tion of granting an interim injunction, require the Panel to give an undertaking as to damages. ‘‘(2) However, in determining the Panel’s application for the grant of an interim injunction, the Court must not take into account that the Panel is not required to give an undertaking as to damages. ‘‘Various civil remedy orders ‘‘33I When Court may make various civil remedy orders The Court may, on application by any person in accordance with section 35, make 1 or more of the civil remedy orders described in section 33J if the Court is satis.ed on reasonable grounds that a person has contravened or is contravening or intends to contravene the takeovers code. ‘‘33J Terms of various civil remedy orders A civil remedy order under section 33I may— ‘‘(a) restrain the exercise of rights attaching to securities or declare an exercise of those rights to be void and of no effect: ‘‘(b) restrain the issue or allotment of securities or restrain any distribution due in relation to securities: ‘‘(c) restrain the acquisition or disposal of securities or of interests in or rights relating to them or restrain the registration of any transfer of that kind: ‘‘(d) direct the disposal of securities or of interests in or rights relating to them (including the person or class of persons to which they must, or must not, be disposed of) and direct the payment of the proceeds of any disposal: ‘‘(e) require securities to be forfeited and require the public issuer to cancel the forfeited securities: ‘‘(f) cancel an agreement for the acquisition or disposal of securities or interests in or rights relating to them: ‘‘(g) vest securities or interests in or rights relating to them in a trustee for sale on the terms and conditions the Court thinks .t: ‘‘(h) declare an agreement for the acquisition of securities or interests in or rights relating to them to be voidable at the option of the person from whom the securities or interests or rights were acquired: ‘‘(i) if a contract is entered into in contravention of the takeovers code, or a contract contains a provision which, if given effect to, would contravene the take­overs code,— ‘‘(i) vary the contract, in such manner as the Court thinks .t: ‘‘(ii) cancel the contract: ‘‘(iii) require any person who is a party to the contract to make restitution or pay compensation to any other person who is a party to the contract: ‘‘(j) prohibit or restrict a person from making any statement or distributing any document that is or that may reason­ably be expected to constitute a contravention of the takeovers code: ‘‘(k) direct a person to disclose in accordance with the order information for the purpose of securing compliance with the takeovers code even though the time for doing so may have expired: ‘‘(l) direct a person to publish, at the person’s own expense, in the manner and at the times speci.ed in the order corrective statements that are speci.ed in, or are to be determined in accordance with, the order: ‘‘(m) require a person to comply with any provision of the takeovers code even though the time for doing so may have expired. ‘‘(n) for the purpose of securing compliance with any other order described in this section, direct a person to do or refrain from doing a speci.ed act. ‘‘Compensatory orders ‘‘33K When Court may make compensatory orders ‘‘(1) The Court may make a compensatory order, on application by any person in accordance with section 35, if the Court is satis.ed that— ‘‘(a) there is a contravention of the takeovers code; and ‘‘(b) a person (the aggrieved person) has suffered, or is likely to suffer, loss or damage because of the contravention. ‘‘(2) The Court may make a compensatory order whether or not the aggrieved person is a party to the proceedings. ‘‘33L Terms of compensatory orders ‘‘(1) If section 33K applies, the Court may make any order it thinks just to compensate an aggrieved person in whole or in part for the loss or damage, or to prevent or reduce that loss or dam­age, including an order (without limitation) to— ‘‘(a) direct the person in contravention to pay to the aggrieved person the amount of the loss or damage: ‘‘(b) direct the person in contravention to refund money or return property to the aggrieved person: ‘‘(c) if a contract has been entered into between the person in contravention and the aggrieved person,— ‘‘(i) vary the contract or any collateral arrangement as speci.ed in the order and, if the Court thinks .t, declare the contract or arrangement to have had effect as so varied on and after a date before the order was made, as speci.ed in the order: ‘‘(ii) cancel the contract and, if the Court thinks .t, declare the cancellation to have had effect on and after a date before the order was made, as speci­ .ed in the order: ‘‘(iii) require the person in contravention to take any action the Court thinks .t to reinstate the parties ‘‘(2) The Court may, if the proceedings were brought or conducted (in whole or part) by the Panel, direct that the Panel’s costs in conducting the proceedings be paid from any amounts recov­ered under a compensatory order. ‘‘(3) Subsection (2) does not limit section 44F. ‘‘Pecuniary penalty orders and declarations of contravention ‘‘33M When Court may make pecuniary penalty orders and declarations of contravention If the Panel applies for a pecuniary penalty order against a person under this Act in accordance with section 35, the Court— ‘‘(a) must determine whether the person has contravened the takeovers code; and ‘‘(b) must make a declaration of contravention (see sections 33N and 33O) if satis.ed (that there is a contravention) of that matter; and ‘‘(c) may order the person to pay a pecuniary penalty that the Court considers appropriate to the Crown (see sections 33P and 33Q) if satis.ed (that there is a contravention) of that matter, that the person knew or ought to have known of the conduct that constituted the contraven­tion, and that the contravention— ‘‘(i) materially prejudices the interests of offerees, the speci.ed company, the offeror or acquirer, com­ peting offerors, or any other person involved in or affected by a transaction or step that is or will be regulated by the takeovers code, or that is inci­ dental or preliminary to a transaction or step of that kind; or ‘‘(ii) is likely to materially damage the integrity or reputation of any of New Zealand’s securities markets; or ‘‘(iii) is otherwise serious. ‘‘33N Purpose and effect of declarations of contravention ‘‘(1) The purpose of a declaration of contravention is to enable an applicant for a civil remedy order under section 33I or a com­pensatory order to rely on the declaration of contravention in ‘‘33O What declarations of contravention must state A declaration of contravention must state the following: ‘‘(a) the court that made the declaration; and ‘‘(b) the provision of the takeovers code to which the contra­ vention relates or, if the contravention is of an exemp­tion, both the term or condition contravened and the takeovers code provision to which the exemption relates; and ‘‘(c) the person in contravention; and ‘‘(d) the