Financial Markets Conduct (Incidental Offers) Exemption Notice 2021

The Financial Markets Conduct (Incidental Offers) Exemption Notice 2021 continues the existing class relief for five years for “incidental offers” by overseas issuers. We consider an offer to be “incidental” when New Zealand investors are the inadvertent target of an offer (such as a rights issue or a dividend reinvestment plan) made to existing holders of financial products listed on an overseas exchange in a jurisdiction with a high-quality regulatory regime. The notice provides exemptions from disclosure and governance requirements in Parts 3 and 4 of the FMC Act, and also provides that the offers are not regulated offers under the FMC Act.

The exemption notice recognises the compliance burden for issuers in eleven specified countries subject to regulatory oversight broadly equivalent to New Zealand and making offers that only incidentally target New Zealand investors.

Two substantive changes from the 2016 notice have been made. First, the exemption notice provides a list of ‘Overseas GAAPs’ in Schedule 1 that we have assessed as providing high quality information to investors and therefore can be used in place of NZ GAAP. This list has been amended to include UK IFRS as a result of Brexit. The second substantive change relates to clarifying the scope of the definition of ‘overseas listed products’ to include dividend reinvestment plans that create new products.