When you need to comply

 

The financial reporting requirements in part 7 of the Financial Markets Conduct Act 2013 (FMC Act) came into effect on 1 April 2014. These affect all issuers under the Financial Reporting Act 1993 (FR Act) who are or will become FMC reporting entities.

The requirements will apply to different entities, at different points in time, over the two-year transitional period from 1 December 2014 to 30 November 2016. When they apply depends on:

  • when an entity becomes an FMC reporting entity (a trigger event); and
  • how the entity becomes an FMC reporting entity.

The date you must prepare your first full-year financial statements under the FMC Act is your first 'FMC balance date'. It's important to identify this date early so you can plan ahead to meet the shorter filing timeframes (now four months from the end of your financial year). Below is an online tool to help you work out your FMC balance date. You may also want to check our FAQs.

Work out your FMC balance date

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You may also wish to talk to your legal and accounting advisers, or refer to the key transitional provisions in the legislation - particularly if your entity's situation is complex. The key provisions are set out in the FMC Act, Schedule 4 Transition Provisions, Clause 17-19, and the Financial Reporting Act 2013 sections 55-57.

When is your first FMC balance date?

We have developed a transition timetable to help you understand when you will need to comply. The key points include:

  1. Your existing reporting requirements continue until the date you have to start reporting under the FMC Act.
  2. Your first FMC balance date can't be before 1 December 2014. Generally the new FMC requirements can only apply to periods beginning on or after 1 April 2014. If you are part way through an accounting period on 1 April 2014, you'll usually complete that period under your existing reporting requirements. However if your balance date falls in the period from 1 December 2014 to 30 March 2015, it will become an FMC balance date if (before that balance date) you:
    • issue financial products under Part 3 of the FMC Act
    • opt-in early for securities you offered under the Securities Act
    • become the recipient of funds from conduit issuers (related to the two situations above).
  3. For all balance dates on or after 31 March 2015, where you are a FMC reporting entity, you will need to prepare financial statements under the FMC Act. Therefore 31 March 2015 will be the first FMC balance date for many entities that had a trigger event prior to that date. For more detail on trigger events see here. Please note that several trigger events can apply to you and following our table could give you several different first FMC balance dates. If this applies to you, you will need to use the earliest FMC balance date.
  4. Some issuers won't become a FMC reporting entity until 30 November 2016. As such they will only have their first FMC balance date on or after that date.

Key documents:

Some extra points to note if.....

You are a licensed MIS manager

Licensed MIS managers must prepare financial statements under the FMC Act for:

  • yourself as a licensed entity
  • schemes you've registered under the FMC Act, and
  • schemes you were required to report for under the Financial Reporting Act 1993.

It's important to note that once you're a FMC reporting entity you must report under the FMC Act for all your schemes. This includes schemes registered under the FMC Act and those you were required to report under the FR Act. It means you and your schemes will all have the same FMC financial reporting requirements, including having to lodge financial statements within the new four month deadline. This is a requirement of the Financial Reporting Act 2013 section 57.

This applies regardless of how you became a FMC reporting entity. For example the trigger event could be because you're a licensed manager, a registered bank or a listed issuer.

You make an offer during the transitional period

During the transitional period some parts of the FMC Act may apply to you before others. This means that while the financial reporting provisions of part 7 of the FMC Act may apply to you, other requirements may not apply at the same time (for example governance or offer requirements).

You make 'small offers' under Schedule 1 of the FMC Act

There are exclusions under Schedule 1 of the FMC Act that allow for some offers to be made without you having to provide all the usual documentation required under part 3 of the Act (such as product disclosure statements).

One of those exclusions is for small personal offers of debt and equity (see clause 12 of Schedule 1). It allows you to make small offers over a 12-month period that can, in total, involve up to 20 investors and raise up to $2 million without having to produce full documentation. Any offer that would result in you exceeding either or both those limits requires full documentation under part 3.

If over several 12-month periods you gain more than 50 shareholders from small offers, you'll become a FMC reporting entity. Your next balance date will become your first FMC balance date.

Related documents

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