conduct that constituted the contravention and, if a transaction constituted the contravention, the transac­tion; and ‘‘(e) the speci.ed company to which the conduct related. ‘‘33P Maximum amount of pecuniary penalty The maximum amount of a pecuniary penalty is $500,000 for an individual and $5,000,000 for a body corporate, for each contravention. ‘‘33Q Considerations for Court in determining pecuniary penalty In determining an appropriate pecuniary penalty, the Court must have regard to all relevant matters, including— ‘‘(a) the objectives of the takeovers code; and ‘‘(b) the nature and extent of the contravention; and ‘‘(c) the likelihood, nature, and extent of any damage to the integrity or reputation of any of New Zealand’s securi­ties markets because of the contravention; and ‘‘(d) the nature and extent of any loss or damage suffered by a person referred to in section 33M(c)(i) because of the contravention; and ‘‘(e) the circumstances in which the contravention took place; and ‘‘(f) whether or not the person in contravention has pre­viously been found by the Court in proceedings under this Act to have engaged in any similar conduct. ‘‘General’’. 43 Persons who may apply (1) Section 35(1) of the principal Act is amended by omitting the words ‘‘section 34 of this Act’’, and substituting the words ‘‘section 33F, 33I, or 33K’’. (2) Section 35(3) of the principal Act is amended by omitting the words ‘‘section 34 of this Act’’, and substituting the words ‘‘section 33F, 33I, or 33K’’. Struck out (unanimous) (3) Section 35 of the principal Act is amended by inserting, after subsection (3), the following subsection: ‘‘(3A) If the Panel makes a determination under section 32(3)(b) (a determination that the Panel is not satis.ed that a person has acted or is acting or intends to act in compliance with the takeovers code), the Panel may make an application to the Court under section 33M.’’ New (unanimous) (3) Section 35 of the principal Act is amended by repealing sub­section (4), and substituting the following subsection: ‘‘(4) If the Panel makes a determination under section 32(3)(b) (a determination that the Panel is not satis.ed that a person has acted or is acting or intends to act in compliance with the takeovers code), the Panel may make an application to the Court under section 33M.’’ 44 Repeal of sections 36 and 37 The principal Act is amended by repealing sections 36 and 37. 152 Securities Legislation Part 2 cl 48 45 Court may have regard to determinations and recommendations by Panel (1) Section 38(1) of the principal Act is amended by omitting the words ‘‘section 34 of this Act’’, and substituting the words ‘‘this subpart’’. (2) Section 38(2) of the principal Act is amended by omitting the words ‘‘section 36 of this Act’’, and substituting the words ‘‘section 33I or 33K’’. 46 (Section) Sections 39 and 40 repealed The principal Act is amended by repealing (section) sections 39 and 40. Struck out (unanimous) 47 Revocation, variation, and suspension of orders Section 40 of the principal Act is amended by omitting the words ‘‘under section 36 or section 37 of this Act’’, and substituting the words ‘‘made by the Court under this subpart’’. 48 New section 41 substituted The principal Act is amended by repealing section 41, and substituting the following section: ‘‘41 Court may excuse contravention ‘‘(1) If the Court is satis.ed that a person has, by any act or omission, contravened the takeovers code, but that the contra­ vention ought to be excused, the Court may (by order) declare that the act or omission was not a contravention of the code. ‘‘(2) In considering whether the contravention should be excused, the Court may have regard to— ‘‘(a) inadvertence or mistake on the part of the person concerned: ‘‘(b) whether the person was aware of a relevant factor or circumstance: ‘‘(c) circumstances beyond that person’s control: ‘‘(d) any other matters that the Court thinks .t. ‘‘(3) The order has effect according to its tenor.’’ 153 ‘‘(4) This section does not apply to a contravention that the Court considers in an application for a pecuniary penalty order or a compensatory order against a person under this Act.’’ 49 Court may require person to give evidence or produce documents relating to interests in securities (1) Section 42(1) of the principal Act is amended by omitting the words ‘‘section 34 of this Act’’, and substituting the words ‘‘this subpart’’. (2) Section 42(2) of the principal Act is amended by omitting the words ‘‘section 34 of this Act’’, and substituting the words ‘‘this subpart’’. 50 New sections 43 to (43C) 44J substituted The principal Act is amended by repealing section 43, and substituting the following sections: ‘‘43 (Interrelationship of) More than 1 civil remedy (orders) order may be made for same conduct The Court may make a civil remedy order of one kind against a person even though the Court has made another civil remedy order of a different kind against the person for the same conduct. Examples The Court may make a compensatory order and a pecuniary penalty order for the same conduct. The Court may make a civil remedy order requiring forfeiture of securities and declaring a previous exercise of voting rights attaching to those securities to be void. Struck out (unanimous) ‘‘(2) However, in determining whether to make a civil remedy order (order A) and, if it is made, its amount or effect, the Court must have regard to— ‘‘(a) whether another civil remedy order (order B) has been imposed on the person for a contravention involving the conduct concerned in the application for order A; and ‘‘(b) if so, the amount or effect of order B. ‘‘43A Only one pecuniary penalty order may be made for same conduct If conduct by a person constitutes a contravention of 2 or more provisions of the takeovers code, proceedings may be brought against that person for the contravention of any one or more of the provisions, but no person is liable to more than one pecu­niary penalty order for the same conduct. ‘‘43B Standard of proof for civil remedies The proceedings under this subpart are civil proceedings and the usual rules of the Court and rules of evidence and proce­ dure for civil proceedings apply (including the standard of proof). ‘‘43C Time limit for applying for civil remedies ‘‘(1) An application for a civil remedy order under section 33I or a pecuniary penalty order under section 33M may be made at any time within 2 years after the date on which the matter giving rise to the contravention was discovered or ought reasonably to have been discovered. ‘‘(2) The usual time limits apply to all applications for other civil remedy orders. New (unanimous) ‘‘(3) However, an application for a compensatory order in respect of a contravention may be made at any time within 6 months after the date on which a declaration of contravention is made, even if the usual time limit has expired.’’ 