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Summary of

Securities Act (Retirement Villages) Exemption Amendment Notice 2004

2004/196

Gazetted on 29 June 2004
Expires on 30 June 2006

Effects of the exemption
The Securities Act (Retirement Villages) Exemption Notice 1999 ("principal notice") is extended to 30 June 2006, and the restriction on allotment of securities more than 6 years after the date of the prospectus is removed.

This means that, subject to conditions, retirement village operators can continue to use existing prospectuses until 2006, or until the Retirement Villages Act 2003 becomes fully operational, if this occurs earlier.

Background
The Retirement Villages Act 2003 is intended to replace the Securities Act 1978 as the regulatory regime in respect of retirement villages. However, the registration and other provisions of the Retirement Villages Act are not yet in force.

The principal notice was due to expire on 30 June 2004.

The exemption
The exemptions contained in the principal notice are extended to 30 June 2006.

Conditions
The condition of exemption contained in clause 7(2)(b) of the principal notice is revoked. Other conditions of exemption are unchanged.

Reasons
The Securities Commission considers it appropriate to extend the duration of exemptions contained in the principal notice because -

• section 107 of the Retirement Villages Act 2003, which excludes a security arising out of an offer of occupation of a retirement village from the application of the Securities Act 1978, has yet to come into force; and
• until all retirement village schemes have been registered under the provisions of the Retirement Villages Act 2003, specified issuers and persons acting on their behalf should be able to continue to have the benefit of the existing exemption.

The Securities Commission considers it appropriate to revoke clause 7(2)(b) of the principal notice, which contains a condition of the exemption from section 37A(1)(c) of the Securities Act 1978, because -

• the revocation of that paragraph removes the restriction that the allotment of securities be no more than 6 years after the specified date of the prospectus, and so allows an issuer to continue using an existing prospectus; and
• the remaining conditions of the exemption in clause 7(2) cover the requirement for an issuer to ensure its prospectus contains up-to-date information for investors.