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Summary of

Securities Act (OM-IP Companies) Exemption Notice 2004

2004/474

Gazetted on 23 December 2004
Expires on 31 December 2009

Effects of the exemption
OM-IP companies are able to offer shares in New Zealand using prospectuses that comply with Australian law, subject to conditions.

Background
The OM-IP companies are registered in Australia as overseas companies, and so are required to comply with Australian securities law. The companies are not able to rely on the Securities Act (Australian Issuers) Exemption Notice 2002 (the 'AI notice') as they are incorporated in the Cook Islands.

This notice replaces the Securities Act (OM-IP Companies) Exemption Notice 1999 (the '1999 notice'), which expired on 31 December 2004.

This notice differs from the 1999 notice as it reflects changes to class exemption notices for Australian offers (the AI notice and the Australian Registered Managed Investment Schemes Exemption Notice 2003) made since 1999. In particular, significant changes have been made to the conditions concerning the provision of documents to the Registrar of Companies and the information that must be contained in an investment statement.

The exemption
OM-IP companies incorporated in the Cook Islands and registered in Australia as overseas companies are exempted from:

• sections 37 and 51 to 54 of the Securities Act 1978;
• section 38(a) of the Securities Act 1978 to the extent that this requires an Australian prospectus to refer to an investment statement; and
• section 38A of the Securities Act 1978 and regulations 11 to 18 and 21 to 23 of the Securities Regulations 1983 in respect of an Australian prospectus, but not in respect of an investment statement or other advertisement.

Conditions
The exemptions from sections 37 and 38A of the Securities Act 1978 and regulations 11 to 18 and 21 to 23 of the Securities Regulations 1983 are subject to the following conditions:

• Australian prospectus:
  • there must be an Australian prospectus relating to the shares at the time that offers are made or are open for acceptance in New Zealand;
  • this prospectus should not contain a statement about listing or intended listing of the shares on NZX unless the statement has been approved by NZX; and
  • it is a term of each share offer that the company will, within 5 working days of receiving a request, send to investors free of charge:
    • the Australian prospectus, and
    • copies of any documents that under Australian law must accompany the Australian prospectus.
• Documents to be received by Registrar of Companies:
  • before a share offer is made or open for acceptance in New Zealand, a copy of each of the following documents has been received by the Registrar of Companies:
    • the Australian prospectus relating to the shares;
    • any document, or part of a document, lodged with the Australian Securities and Investments Commission (ASIC) under Australian law that is referred to in the Australian prospectus and is taken to be included in that prospectus under section 712 of the Corporations Act 2001;
    • any exemption granted by ASIC in relation to the offer;
    • any certificate of lodgement or registration of the Australian prospectus;
    • the certificate of incorporation of the company;
    • the details of the constitution of the company;
    • any documents that amend or supplement any of the above documents that are in existence at the time of the offer; and
  • a copy of any document that amends, supplements or replaces any of the above documents has been received by the Registrar of Companies before any allotment of the shares in New Zealand after the amendment, supplement or replacement takes effect.
• Investment statements:
  • any investment statement for the shares includes statements to the following effect:
    • allotments of the shares will be made as specified in the Australian prospectus and as required under Australian law;
    • investors should satisfy themselves as to the tax implications of investing in the shares;
    • investing in the shares may carry a currency exchange risk;
    • New Zealand financial reporting requirements and those applying to the company may be different and the financial statements of the company may not be compatible in all respects with financial statements prepared in accordance with New Zealand law;
    • the company may not be subject in all respects to New Zealand law;
    • the company's incorporation in the Cook Islands may materially affect the availability of information about the company and its directors;
    • although copies of the Australian prospectus and other documents have been received by the Registrar of Companies, the prospectus has not been registered in New Zealand and may not contain all the information required in a New Zealand registered prospectus;
    • the general nature and effect of any exemption, order, or declaration that may have been granted by the Australian Securities and Investments Commission in respect of the share offer;
    • it is not a condition of the exemption that the shares are listed on NZX, and if they are not listed, New Zealand investors may not have access to company information in the same way as if the company was an NZX listed issuer; and
  • any investment statement for the shares includes information or statements to the following effect, under the heading "Agreement as to Jurisdiction":
    • in the event of a dispute concerning the share contract, the company
      • agrees to submit to the non-exclusive jurisdiction of the New Zealand courts; and
      • has instructed their New Zealand agent to accept service on the company's behalf; and
      • agrees that this statement is an agreement with each investor in terms of section 389(1)(e) of the Companies Act 1993; and
    • despite the above, the share contract may not always be enforceable in New Zealand courts; and
    • the name and address of the company's New Zealand agent; and
  • any investment statement for the shares contains no statement referring to listing or intended listing of the shares on NZX unless it has been approved by NZX or unless it states that listing is not being sought; and
  • any investment statement for the shares refers to the Australian prospectus wherever the Act or Regulations require an investment statement to refer to a registered prospectus.
  The conditions relating to investment statements are not breached if there are immaterial differences between the information required to be in the investment statement and the information presented in the statement.
• Offers to be made in Australia at same time:
  • at the same time as offers of the shares are made or are open for acceptance in New Zealand, offers of the shares are also made or are open for acceptance in Australia in accordance with Australian law.

The exemptions from sections 37, 38(a), 38A, and 51 to 54 of the Securities Act 1978 and regulations 11 to 18 and 21 to 23 of the Securities Regulations 1983 are also subject to the following conditions:

• the Australian prospectus and every investment statement, or an accompanying document, contains a statement that the company will provide New Zealand shareholders with:
  • every annual report of the company, containing audited annual accounts and any quarterly reports provided to the company's shareholders in Australia;
  • copies of every material contract entered into by the company each year;
  • all the information required under Australian law to be disclosed to Australian shareholders;
  • the annual guarantee notices, stating the current amount guaranteed in respect of the share offer;
  • the incorporation details of the guarantor;
  • the registration details of the guarantor as a bank licensed by a central banking authority overseas or registered as a bank under section 2(1) of the Reserve Bank of New Zealand Act 1989;
  • all other documents required under Australian law to be lodged with ASIC and made available to Australian shareholders;
  • monthly information on the net asset value of the shares;
  • a facility for shareholders to obtain information about the net asset value of the shares and the funds investment strategy of the company;
  • access to a copy of the register of shareholders; and
• the Australian prospectus used in New Zealand contains, or is accompanied by a document that contains:
  • the incorporation details of the company;
  • a summary of the implications under New Zealand tax law of investing in the shares;
  • the New Zealand address where a copy of the share register may be inspected; and
• before shares are offered or open for acceptance in New Zealand, the Registrar of Companies receives the following :
  • a copy of the memorandum of appointment of the company's Australian agent; and
  • information about the directors and officers of the company, including names and addresses.

Reasons
The OM-IP companies are incorporated outside Australia, but intend to offer securities in compliance with the laws of Australia. On this basis an exemption similar to the class exemption for offers of equity securities made by Australian companies will provide New Zealand investors with information to assist them to make their investment decisions. The additional conditions require the issuer to provide New Zealand investors with additional periodic information so that those investors will continue to be informed about their investments, and to require a copy of the share register to be maintained in New Zealand so that this can be accessed.

Changes to the 1999 notice have been made to reflect the changes made to the Securities Commission's class exemptions for Australian offers made since 1999.