51 New heading and subparts 3, 3A, and 4 inserted The principal Act is amended by repealing section 44, and substituting the following heading and subparts: 155 ‘‘General offences ‘‘44 General offences ‘‘(1) A person must not— ‘‘(a) furnish information, produce a document, or give evi­dence to the Panel or a member, of.cer, or employee of the Panel knowing it to be false or misleading; or ‘‘(b) attempt to deceive or knowingly mislead the Panel or a member, of.cer, or employee of the Panel in relation to any matter before it. ‘‘(2) A person who has been summoned to appear before the Panel or a member, of.cer, or employee of the Panel must not, without reasonable excuse— ‘‘(a) refuse or fail to appear before the Panel to give evidence: ‘‘(b) refuse to take an oath or af.rmation as a witness: ‘‘(c) refuse to answer any question: ‘‘(d) fail or refuse to (produce) provide any document or information that the person is required to provide. ‘‘(3) A body corporate contravenes subsection (2)(b) or subsection (2)(c) if its representative appearing for it refuses to take an oath or af.rmation as a witness, or refuses to answer any question. ‘‘(4) A person must not act in contravention of any order made by the Panel under section 31X or section 32. ‘‘(5) Every person who contravenes this section commits an offence and is liable on summary conviction to a .ne not exceeding $300,000 and, if the offence is a continuing one, to a further .ne not exceeding $10,000 for every day or part of a day during which the offence is committed. ‘‘(6) A person must not be convicted of an offence under this section if, in the opinion of the court dealing with the case,— ‘‘(a) the contravention related to matters that were immate­rial to the relevant matter before the Panel; or ‘‘(b) the contravention ought reasonably to be excused, hav­ing regard to all the circumstances of the case. ‘‘(7) A director of a body corporate must not be convicted of an offence under this section in relation to a contravention by the body corporate if, in the opinion of the court dealing with the case, the contravention took place without the director’s knowledge and consent. ‘‘False or misleading statement or information ‘‘44B False or misleading statement or information ‘‘(1) A person must not make a statement or disseminate informa­tion, in relation to any transaction or event regulated by the takeovers code or incidental or preliminary to a transaction or event that is or is likely to be regulated by the takeovers code, if— ‘‘(a) a material aspect of the statement or information is false or the statement or information is materially mislead­ing; and ‘‘(b) the person knows or ought reasonably to know that a material aspect of the statement or information is false or that the statement or information is materially mis­leading; and ‘‘(c) the statement or information is likely to— ‘‘(i) induce a person to trade, or hold, the securities of a speci.ed company; or ‘‘(ii) have the effect of increasing, reducing, maintain­ing, or stabilising the price for trading in those securities. ‘‘(2) In this section, trade means to acquire or dispose of securities. ‘‘44C Criminal liability for false or misleading statement or information ‘‘(1) A person who contravenes section 44B commits an offence if the person has actual knowledge that the statement or infor­mation is false in a material aspect or is materially misleading. ‘‘(2) A person who commits an offence against subsection (1) is liable on conviction on indictment to— ‘‘(a) in the case of an individual, imprisonment for a term not exceeding 5 years or a .ne not exceeding ($100,000) $300,000, or to both: ‘‘(b) in the case of a body corporate, a .ne not exceeding ($300,000) $1,000,000. ‘‘44D Exception for disclosure by investment advisers or brokers Section 44B does not apply to conduct in relation to a disclo­sure under Part 4 of the Securities Markets Act 1988 or to conduct in relation to an advice advertisement, a broker adver­tisement, or a product advertisement to the extent that that conduct is regulated by Part 4 of that Act. New (unanimous) ‘‘44DAA Fair Trading Act 1986 excluded The Fair Trading Act 1986 does not apply to conduct in relation to any transaction or event regulated by the takeovers code or incidental or preliminary to a transaction or event that is or is likely to be regulated by the takeovers code. ‘‘Subpart 3A—Other Court orders ‘‘Management bans ‘‘44DA When Court may make management banning orders ‘‘(1) The Court may, on application by an entitled person, make a management banning order against a person (A) if— ‘‘(a) A has been convicted of an offence against either section 44 or section 44C or a pecuniary penalty order has been made against A under this Act for a contravention of the takeovers code; or ‘‘(b) A has, while a director of an incorporated or unincorpo­rated body,— ‘‘(i) persistently contravened this Act, the Companies Act 1993, the Securities Markets Act 1988, the Securities Act 1978, or the takeovers code; or ‘‘(ii) if the incorporated or unincorporated body has so contravened, persistently failed to take all reason­able steps to obtain compliance with those Acts or the code; or ‘‘(c) A has been prohibited in an overseas jurisdiction from carrying on activities that the Court is satis.ed are sub­stantially similar to any of the activities referred to in section 44DB in connection with a contravention of any law relating to takeovers. ‘‘(2) An entitled person is— ‘‘(a) the Panel: ‘‘(b) any person referred to in section 35(1)(b) to (g). ‘‘44DB Terms of management banning orders A management banning order may, for a period stated in the order of 10 years or less, prohibit or restrict the person (with­out the leave of the Court) from being a director or promoter of, or in any way (whether directly or indirectly) being con­cerned or taking part in the management of, an incorporated or unincorporated body (other than an overseas company, or an incorporated or unincorporated body, that does not carry on business in New Zealand). ‘‘44DC Offence of contravening management banning order An individual who acts in contravention of a court order under section 44DB commits an offence and is liable on conviction on indictment to imprisonment for a term not exceeding 3 years or to a .ne not exceeding $100,000, or to both. ‘‘44DD Only one management banning order may be made for same conduct If conduct by a person constitutes grounds for making an order under any 1 or more of section 44DA of this Act, section 60A of the Securities Act 1978, section 43F of the Securities Mar­kets Act 1988, and section 383 of the Companies Act 1993, proceedings may be brought against that person under any 1 or more of those provisions, but no person is liable to more than 1 order under those provisions for the same conduct. ‘‘44DE Persons automatically banned from management ‘‘(1) This section applies to a person if the person has been con­victed of an offence against either section 44 or section 44C or a pecuniary penalty order has been made against the person under this Act for a contravention of the takeovers code. ‘‘(2) The person must not, for the period of 5 years after the conviction or making of the order (without the leave of the Court) be