26 September 2024

Financial Markets Conduct (Spark New Zealand Limited Group) Exemption Notice 2024

Name of Notice Financial Markets Conduct (Spark New Zealand Limited Group) Exemption Notice 2024
Gazette Notification Date 2024-09-24
Date In Force 2024-09-26
LI Number N/A
SL Number N/A
Act Financial Markets Conduct
Type Individual Exemption
Expiry Date 2029-09-25

The Financial Markets Conduct (Spark New Zealand Limited Group) Exemption Notice 2024 (Notice) exempts:

  • subsidiaries of Spark New Zealand Limited (Spark) other than Spark Finance Limited (Spark Finance) from certain financial reporting obligations which apply to entities in receipt of funds from a conduit issuer under Part 7 of the Financial Markets Conduct Act 2013 (Act); and
  • Spark Finance from various related disclosure obligations in respect of product disclosure statements and disclose register entries under the Financial Markets Conduct Regulations 2014 (Regulations).

Spark Finance operates as an intra-group funding vehicle for Spark and its subsidiaries (together, the Spark Group). Spark Finance on-lends the funds it raises to members of the Spark Group. Both Spark and Spark Finance are FMC reporting entities under the Act. If any of Spark’s other subsidiaries receive 10% or more of the money raised by Spark Finance under a regulated offer, or an offer made in certain prescribed circumstances, of debt securities (Spark Debt Securities) they may become “recipients of money from a conduit issuer” within the meaning of section 453 of the Act, and accordingly become FMC reporting entities in their own right.

The Notice is subject to a number of conditions including requirements for consolidated financial statements for the Spark Group to be prepared, audited and lodged in accordance with Part 7 of the Act, Spark to provide unlimited guarantees of Spark Debt Securities, and Spark Finance to disclose in its financial statements certain details about any such guarantees that are subordinated.

The key reasons for granting the exemption (which are set out in full in the Statement of Reasons accompanying the Notice) include:

  • the conduit issuer provisions of the Act are intended to require public reporting by entities that have the effective use of money raised from retail investors, but have structured themselves to avoid being FMC reporting entities under the Act. Those circumstances do not apply to the Spark Debt Securities;
  • where Spark provides an unlimited guarantee of the Spark Debt Securities, the risk of investment will be spread across the Spark Group. Consolidated financial statements for the Spark Group will provide useful information about the risk of investing in Spark Debt Securities; and
  • identifying in the relevant product disclosure statement and register entry details about the recipients, amount and use of funds raised under an offer of Spark Debt Securities is likely to increase compliance costs without providing useful information for investors.

Download Financial Markets Conduct (Spark New Zealand Limited Group) Exemption Notice 2024 [PDF] 208KB