Printed from: http://www.seccom.govt.nz/publications/documents/nz-aus/01.shtml?print=true on Wed 25 November 2009

 

Securities Commission New Zealand Australian Securities and Investment Commission.

 

OFFERING SECURITIES IN NEW ZEALAND AND AUSTRALIA UNDER MUTUAL RECOGNITION

January 2009

A. OVERVIEW

Key points

  1. The trans-Tasman mutual recognition scheme allows an issuer to offer securities or interests in collective or managed investment schemes in New Zealand and Australia using one disclosure document prepared under regulation in its home country.
  2. Issuers who wish to operate under the scheme will be able to comply with minimal entry and ongoing requirements agreed to between the two countries and prescribed in each country's law.
  3. ASIC, the New Zealand Registrar of Companies (NZCO) and the NZSC have established processes for cooperation between the authorities in administering the mutual recognition scheme.

The mutual recognition scheme

  1. The trans-Tasman mutual recognition scheme for offers of securities promotes investment between Australia and New Zealand. It allows an issuer to offer securities or interests in managed or collective investment schemes in both countries using one disclosure document prepared under the fundraising laws in its home country.
  2. The aim of the scheme is to remove unnecessary regulatory barriers to trans-Tasman securities offerings and reduce costs of capital raising in both Australia and New Zealand. At the same time the scheme maintains investor protection through appropriate disclosure and supervision of offerings.
  3. The mutual recognition scheme is contained in the following law:
    1. for New Zealand issuers wishing to extend an offer into the Australian market (a 'recognised offer')-Chapter 8 of the Corporations Act 2001 (Australian Corporations Act) and the Corporations Amendment Regulations 2008 (No.2) (the Australian mutual recognition regulations), which amend the Corporations Regulations 2001; and
    2. for Australian issuers wishing to extend an offer into the New Zealand market (a 'regulated offer')-Part 5 of the Securities Act 1978 (NZ Securities Act) and the Securities (Mutual Recognition of Securities Offerings-Australia) Regulations 2008 (NZ) (the NZ mutual recognition regulations).
  4. To help Australian and New Zealand issuers who wish to participate in the scheme, the New Zealand Securities Commission (NZSC) and the Australian Securities and Investments Commission (ASIC) have issued this joint guide highlighting the key features of each country's securities offering regime and key requirements under the scheme.

Requirements for issuers

  1. Under the mutual recognition scheme, issuers will not be required to comply with most of the requirements of the other country's fundraising laws. Instead, issuers who wish to operate under the scheme will be able to comply with some minimal entry and ongoing requirements: see Table 1 and Section B (for New Zealand issuers) and Section C (for Australian issuers).

Table 1: Requirements for issuers under the mutual recognition scheme

  New Zealand issuers Australian issuers
Entry requirements (before making an offer) The offer must require disclosure under Part 2 of the NZ Securities Act. The offer must require disclosure under the Australian Corporations Act.
The issuer must be incorporated under the law of New Zealand and not be disqualified or banned. The issuer must be incorporated by/under the law of Australia, or be a registered foreign company under the Australian Corporations Act, and not be disqualified or banned.
The offer can apply to shares, debentures and interests in managed investment schemes, and certain rights, interests and options in these financial products under s1200A of the Australian Corporations Act. The offer can apply to equity or debt securities, interests in collective investment schemes, and any interest in, or option to acquire these securities under reg 4 of the NZ mutual recognition regulations.
The issuer must lodge with ASIC a written notice of the intention to make the offer, including an offer document that contains a warning statement. The issuer must also notify NZCO. The issuer must lodge with the NZCO a written notice of the intention to make the offer, including an offer document that contains a warning statement. The issuer must also notify ASIC.
Ongoing requirements (while the offer is open) Issuers must comply with specific ongoing offering conditions, which include ensuring that the offer remains open to investors in the home jurisdiction and notifying the host regulator of certain circumstances.

Role of regulators

  1. In Australia, ASIC is the regulator for offers of securities and investigates suspected contraventions of Australian law.
  2. In New Zealand, there are two regulators for securities offers. The NZSC is responsible for market conduct and has enforcement powers to require offer documents and advertisements to comply with New Zealand law. The New Zealand NZCO is responsible for the registration of corporate bodies and corporate documents, which includes registration of prospectuses for offers of securities in New Zealand.
  3. Under the mutual recognition scheme, ASIC, the NZSC and the NZCO will exercise their usual powers for offers of securities. NZCO, NZSC and ASIC have also established arrangements for cooperation and information sharing in administering the mutual recognition scheme: see Section D.
INDEX | NEXT