Who needs to comply

 

The requirements explained below relate to transitional offers being made under the former Securities Act regime. From 1 December 2014, offers of financial products can also be made under the new Financial Markets Conduct Act (FMC Act) regime. 

Transitional offers under the Securities Act 1978

The transitional provisions in the Financial Markets Conduct Act 2013 (FMC Act) allow some offers of financial products to continue to be made under the former Securities Act regime.  In general:

  • Continuous issuers can continue to make offers under the Securities Act regime up until 30 November 2016. 
  • Other issuers can continue to make one-off offers under the Securities Act regime up until 30 November 2015.
  • Derivatives issuers cannot rely on the Securities Act (Authorised Futures Contracts) Exemption Notice 2002 to offer under the Securities Act regime without a prospectus and investment statement.

Anyone offering securities to the public under the former Securities Act regime needs to comply with:

  • the Securities Act 1978
  • the Securities Regulations 2009
  • and any exemptions granted under the Securities Act 1978 (to the extent applicable and still in force).

Who needs to comply, and the extent of that person's legal obligations, depends on the nature of the offer.

Issuers and promoters under the Securities Act 1978 and the Securities Regulations 2009

The persons with obligations under the Securities Act and Regulations are, primarily, issuers and promoters.

Who is an issuer?

  • Equity or debt securities -  the issuer is the person on whose behalf money paid for the securities is received.
  • Participatory securities or units in a unit trust -  the issuer is the manager of the scheme or trust.
  • For an interest in a contributory mortgage -  the issuer is the contributory mortgage broker.
  • For a life insurance policy -  the issuer is the life insurance company liable under the policy.
  • Superannuation scheme - the issuer is the superannuation trustee of the scheme.

Who is a promoter?

A promoter is a person who is instrumental in forming a plan under which securities are offered to the public. Where a promoter is a company, the directors of that company will also be promoters.

Directors of issuers are not promoters, and nor are persons who are acting solely in their professional capacity, such as legal or financial advisers.

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