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Summary of

Securities Act (Ashburton Building Society) Exemption Notice 2004

2004/244

Gazetted on 19 August 2004
Expires on 31 October 2009

Effects of the exemption
The Ashburton Building Society is able to prepare a short form prospectus for its offer of shares in the society to existing shareholders.

Background
The Ashburton Building Society plans to offer ordinary shares to existing members of the Society by way of a renounceable rights issue. The Society lends on the security of first registered mortgages on farms, commercial and residential property in New Zealand, using retail deposits from the public. The Society's shares are quoted on NZAX.

The exemption
The Ashburton Building Society is exempted from regulation 3(3) of the Securities Regulations 1983.

Conditions
The exemption is subject to the following conditions:

• a copy of the Society's most recent financial statements has already been sent to all members of the Society or is attached to all copies of the rights prospectus;
• the rights prospectus contains the following:
  • the information usually required in a prospectus for equity securities under clauses 1, 9, 19(1), and 21 of the First Schedule of the Regulations;
  • the date of the statement of financial position in the financial statements;
  • information on where to obtain copies of the financial statements free of charge;
  • a statement by the directors as to whether any material matters have arisen since the latest statement of financial position.

Reasons
Building society shares are participatory securities in terms of the Securities Act 1978. However, some of those shares have the characteristics of equity securities. The Commission has previously recognised this in the Securities Act (Building Societies) Exemption Notice 2002, which allows a prospectus in respect of building society shares to contain the information usually required in a prospectus for equity securities.

The exemption is consistent with the policy of the Securities Act (Building Societies) Exemption Notice 2002, but extends the effect of that exemption to treat a rights issue by the Ashburton Building Society as though it were an issue of equity securities.