Media Release
12 April 2012
The Financial Markets Authority is seeking submissions from market participants, investors, representatives and advisers on review of 44 class exemption notices due to expire later this year.
FMA is able to grant exemptions from provisions of various securities laws. Exemptions remove rigidities in the law and ensure standards set for market participants are reasonable and cost-effective. They provide relief where the costs of compliance are not matched by improved outcomes for investors or market participants.
FMA will review each of the 44 notices before they expire. As part of the review process FMA is calling for submissions from all interested parties on their experience with the notices, and proposals on whether, and if so how, the exemptions should be renewed consistently with FMA's regulatory objectives.
The final date for submissions is 7 May 2012. The consultation paper and request for feedback can be found here.
Ends
Contact:
Nick Stride on 09 985 4868 or 021 739 052
Background
FMA may grant exemptions from various provisions of the Securities Act 1978, Financial Reporting Act 1993, Securities Markets Act 1988, Financial Advisers Act 2008 and regulations made under those Acts.
Forty-four class exemption notices expire between June and November 2012, with the bulk expiring on 30 September 2012. Forty-two provide exemptions from the provisions of the Securities Act 1978 and two provide exemptions for overseas issuers from the Financial Reporting Act.
Purpose of exemptions
Exemption notices recognise that organisations and entities with widely differing aims and circumstances are affected by securities law. Full compliance with all the requirements of securities law will not always provide the best outcomes for investors, and can also result in unnecessary compliance costs. Examples of exemptions on which submissions are being called for are:
Real Property Developments
This notice recognises that memberships and shares offered as ancillary features to real estate transactions can allow residents in a property development to use and enjoy communal facilities. They are not investments in the usual sense. The notice exempts the developer and the society or company from the standard offer document disclosure requirements, among other things.
Charitable and Religious Purposes
This notice recognises that the investors in debt securities offered by charitable and religious organisations are motivated by a desire to support the charitable goals of the organisation in question, as well as possibly making an investment. The notice exempts charitable and religious organisations from the trustee and trust deed, and standard offer document disclosure requirements, among other things.
Note that the above are simplified examples intended to assist understanding of the purpose of Class Exemptions. They should not be relied on as a comprehensive description of the conditions of an exemption or the extent of disclosure requirements.