a director or promoter of, or in any way (whether directly or indirectly) be concerned or take part in the manage­ment of, an incorporated or unincorporated body (other than an overseas company, or an incorporated or unincorporated body, that does not carry on business in New Zealand). ‘‘(3) An individual who acts in contravention of this section com­mits an offence and is liable, on conviction on indictment to imprisonment for a term not exceeding 3 years or to a .ne not exceeding $100,000, or to both. ‘‘44DF Panel must be noti.ed of application to depart from management banning order A person intending to apply for the leave of the Court under section 44DB or section 44DE must give to the Panel not less than 10 working days’ written notice of that person’s intention to apply. ‘‘Orders to preserve assets to satisfy claims ‘‘44DG When Court may prohibit payment or transfer of money, securities, or other property ‘‘(1) This section applies if— ‘‘(a) an investigation is being carried out under this Act in relation to an act or omission by a person, being an act or omission that constitutes or may constitute a contra­vention of this Act or the takeovers code; or ‘‘(b) a prosecution has begun against a person for a contra­vention of this Act; or ‘‘(c) a civil proceeding has begun against a person under this Act. ‘‘(2) The Court may, on application by the Panel or by an aggrieved person, make 1 or more of the orders listed in section 44DH if the Court considers it necessary or desirable to do so for the purpose of protecting the interests of an aggrieved person. ‘‘(3) In this section,— ‘‘aggrieved person means any person to whom a relevant person is liable ‘‘liable means liable, or may be or become liable, to pay money (whether in respect of a debt, by way of damages or compensation, or otherwise) or to account for securities or other property ‘‘relevant person means a person referred to in subsection (1). Compare: Section 1323(1), Corporations Act 2001 (Aust.) ‘‘(1) The orders that may be made under section 44DG are— ‘‘(a) an order prohibiting the relevant person from transfer­ring, charging, or otherwise dealing with money, secur­ities, or other property held or controlled by the relevant person: ‘‘(b) an order prohibiting a person who is indebted to the relevant person or to an associated person of the rele­vant person from making a payment in total or partial discharge of the debt to, or to another person at the direction or request of, the person to whom the debt is owed: ‘‘(c) an order prohibiting a person holding money, securities, or other property, on behalf of the relevant person, or on behalf of an associated person of the relevant person, from paying all or any of the money, or transferring, or otherwise parting with possession of, the securities or other property, to, or to another person at the direction or request of, the person on whose behalf the money, securities, or other property, is or are held: ‘‘(d) an order prohibiting the taking or sending out of New Zealand by a person of money of the relevant person or of an associated person of the relevant person: ‘‘(e) an order prohibiting the taking, sending, or transfer by a person of securities or other property of the relevant person, or of an associated person of the relevant person from a place in New Zealand to a place outside New Zealand (including the transfer of securities from a register in New Zealand to a register outside New Zealand): ‘‘(f) an order requiring the relevant person, or any person holding money, securities, or other property on behalf of the relevant person or an associated person of the relevant person, to pay or transfer money, securities, or other property to a speci.ed person to be held on trust pending determination of the investigation, prosecu­tion, or civil proceeding: ‘‘(g) an order appointing,— ‘‘(i) if the relevant person is a natural person, a receiver or trustee, having any powers that the Court orders, of the property or of part of the property of that person; or ‘‘(ii) if the relevant person is a body corporate, a receiver or receiver and manager, having any powers that the Court orders, of the property or of part of the property of that person: ‘‘(h) if the relevant person is a natural person, an order requiring that person to deliver up to the Court his or her passport and any other documents that the Court thinks .t: ‘‘(i) if the relevant person is a natural person, an order prohibiting that person from leaving New Zealand, without the consent of the Court. ‘‘(2) A reference in subsection (1)(e) or (g) to property of a person includes a reference to property that the person holds other­wise than as sole bene.cial owner, for example,— ‘‘(a) as trustee for, as nominee for, or otherwise on behalf of or on account of, another person; or ‘‘(b) in a .duciary capacity. ‘‘(3) An order may be expressed to operate for a speci.ed period or until the order is discharged by a further order under this section. Compare: Section 1323(1), (2A), (6), Corporations Act 2001 (Aust.) ‘‘44DI Interim orders ‘‘(1) If an application is made to the Court for an order under section 44DG, the Court may, if in the opinion of the Court it is desirable to do so, before considering the application, grant an interim order, being an order of the kind applied for that is expressed to have effect pending the determination of the application. ‘‘(2) The Court must not require the applicant or any other person, as a condition of granting an interim order under this section, to give an undertaking as to damages. Compare: Section 1323(3), (4), Corporations Act 2001 (Aust.) ‘‘(1) Nothing in sections 44DG to 44DI affects the powers that the Court has apart from those sections. ‘‘(2) This section has effect subject to the Insolvency Act 1967. Compare: Section 1323(7), (8) Corporations Act 2001 (Aust.) ‘‘44DK Offence A person commits an offence who contravenes an order by the Court under section 44DH or section 44DI that is applicable to the person and is liable on conviction on indictment,— ‘‘(a) in the case of an individual, to imprisonment to a term not exceeding 3 years or to a .ne not exceeding $100,000, or both: ‘‘(b) in the case of a body corporate, to a .ne not exceeding $300,000. Compare: Section 1323(9), (10), Corporations Act 2001 (Aust.) ‘‘Subpart 4—General ‘‘44E Jurisdiction of Courts in New Zealand The High Court has exclusive jurisdiction to hear and deter­mine proceedings in New Zealand under this Act, other than proceedings for offences against this Act or appeals under section 31G. ‘‘44F Court may order payment of Panel’s costs If the Panel brings or conducts proceedings under this Part and the Court makes any order against a person under this Part, the Court may also order that person to pay the Panel’s costs and expenses in conducting the proceedings. New (unanimous) ‘‘44FA Orders to secure compliance That Court may, for the purpose of securing compliance with any other order it makes under this Part, direct a person to do or refrain from doing a speci.ed act. thinks .t: ‘‘(b) publish