• About
• Publications
• Exemptions
• Notices
• What's new?
• International
• Speeches
• Information for investors
• Contact us
• Site map
• Home

Summary of

Securities Act (Credit Unions) Exemption Notice 2005

2005/6

Gazetted on 27 January 2005
Expires on 31 January 2010

Effects of the exemption
Credit unions are not required to disclose a maximum number of securities that can be allotted under any prospectus, or to disclose the expenses associated with an individual issue.

Credit unions do not need to keep a register under the Securities Act 1978, or to send certificates to security holders, on the condition that statements of holdings are sent out every 6 months, and on request.

Standard provisions for trust deeds relating to debt securities are modified to make them better suited to credit unions.

Background
This exemption renews the substantive provisions contained in the Securities Act (Credit Unions) Exemption Notice 2000, which expired on 31 December 2004.

The exemption
Credit unions are exempt, subject to conditions, from -

• sections 37A(1)(d), 51, 52 and 54 of the Securities Act 1978;
• clauses 1(3) and 11 of the Second Schedule of the Regulations;
• regulation 24 of the Securities Regulations 1983, to the extent that clauses 1(2) and 3 of the Fifth Schedule are required to be contained in the trust deed.

Conditions
The exemption from section 54 of the Securities Act 1978 is subject to the condition that the credit union sends a statement of holdings to each holder of its debt securities at any time on request, and at least once every 6 months.

The exemption from regulation 24 of the Securities Regulations 1983 is subject to the condition that clauses specified in the notice are included in the trust deed for the debt securities.

Reasons
The Securities Commission considers that it is appropriate to grant the exemptions contained in this notice because they are consistent with the policy of the previous exemptions granted to credit unions under the Securities Act (Credit Unions) Exemption Notice 2000 (SR 2000/9). There has been no change to the rationale for these exemptions. That rationale is -

• there is no maximum amount to be issued under any prospectus, as issues are continuous, and the imposition of an arbitrary maximum amount would not add to investor protection. Registered banks are already exempt from these requirements and it is consistent to grant a similar exemption for credit unions;
• credit unions are already required under the Friendly Societies and Credit Unions Act 1982 to maintain a register of members and to have it available for inspection. It is not necessary to duplicate these requirements under sections 51 and 52 of the Securities Act 1978;
• the exemption from section 54 of the Act (requirement to issue certificates evidencing securities) is commonly available to continuous issuers. It relieves the compliance burden of sending an individual certificate for each deposit. The condition requires a statement to be issued to security holders every 6 months or on request;
• the exemption from regulation 24 of the Securities Regulations 1983 tailors the terms of trust deeds so that they better fit the circumstances of credit unions.