Information to include with your application

 

Please ensure the following information is covered in your application:

Who is applying?

Give the full name, address and corporate status of the person(s) seeking the exemption.

State the jurisdiction in which the applicant is incorporated or constituted, and any securities exchanges upon which its financial products are listed.

What do you want an exemption from?

Give the provisions of the Acts and/or Regulations from which the exemption is sought and any conditions of exemption you consider appropriate.

Why are you seeking this exemption?

Explain, for each provision of the Acts or Regulations from which the exemption is sought, why the exemption is wanted and give full reasons which may justify an exemption. Your reasons should include an explanation of how the exemption sought is consistent with the policy of the relevant legislation, and how it meets the statutory tests shown below.

Act Provisions containing statutory tests to be met before exemption granted
Securities Act 1978 Sections 70B and 70D (preserved for transitional period by clause 11 of Schedule 4 of the Financial Markets Conduct Act 2013)
Financial Reporting Act 1993 Sections 4B and 35A (preserved for transitional period by section 55(4) of the Financial Reporting Act 2013)
Financial Advisers Act 2008 Sections 148 and 148A
Financial Markets Conduct Act 2013 Sections 556, 557 and 572

Are there any precedents?

Identify any existing exemption notices which are similar to the exemption sought and which may provide a precedent for your application. Explain how the notices are similar to and different from the exemption you are seeking.

If your application is for an exemption from financial reporting requirements, you may find it useful to refer to other financial reporting exemptions under the Financial Markets Conduct Act (FMC Act).  These can be found under the heading 'Financial Markets Conduct Act exemptions'.  They reflect our current approach under the financial markets regime.  Do not use exemptions listed under the heading 'Financial Reporting Act exemptions' because these apply to the old regime and will not provide you with the correct statutory references or suitable reasons.   If you use an existing exemption as your starting point, be sure to adapt it to your individual circumstances.

In the case of applications for exemptions under the disclosure requirements of the Securities Act regime, please also include an explanation of why you cannot offer under the FMC Act regime instead.

Draft notice

You must include a draft exemption notice which would give effect to the exemptions you seek.  When drafting this notice please consider particularly:

  • the company, or other entity, proper legal names
  • any terms that need to be defined
  • the particular provisions of the relevant legislation from which exemptions are sought
  • the terms and conditions appropriate to each exemption sought
  • a summary of the key reasons for the exemption (consistent with the policy of the relevant legislation, and addressing the statutory tests that must be met for the FMA to grant the exemption)

Specific exemption application requirements

In addition to the general information above, specific exemption applications require additional information.

See applications to exclude commercially sensitive information from material contracts required to be provided in offer information.

Exemptions from offer information requirements

  • Describe the offer. It would be helpful to give some background to the offer and then specific details e.g. the type of financial products, details of the offer, parties to the offer, details of target subscribers, etc.
  • Describe how your proposed exemption may affect prospective investors and any costs and benefits to them.
  • Describe the effects on the issuer of the financial product(s), and the relative costs and benefits, of (a) having and (b) not having the exemption.
  • Describe any proposed conditions that require disclosure of alternative information helpful for the investor to make an investment decision.

Exemptions for relief from financial reporting obligations for overseas issuers

Please include detailed information on the following:

  • The financial reporting, including audit requirements, in force in the country where the issuer is incorporated or is otherwise subject to e.g. listing rules or prudential regulation.
  • The legal standing of the financial reporting requirements.
  • The enforceability of the financial reporting requirements.
  • The ease with which New Zealand authorities could, if necessary, obtain cooperation from home jurisdiction in any investigation – for example, the Securities Regulator and any independent Auditor oversight bodies.

Please include copies of applicable financial reporting laws and standards, or references to where these can be obtained electronically.

Exemptions for relief from financial reporting obligations for entities in  receipt of funds from a conduit issuer

  • Describe how the applicant is a ‘recipient of funds from a conduit issuer’.
  • Include specific details, e.g. the type of financial products, parties to the offer, parties who are ‘recipients of funds from a conduit issuer’ and the ‘conduit issuer’, details of target subscribers etc.
  • Address how the circumstances of the issuer or the conditions suggested will ensure that investors still receive adequate information about their investment and the entity or entities for whose use the money has been raised.

Exemptions from financial adviser requirements

  • Name or description of person, service, transaction, document, information, or product in respect of which exemption is sought.
  • Provide details of any consumers, markets or third parties (including competitors) that would be affected by the exemption.  Explain how their interests that will be affected by your proposed exemption.
  • In relation to exemptions from the Code competence requirements, please see section 148(3) of the FAA, and provide details of alternative qualifications you hold. Then:
    • explain why qualifications that differ to those accepted as alternatives in the Code would not undermine consumer protection, and
    • state why these are comparable to standards required by the Code, or
    • provide information about the costs of compliance and how they would be unreasonable or not justified by the benefit of compliance, and
    • provide any supporting evidence in relation to your qualification.
  • Describe impediments to your activities created by the law, and explain your commercial position.
  • State why the exemption should be granted and how the proposed exemption would operate to assist your operations.
  • Outline appropriate limitations on the proposed exemption addressing any regulatory detriment to consumers or investors if the exemption is granted.
  • Explain any net regulatory benefit, i.e. where any regulatory detriment caused by granting the exemption is outweighed by the commercial or other benefit.
  • State whether you have any objections to, or requests concerning, publication of details of your exemption (see sections 148B and 149 of FAA), and give reasons.