Publications
New rules on short form prospectuses
The Securities Commission has replaced (with amendments) the Securities Act (Short Form Prospectus) Exemption Notice 2002 with a substitute exemption notice, the Securities Act (Short Form Prospectus) Exemption Notice 2009 (2009 Exemption).
Effective from 23 March, the 2009 Exemption retains the exemptions and conditions that had been previously provided which had exempted issuers from the requirement to include financial statements in a short form prospectus for the offer of certain securities to existing holders, provided that certain recent financial statements have been sent to shareholders.
Exemption available where section 209 notice has been sent in lieu of annual report
In June 2007, amendments to section 209 of the Companies Act 1993 took effect (relating to obligations to make an annual report containing the financial statements available to shareholders). Before these amendments, an annual report was required to be sent to shareholders not less than 20 working days before the annual meeting. The amendment made it possible to send a notice advising shareholders of their right to receive an annual report in place of the annual report.
Previously, an issuer was required to include financial statements in a short form prospectus even where that issuer had made use of the section 209 notice procedure . Under the 2009 Exemption, an issuer that has made annual reports available to shareholders under the section 209 procedure will not be required to include those accounts in its short-form prospectus.
The policy underlying the short form prospectus provisions of the Securities Regulations 1983 is that short form prospectus disclosure should be available to companies if the most recent annual report has been made available in accordance with the Companies Act 1993. The 2009 Exemption is consistent with that policy and aligns the relief in this area between the Securities Regulations 1983 and the Companies Act 1993.
Condensed interim financial statements
The 2009 Exemption also provides that compliance with NZ IAS 34 in respect of interim financial statements is sufficient compliance with the requirements of the Financial Reporting Act 1993 for the purposes of short form prospectuses. This exemption has the effect that condensed interim financial statements can now be used in short form prospectuses without the need for full notes to those statements. Condensed interim financial statements are still required to be included in the short-form prospectus, even where the issuer has previously sent those interim financial statements to shareholders.
The amended exemption recognises that a reduced level of information is appropriate for offers of securities to existing security holders and enables issuers to make offers to these existing investors on the basis of reduced disclosure and, accordingly, with lower compliance costs.
For further information, please contact your usual Bell Gully adviser or:
Auckland
Anna Buchly
Partner
Garry Downs
Partner
David Flacks
Partner
James Gibson
Partner
Brynn Gilbertson
Partner
Glenn Joblin
Partner
Gavin Macdonald
Partner
Haydn Wong
Partner
Wellington
Mark Freeman
Partner
Chris Gordon
Partner
David Coull
Partner
Disclaimer
This publication is necessarily brief and general in nature. You should seek professional advice before taking any action in relation to the matters dealt with in this publication.
