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12 March 2002

News Release

Securities Commission Seeks Comment on its Designation Powers for Substantial Security Holders

The Securities Commission is seeking comment on its policies relating to its power to designate certain substantial security holders. Generally these are banks, financial institutions, sharebrokers, trustee corporations and nominee companies who hold shares in the ordinary course of their business.

When designated by the Commission these holders do not have to comply with the requirements imposed by the Securities Amendment Act 1988 (the Act) provided they are acting in their ordinary business.

Substantial security holders (SSH) are those who hold five percent or more of the voting shares in a public company.

SSH are required to notify the public company and the stock exchange on which the shares are listed, of any changes to the number of shares they hold in that public company. This is required by Part II of the Act.

The Commission invites comment by Friday 31 May 2002 from interested parties and the public on the discussion paper on its policy relating to these designations.

The paper covers a range of issues including:

• Whether there is a need for a power of designation in New Zealand's securities regulatory system?
• Whether the Commission should be empowered to designate persons?
• What criteria and procedures should be applied by the Commission in determining whether to designate persons?
• Whether there is a need for the Commission to have an ongoing regulatory role in respect of designated persons?
• Whether the Commission should designate all registered banks on a class basis?

* * * * *

Contact: Catherine Chapman phone (04) 471 7659

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