First published 24 September 2015
We are consulting on whether charities issuing debt securities should be subject to standard Financial Markets Conduct Act 2013 (FMC Act) obligations. The FMC Act requires organisations offering debt securities to disclose certain information and to have a licensed supervisor.
Currently, registered charities whose total planned or existing debt is $15 million or less, are exempt from similar requirements under the Securities Act 1978, which lowers their compliance obligations.
This current charities exemption is due to expire on 30 November 2016. We are reviewing whether similar relief should be given under the FMC Act.
We propose that no exemption be granted to charities issuing debt securities, and to subject them to standard FMC Act requirements. We would like your feedback on our proposal.
Submissions closed on Thursday 5 November.
All comments should be submitted to consultation@fma.govt.nz with the subject line: ‘Charities raising funds through debt securities’: [Your entity name]’.
Update
10 November 2015
We are currently considering submissions and expect to finalise our decision before the end of the year. We will publish this on our website. We will contact those who made submissions, as well as the charities that are currently relying on the current Securities Act (Charity Debt Securities) Exemption Notice 2013.
In the meantime, we have received questions about the identity of charities that rely on the current exemption. The number of charities relying on the exemption, and the extent of securities issued, has generally declined in recent years. The following charities have relied on the exemption to issue securities and continue to have securities on issue. Some of these continue to offer new securities, while others are not issuing new securities and are repaying the securities they already have on issue.
- Catholic Diocese Auckland
- Catholic Diocese Hamilton
- Catholic Diocese Palmerston North
- Catholic Diocese Wellington
- Catholic Diocese Dunedin
- The Catholic Development Fund of the Christchurch Catholic Diocese
- Trade Aid Ethical Trust
- Bible Society Development Fund NZ Inc
- The Kingdom Resources Trust
- Wesleyan Investment Foundation
- Just Dollars Trust
- Quaker Investment Ethical Trust
- Presbyterian Savings and Development Society
- Catalyst Microfranchising
- Stewards Foundation (NZ) Incorporated
