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:
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
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.
We have developed a transition timetable to help you understand when you will need to comply. The key points include:
You are a licensed MIS manager
Licensed MIS managers must prepare financial statements under the FMC Act for:
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.