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Summary of

Securities Act (Employer Superannuation Schemes) Exemption Amendment Notice 2004

2004/402

Gazetted on 18 November 2004

Effects of the exemption
The exemption amends the Securities Act (Employer Superannuation Schemes) Notice 2004 ("principal notice"). Under the principal notice, employer superannuation schemes are exempted from the need to register a prospectus.

This notice extends the principal notice to include a new group of employees, namely those employed by companies owning and operating businesses which were recently owned by the main promoter or one of its associated companies. This means that, if a business is sold, interests in a superannuation scheme that was promoted by the previous owner or parent company using the principal notice can continue to be offered to employees of that business for a transitional period of 12 months after the sale.

This notice does not change the provisions for small employer superannuation schemes.

Interpretation
The definition of employer superannuation scheme in the principal notice is extended to include a successor in business of the employer promoting the scheme. A definition of successor in business is provided in the notice.

The exemption
Employer superannuation schemes, including those offered to employees of a business that has been sold, are exempted from section 37(1) of the Securities Act 1978.

Conditions
This amendment is subject to the same conditions as the principal notice.

This amendment is also subject to the condition that the offer is made within 12 months of the business being sold by the original promoter of the employer superannuation scheme.

Reasons
A policy intention of the statutory exemption in section 5A of the Securities Act 1978 is to encourage employer-sponsored superannuation schemes. It is consistent with this policy also to encourage continuity of superannuation arrangements for employees. This amendment notice achieves those objectives by allowing a business that is disposed of by an employer who is a participant in an employer superannuation scheme to continue to use the exemption in the principal notice for a transitional period while the business sets up its own superannuation scheme.

By limiting the extension to employers that operate businesses that were formerly operated by the employer disposing of the business or an associated person of the disposing employer, the exemptions in the principal notice will not apply to superannuation schemes offered by financial institutions under which any number of unrelated employers may provide superannuation benefits for their employees.

Limiting the application of the extension to a transitional period of 12 months will allow for continuity of membership in employer superannuation schemes while encouraging new employers to develop and offer their own schemes rather than seeking to rely on continued provision of a scheme promoted by a previous employer.