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Summary of

Securities Act (ING (NZ) Administration Pty Limited) Exemption Notice 2005

2005/38

Gazetted on 3 March 2005
Expires on 30 June 2008

Effects of the exemption
ING (NZ) Administration Pty Limited ("ING") is not required to include a prospective statement of cash flows in the registered prospectus for units in an Australian unit trust established under its master trust deed poll.

ING is also not required to hold annual meetings to consider the unit trust's financial statements.

Background
ING is the trustee and manager of a unit trust established under New South Wales law, but offering units to the public in New Zealand. The units are issued under a master trust deed poll executed by ING. The trust is an investment fund, and The New Zealand Guardian Trust Company Limited is the statutory supervisor.

As an Australian unit trust, the fund does not meet the definition of "unit trust" in the Securities Act 1978 because this definition is restricted to unit trusts created under the New Zealand Unit Trusts Act 1960. This means that units in the trust are participatory securities for the purposes of securities law.

The exemption
ING is exempted, in respect of the specified participatory securities, from:

• clause 7(5) of the Third Schedule of the Securities Regulations 1983; and
• clause 4(1)(a) of the Seventh Schedule.

Reasons
The Commission considers that it is appropriate to grant the exemption from clause 7(5) of the Third Schedule of the Securities Regulations 1983 because the unit trust's fund invests in market securities for which meaningful forecasts are very difficult to achieve.

The Commission considers that it is appropriate to grant the exemption from clause 4(1)(a) of the Seventh Schedule of the Securities Regulations 1983 because -

• Australian unit trusts appear to be more akin to a New Zealand unit trust than they are to other participatory schemes. New Zealand unit trusts are not subject to an equivalent obligation; and
• the costs of holding a meeting to approve the financial statements appear to outweigh the benefits to unit holders; and
• the statutory supervisor and holders of one-tenth or more of the issued units are still able to call a meeting under clause 4(1)(b) and clause 4(2) of the Seventh Schedule of the Regulations to give opinions or directions in relation to the exercise of the statutory supervisor's powers; and
• the exemption is in accordance with previous Commission decisions.