notice of the application in the manner the Court thinks .t. New (unanimous) ‘‘44GA General provisions as to Court’s orders ‘‘(1) An order under this Part may be made on the terms and conditions the Court thinks .t. ‘‘(2) The Court may revoke, vary, or suspend an order made under this Part on the terms and conditions the Court thinks .t. ‘‘44H Persons entitled to appear before Court The following persons are entitled to appear and be heard at the hearing of an application to the Court under this Part: ‘‘(a) the applicant: ‘‘(b) the Panel: ‘‘(c) if the speci.ed company’s securities are, or were at the material time, quoted on a registered exchange’s mar­ ket, that registered exchange: ‘‘(d) the speci.ed company: ‘‘(e) a person who is alleged to have suffered, or to be likely to suffer, loss or damage because of an alleged contra­vention (whether that person or another person makes the allegation): ‘‘(f) a person who was a (member or) security holder of the speci.ed company at the time that the conduct to which the application relates occurred: ‘‘(g) a person who, at any time within the period of 6 months before the making of the application, has made an offer or offers to acquire securities in the speci.ed company in accordance with the takeovers code: ‘‘(h) a person directed to be given notice of the application: ‘‘(i) with the leave of the Court, any other person. ‘‘44I Knowledge of matters presumed if employee or agent knows matters In any proceedings under this Act, it is presumed, in the absence of proof to the contrary established on the balance of probabilities, that a person knew, at a material time, of any matter if, at that time, an employee or agent of that person knew of the matter in his or her capacity as employee or agent. ‘‘44J No pecuniary penalty and .ne for same conduct A person cannot be ordered to pay a pecuniary penalty and be liable for a .ne under this Act for the same conduct.’’ 52 New Part 4 heading inserted The principal Act is amended by repealing the heading above section 45, and substituting the following heading: ‘‘Part 4 ‘‘Miscellaneous’’. Amendments to takeovers code 53 Takeovers code is called code in this Part In this Part, the Schedule to the Takeovers Code Approval Order 20004 is called ‘‘the code’’. 4 SR 2000/210 54 Interpretation Struck out (unanimous) (1) Rule 3(1) of the code is amended by omitting, from paragraph (c) of the de.nition of code company, the words ‘‘and $20,000,000 or more of assets’’. New (unanimous) (1) Rule 3(1) of the code is amended by revoking the de.nition of code company, and substituting the following de.nition: ‘‘code company means a company that— ‘‘(a) is a party to a listing agreement with a registered exchange and has securities that confer voting rights quoted on the registered exchange’s market; or ‘‘(b) was within paragraph (a) at any time during the period of 12 months before a date or the occurrence of an event referred to in this code; or ‘‘(c) has 50 or more shareholders’’. (2) Rule 3(1) of the code is amended by inserting, in its appropri­ ate alphabetical order, the following de.nition: ‘‘engaging in conduct means doing or refusing to do an act, and includes,— ‘‘(a) omitting to do an act; or ‘‘(b) making it known that an act will or will not be done’’. New (unanimous) (3) Rule 3 of the code is amended by adding the following subclause: ‘‘(3) The de.nition of code company in this rule speci.es the period of time to be speci.ed by the code for the purposes of the de.nition of speci.ed company in the Act.’’ 55 Offer period Rule 24 of the code is amended by adding the following subclause: ‘‘(4) If the offer period is extended by the Panel by order made under section 32 of the Act, that additional period is included in the offer period for the purposes of this code.’’ 56 New Part 8 added The code is amended by adding the following Part: ‘‘Part 8 ‘‘Market manipulation ‘‘64 Misleading or deceptive conduct A person must not engage in conduct, in relation to any transaction or event that is regulated by this code, or that is 166 incidental or preliminary to a transaction or event that is or is likely to be regulated by this code, that is misleading or deceptive or likely to mislead or deceive. Struck out (unanimous) ‘‘64A Defences that may be raised in proceeding for contravention of rule 64 ‘‘(1) In any proceeding against a person (A) for contravention of rule 64, it is a defence if the defendant proves on a balance of probabilities— ‘‘(a) that the contravention was due to a reasonable mistake; or ‘‘(b) that the contravention was due to reasonable reliance on information supplied by another person; or ‘‘(c) that— ‘‘(i) the contravention was due to the act or default of another person to an accident or to some other cause beyond the defendant’s control; and ‘‘(ii) the defendant took reasonable precautions and exercised due diligence to avoid the contravention. ‘‘(2) However, this defence— ‘‘(a) is not available in respect of a meeting, or the Panel’s powers, under section 32 of the Act; and ‘‘(b) does not prevent the Court from granting an injunction under section 33F of the Act or making a civil remedy order under section 33I of the Act, if, in each case, the order is directed at preventing or remedying any con­duct within rule 64. ‘‘(3) In subclause (1), another person does not include— ‘‘(a) an employee or agent of the defendant; or ‘‘(b) if the defendant is a body corporate, a director, employee, or agent of the defendant. ‘‘64B Defendant must give notice of identity of third party ‘‘(1) A defendant cannot rely on a defence under rule 64A that the contravention was due to reasonable reliance on information supplied by another person or was due to the act or default of another person unless the defendant has .rst served notice identifying that other person on the party or parties bringing the proceeding. ‘‘(2) The defendant must serve the notice not later than 7 clear days before the hearing of the proceeding begins. ‘‘(3) However, the Court may allow the defendant to rely on a defence speci.ed in subclause (1) even if the defendant has not complied with subclause (1) or subclause (2) or both. ‘‘64C Exception for disclosure by investment advisers or brokers Rule 64 does not apply to conduct in relation to a disclosure under Part 4 of the Securities Markets Act 1988 or to conduct in relation to an advice advertisement, a broker advertisement, or a product advertisement to the extent that that conduct is regulated by Part 4 of that Act.’’ New (unanimous) 56A Additional disclosures required if consideration includes securities Clause 18(3) of Schedule 1 of the code is amended by adding the following de.nition: ‘‘public issuer means a person who is a party to a listing agreement with a registered exchange.’’ Amendments to replace references to takeovers schemes 57 Amendments to replace references to takeovers schemes (1) Section 67C(4) of the Companies Act 1993 is amended by omitting the words ‘‘a takeover scheme under section 4 of the Companies Amendment Act 1963’’, and substituting the words ‘‘a takeover offer made under (a) the takeovers code in force under the Takeovers Act 1993’’. (2) Section 26(3) of the Co-operative Companies Act 1996 is amended by omitting the words ‘‘a takeover scheme under section 4 of the Companies Amendment Act 1963’’, and sub­ stituting the words ‘‘a takeover offer made under (a) the takeovers code in force under the Takeovers Act 1993’’. 168 Securities Legislation Part 2 cl 59 Transitional provisions 58 Transitional provision for acquisitions made or committed to before commencement of this Part No amendment made by this Part requires a person to comply with the principal Act or the code— (a) by reason only of the fact that, on the commencement of this Part, a particular proportion of securities have been acquired in a speci.ed company, whether by that person or any other person before the commencement of this Part; or (b) by reason of the acquisition of securities in a speci.ed company, whether by that person or any other person, on or after the commencement of this Part, if the acqui­ sition arises from the performance of a contractual obli­ gation incurred, or the exercise of a right acquired, before the commencement of this Part. 59 Transitional provision for existing offences and contraventions (1) The principal Act and the code continue to have effect as if they were not amended by this Part for the purpose of— (a) investigating an existing offence or contravention: (b) commencing or completing proceedings for an existing offence or contravention: (c) imposing a penalty or other remedy, or making an order, in relation to an existing offence or contravention. (2) In this section, existing offence or contravention means an offence under, or contravention of, the principal Act or the code that was committed or done before the commencement of this Part. 169 Part 3 Amendments to Fair Trading Act 1986 60 Fair Trading Act 1986 called principal Act in this Part In this Part, the Fair Trading Act 19865 is called ‘‘the principal Act’’. 5 1986 No 121 61 New sections 5A and 5B inserted The principal Act is amended by inserting, after section 5, the following sections: ‘‘5A No liability under Act if not liable under Securities Markets Act 1988 A court hearing a proceeding brought against a person under this Act must not .nd that person liable for conduct that is regulated by the Securities Markets Act 1988 if that person would not be liable for that conduct under that Act. ‘‘5B Act does not apply to certain conduct regulated by takeovers code Nothing in this Act applies to conduct in relation to any transaction or event regulated by the takeovers code that is in force under the Takeovers Act 1993 or incidental or prelimi­nary to a transaction or event that is or is likely to be regulated by that code.’’ 62 New section 48A inserted The principal Act is amended by inserting, after section 48, the following section: ‘‘48A Sharing of information with Securities Commission or Takeovers Panel ‘‘(1) The Commission may communicate to the Securities Com­mission or the Takeovers Panel any information that the Commission— ‘‘(a) holds in relation to the exercise of the Commission’s powers, or the performance of its functions and duties, in respect of this Act; and ‘‘(b) considers may assist the Securities Commission or the Takeovers Panel in the exercise of their powers, or the performance of their functions and duties, in respect of false, misleading, or deceptive conduct under the Secur­ities Act 1978 or the Securities Markets Act 1988 or the Takeovers Act 1983 or the takeovers code in force under that Act. ‘‘(2) The Commission may use any information communicated to it by the Securities Commission under section 17B of the Secur­ities Act 1978 or under section 15B of the Takeovers Act 1983 in the Commission’s exercise of its powers, or the perform­ance of its functions and duties, in respect of this Act. ‘‘(3) This section applies despite anything to the contrary in any enactment, contract, deed, or document.’’ Building Act 2004 (2004 No 72) Omit clause 2(2)(b) of Schedule 3 and substitute: ‘‘(b) a person who is prohibited from being a director or promoter of, or being concerned or taking part in the management of, an incorporated or unincorporated body under the Companies Act 1993, or the Securities Act 1978, or the Securities Markets Act 1988, or the Takeovers Act 1993:’’. Chartered Professional Engineers of New Zealand Act 2002 (2002 No 17) Omit clause 2(b) of Schedule 1 and substitute: ‘‘(b) a person who is prohibited from being a director or promoter of, or being concerned or taking part in the management of, an incorporated or unincorporated body under the Companies Act 1993, or the Securities Act 1978, or the Securities Markets Act 1988, or the Takeovers Act 1993:’’. Companies Act 1993 (1993 No 105) Insert, after section 151(2)(e): ‘‘(ea) a person who is prohibited from being a director or promoter of, or being concerned or taking part in the management of, an incorporated or unincorporated body under the Securities Act 1978 or the Securities Markets Act 1988 or the Takeovers Act 1993:’’ Omit from section 266(4) the words ‘‘or section 383 of this Act’’ and substitute the words ‘‘, section 383 of this Act, section 60A of the Securities Act 1978, section 43F of the Securities Markets Act 1988, or section 44DA of the Takeovers Act 1993’’. Insert, after section 280(1)(k): ‘‘(ka) a person who is prohibited from being a director or promoter of, or being concerned or taking part in the management of, an incorporated or unincorporated body under the Securities Act 1978, or the Securities Markets Act 1988, or the Takeovers Act 1993:’’. Companies Act 1993 (1993 No 105)—continued Repeal section 382(1)(c). Repeal section 383(1)(c)(i) and substitute: ‘‘(i) persistently failed to comply with this Act or the Companies Act 1955, the Securities Act 1978, the Securities Markets Act 1988, the Takeovers Act 1993, or the takeovers code in force under that Act or, if the company has failed to so comply, persistently failed to take reasonable steps to obtain compliance with those Acts or the code; or’’. Repeal section 383(1)(d). Insert, after section 383(4): ‘‘(4A) If conduct by a person constitutes grounds for making an order under any 1 or more of this section, section 43F of the Securities Markets Act 1988, section 44DA of the Takeovers Act 1993, and section 60A of the Securities Act 1978, proceedings may be brought against that person under any 1 or more of those provisions, but no person is liable to more than 1 order under those provisions for the same conduct.’’ Crown Entities Act 2004 (2004 No 115) Repeal section 30(2)(b) and substitute: ‘‘(b) a person who is prohibited from being a director or promoter of, or being concerned or taking part in the management of, an incorporated or unincorporated body under the Companies Act 1993, or the Securities Act 1978, or the Securities Markets Act 1988, or the Takeovers Act 1993:’’. Education Act 1989 (1989 No 80) Repeal section 103(1)(d) and substitute: ‘‘(d) is prohibited from being a director or promoter of, or being concerned or taking part in the management of, an incorporated or unincorporated body under the Companies Act 1993, or the Securities Act 1978, or the Securities Markets Act 1988, or the Takeovers Act 1993; or’’. Maori Television Service (Te Aratuku Whakaata Irirangi Maori) Act 2003 (2003 No 21) Omit clause 2(2)(b) of Schedule 2 and substitute: ‘‘(b) a person who is prohibited from being a director or promoter of, or being concerned or taking part in the management of, an incorporated or unincorporated body under the Companies Act 1993, or the Securities Act 1978, or the Securities Markets Act 1988, or the Takeovers Act 1993:’’. Motor Vehicle Sales Act 2003 (2003 No 12) Repeal section 24(i) and substitute: ‘‘(i) a person who is prohibited from being a director or promoter of, or being concerned or taking part in the management of, an incorporated or unincorporated body under the Companies Act 1993, or the Securities Act 1978, or the Securities Markets Act 1988, or the Takeovers Act 1993; or’’. Repeal section 68(1)(c)(i) and substitute: ‘‘(i) is prohibited from being a director or promoter of, or being concerned or taking part in the management of, an incorporated or unincorporated body under the Companies Act 1993, or the Securities Act 1978, or the Securities Markets Act 1988, or the Takeovers Act 1993; or’’. Receiverships Act 1993 (1993 No 122) Repeal section 5(1)(j) and (k) and substitute: ‘‘(k) a person who is prohibited from being a director or promoter of, or being concerned or taking part in the management of, an incorporated or unincorporated body under the Companies Act 1993, or the Securities Act 1978, or the Securities Markets Act 1988, or the Takeovers Act 1993:’’. Reserve Bank of New Zealand Act 1989 (1989 No 157) Repeal section 46(1)(i) and (j) and substitute: ‘‘(j) is prohibited from being a director or promoter of, or being concerned or taking part in the management of, an incorporated or unincorporated body under the Reserve Bank of New Zealand Act 1989 (1989 No 157)— continued Companies Act 1993, or the Securities Act 1978, or the Securities Markets Act 1988, or the Takeovers Act 1993; or’’. Repeal section 58(g) and (h) and substitute: ‘‘(h) is prohibited from being a director or promoter of, or being concerned or taking part in the management of, an incorporated or unincorporated body under the Companies Act 1993, or the Securities Act 1978, or the Securities Markets Act 1988, or the Takeovers Act 1993:’’. Summary Proceedings Act 1957 (1957 No 87) Insert in Part 2 of the First Schedule, in their appropriate alphabetical order: Securities Act 1978 60C offence of contravening management banning order 60E persons automatically banned from management Takeovers Act 1993 44C criminal liability for false or misleading statement or information 44DC offence of contravening management banning order 44DE persons automatically banned from management s 29 Schedule 2 (Related amendments)Amendments related to Securities Markets Act 1988 Part 1 Related amendments to Securities Markets Act 1988 (1988 No 234) Securities Markets Act 1988 (1988 No 234) Omit from section 19B(1)(d) the expression ‘‘section 19Q’’ and substitute the expression ‘‘section 48E’’. Omit from section 19C((a)) the expression ‘‘section 19Q’’ in both places where it occurs and substitute in each place the expression ‘‘section 48E’’. Repeal sections 19E to 19S and the headings above sections 19G, 19K, and 19Q. Repeal sections 19ZB and 19ZC and the heading above section 19ZB. Repeal the heading after section 19ZC and substitute: ‘‘Offences’’. Add to section 19ZD(1) the words ‘‘(see section 43A for the maximum penalty of a $30,000 .ne)’’. Repeal section 19ZD(2). Repeal section 19ZE. Omit from section 36A(3) the words ‘‘and is liable on summary conviction to a .ne not exceeding $10,000 for every day or part of a day during which the contravention occurs’’ and substitute the words ‘‘(see section 43B for the maximum penalty of a $10,000 .ne per day)’’. Omit from section 36B(2) the words ‘‘and is liable on summary conviction to a .ne not exceeding $10,000 for every day or part of a day during which the contravention occurs’’ and substitute the words ‘‘(see section 43B for the maximum penalty of a $10,000 .ne for per day)’’. Omit from section 36F(1)(c) the expression ‘‘section 49’’ and substi­tute the expression ‘‘section 49D’’. Omit from section 36G(2) the words ‘‘and is liable on summary conviction to a .ne not exceeding $10,000 for every day or part of a day during which the contravention occurs’’ and substitute the words ‘‘(see section 43B for the maximum penalty of a $10,000 .ne per day)’’. New (unanimous) Add to section 36T the following subsection: ‘‘(4) In this section,— ‘‘(a) a person is an associated person of another person if— ‘‘(i) they are acting jointly or in concert; or ‘‘(ii) either person acts, or is accustomed to act, in accordance with the wishes of the other person; or ‘‘(iii) they are related bodies corporate within the meaning of section 5(7); or ‘‘(iv) either person is able, directly or indirectly, to exert a substantial degree of in.uence over the activities of the other; or ‘‘(v) they are both, directly or indirectly, under the control of the same person; but ‘‘(b) a director of a company or other body corporate is not an associated person of that company or body corporate merely because he or she is a director of that company or body corporate.’’ Omit from section 36P(2) the words ‘‘and is liable on summary conviction to a .ne not exceeding $10,000 for every day or part of a day during which the contravention occurs’’ and substitute the words ‘‘(see section 43B for the maximum penalty of a $10,000 .ne per day)’’. Omit from section 36Q(2) the words ‘‘and is liable on summary conviction to a .ne not exceeding $5,000’’ and substitute the words ‘‘(see section 43B for the maximum penalty of a $5,000 .ne)’’. Omit from section 36U(2) the words ‘‘and is liable on summary conviction to a .ne not exceeding $1,000 for every day or part of a day during which the contravention continues’’ and substitute the words ‘‘(see section 43B for the maximum penalty of a $1,000 .ne per day)’’. Omit from section 36Z the words ‘‘and is liable on summary conviction to a .ne not exceeding $10,000 for every day or part of a day during which the contravention occurs’’ and substitute the words ‘‘(see section 43B for the maximum penalty of a $10,000 .ne per day)’’. Part 1—continued Securities Markets Act 1988 (1988 No 234)—continued Repeal sections 36ZA to 36ZC and the heading above section 36ZA. Omit from section 36ZF(1)(d) and (2) the expression ‘‘section 49’’ and substitute in each case the expression ‘‘section 49D’’. Omit from section 36ZM(1)(c) the expression ‘‘section 19Q’’ and substitute the expression ‘‘section 48E’’. Omit from section 36ZO(4) the expression ‘‘Part 3’’ and substitute the expression ‘‘section 69P’’. Repeal section 36ZX(2) and substitute: ‘‘(2) See section 43B for the maximum penalty of a $30,000 .ne.’’ Omit from section 37A(3) the words ‘‘and is liable on summary conviction to a .ne not exceeding $10,000 for every day or part of a day during which the contravention occurs’’ and substitute the words ‘‘(see section 43C for the maximum penalty of a $10,000 .ne per day)’’. Omit from section 37B(2) the words ‘‘and is liable on summary conviction to a .ne not exceeding $10,000 for every day or part of a day during which the contravention occurs’’ and substitute the words ‘‘(see section 43C for the maximum penalty of a $10,000 .ne per day)’’. Repeal section 39 and substitute: ‘‘39 Contravention of section 38 an offence Every person who contravenes section 38 commits an offence (see section 43C for the maximum penalties of 3 years impris­onment and a $100,000 .ne for an individual and a $300,000 .ne for a body corporate).’’ Insert, above section 44: ‘‘Part 6 ‘‘Miscellaneous ‘‘General provisions’’. Part 2 Related amendments to other Acts Struck out (unanimous) Companies Act 1993 (1993 No 105) Insert, after section 151(2)(e): Part 2—continued Companies Act 1993 (1993 No 105)—continued ‘‘(ea) a person who is prohibited from being a director or promoter of or being concerned or taking part in the management of a company under section 60A or 60E of the Securities Act 1978 or section 43F or 43I of the Securities Markets Act 1988:’’ Omit from section 266(4) the words ‘‘or section 383 of this Act’’ and substitute the words ‘‘, section 383 of this Act or section 60A of the Securities Act 1978 or section 43F of the Securities Markets Act 1988’’. Insert, after section 280(1)(k): ‘‘(ka) a person who is prohibited from being a director or promoter of or being concerned or taking part in the management of a company under section 60A or 60E of the Securities Act 1978 or section 43F or 43I of the Securities Markets Act 1988:’’. Repeal section 382(1)(c). Repeal section 383(1)(c)(i) and substitute: ‘‘(i) persistently failed to comply with this Act or the Companies Act 1955, or, if the company has failed to so comply, persistently failed to take reasonable steps to obtain compliance with those Acts; or’’. Insert, after section 383(4): ‘‘(4A) If conduct by a person constitutes grounds for making an order under any 1 or more of this section, section 43F of the Securities Markets Act 1988, and section 60A of the Securities Act 1978, proceedings may be brought against that person under any 1 or more of those provisions, but no person is liable to more than 1 order under those provisions for the same conduct.’’ Construction Contracts Act 2002 (2002 No 46) Omit from section 7(1)(a)(ii) the expression ‘‘section 5(7)’’ and substitute the expression ‘‘section 5B(2)’’ Omit from section 7(3) the expression ‘‘section 5’’ and substitute the words ‘‘sections 5 to 5B’’. Part 2—continued Construction Contracts Act 2002 (2002 No 46)—continued Omit from section 7(3)(b) the words ‘‘that section’’ and substitute the words ‘‘those sections’’. Electricity Industry Reform Act 1998 (1998 No 88) Omit from section 9(2) the expression ‘‘section 5’’ and substitute the words ‘‘sections 5 to 5B’’. Omit from section 9(2)(b) the words ‘‘that section’’ and substitute the words ‘‘those sections’’. Omit from section 12(1)(a)(ii) the expression ‘‘section 5(7)’’ and substitute the expression ‘‘section 5B(2)’’. Omit from section 70(2)(h) the words ‘‘providing for any matter currently referred to in sections 30 to 35A of the Securities Markets Act 1988’’ and substitute the words ‘‘providing for the Court to make orders directing disclosure, compensatory orders, or other orders described in section 42ZG of the Securities Markets Act 1988, who may apply for the orders, and related matters’’. Struck out (unanimous) Fair Trading Act 1986 (1986 No 121) Insert, after section 5, the following sections: ‘‘5A Act does not apply to certain conduct regulated by Securities Markets Act 1988 Nothing in this Act applies to conduct to the extent that it is regulated by sections 11 to 11D and 13 or Part 4 of the Securities Markets Act 1988. ‘‘5B Act does not apply to certain conduct regulated by takeovers code Nothing in this Act applies to conduct to the extent that misleading or deceptive conduct is regulated by the Takeovers Act 1993 or a takeovers code that is in force under that Act.’’ Maori Reserved Land Amendment Act 1997 (1997 No 101) Omit from section 8(5)(c) the expression ‘‘section 5’’ and substitute the words ‘‘sections 5 to 5B’’. Part 2—continued New (unanimous) Securities Act (1978 No 103) Omit the words ‘‘Investment Advisers (Disclosure) Act 1996’’ from the de.nition of investment advice in section 5(2CF) and substitute ‘‘Securities Markets Act 1988’’. Omit from Schedule 1 the item ‘‘Investment Advisers (Disclosure) Act 1996’’ and insert in its appropriate alphabetical order the item ‘‘Securities Markets Act 1988 Part 4’’. Sharebrokers Act 1908 (1908 No 176) Repeal section 6(1)(c) and substitute: ‘‘(c) a sharebroker has been convicted of an offence against Part 1 (dealing misconduct) of the Securities Markets Act 1988 or a pecuniary penalty order has been made against the person for a contravention of that Part,— ’’. Summary Proceedings Act 1957 (1957 No 87) Insert in Part 2 of the First Schedule, in its appropriate alphabetical order: Securities Markets 8F criminal liability for insider Act 1988 conduct 11A criminal liability for false or misleading statement or information 11D criminal liability for false or misleading appearance of trading, etc 38 dealers in futures contracts must be authorised 43H offence of contravening management banning order 43I persons automatically banned from management 43M offence of contravening investment adviser or broker banning order Part 2—continued Summary Proceedings Act 1957 (1957 No 87)—continued 43N persons automatically banned from investment adviser or broker activities Part 3 Related amendments to regulations Securities (Substantial Security Holders) Regulations 1997 (SR 1997/110) Revoke. Securities Markets (Disclosure of Relevant Interests by Directors and Of.cers) Regulations 2003 (SR 2003/382) Revoke regulation 19. Revoke regulation 21 and substitute: ‘‘21 Exemption for directors or of.cers who disclose substantial holdings A director or of.cer who has, or who acquires or disposes of, a relevant interest in a security does not have to disclose that fact under section 19T of the Act if— ‘‘(a) the director or of.cer must make a disclosure under section 22, 23, or 25 of the Act in relation to a substantial holding in the public issuer of the security to which the relevant interest relates or related; and ‘‘(b) the disclosure under that section concerns the same relevant interest; and ‘‘(c) the director or of.cer discloses in accordance with that section; and ‘‘(d) it is stated in the disclosure made in accordance with that section that the director or of.cer is a director or of.cer of the public issuer.’’ Legislative history 30 November 2004 Introduction (Bill 234–1) 14 December 2004 First reading and referral to Commerce Committee Wellington, New Zealand: Published under the authority of the House of Representatives—2005 234bar2.pag 14-JUN-05 Price code: K 182