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Summary of

Securities Act (Overseas Employee Share Purchase Schemes) Exemption Amendment Notice (No 2) 2004

2004/375

Gazetted on 26 October 2004

Effects of the exemption
Danfoss A/S is added to the list of overseas issuers in Schedule 1 of the Securities Act (Overseas Employee Share Purchase Schemes) Exemption Notice 2002 ("principal notice"). Danfoss A/S is therefore able to take advantage of the exemptions granted under the principal notice, subject to the conditions set out in that notice. This means Danfoss A/S can offer shares to its New Zealand employees, without having to comply with the disclosure, accounting, and record keeping requirements of the Securities Act 1978 and the Securities Regulations 1983, so long as it provides alternative information about its share scheme.

Background
Danfoss A/S has a subsidiary company in New Zealand, and wishes to allow its New Zealand employees to purchase shares in Danfoss A/S. Danfoss A/S is not currently listed on any stock exchange and so must be specified in order to use the exemptions provided by the principal notice.

Specified overseas issuers
Schedule 1 of the principal notice is amended by inserting, after the item relating to Clemenger Communications Limited, the following item: Danfoss A/S (a company incorporated under the laws of Denmark)

Reasons
The Securities Commission has adopted criteria for the naming of an overseas company as a specified overseas issuer. These are that the company should-

• be incorporated in a jurisdiction specified in Schedule 2 of the principal notice; and
• have in place arrangements for eligible shareholders to sell their shares, either through an alternative or internal market or through a repurchase facility, where the Commission considers the arrangements provide adequate liquidity for shareholders and adequate information to assist shareholders' decision making.

The Securities Commission considers it appropriate to name Danfoss A/S as a specified overseas issuer because-

• Danfoss A/S is incorporated in Denmark, a jurisdiction named in Schedule 2; and
• the Securities Commission considers that the internal market and repurchase facilities put in place by Danfoss A/S provide sufficient liquidity and information to adequately protect shareholders.