Securities Act (Overseas Listed Issuers) Exemption Notice


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9 October 1995

News release

Securities Act (Overseas Listed Issuers) Exemption Notice

The Chairman of the Securities Commission, Mr Euan Abernethy, has announced that the Securities Commission has decided today to promulgate new procedures to make it less costly and difficult for some overseas listed companies to access the New Zealand securities markets. These new procedures will appear in a Securities Act (Overseas Listed Issuers) Exemption Notice which is expected to be effective on Friday next, 13 October. The Notice, when gazetted, will allow companies which are incorporated in certain well established and well known overseas jurisdictions and which are listed on approved Stock Exchanges, to use overseas prospectuses to make offers of securities in New Zealand.

The exemption is subject to various conditions including a condition that the overseas issuer must appoint an agent for service of documents in New Zealand. The issuer must also file certain documents with the Registrar of Companies at Wellington and the overseas prospectus must contain or be accompanied by some additional information relevant to New Zealand investors.

Mr Abernethy said that the Commission has received and considered a large number of submissions from interested parties in response to proposals for an exemption of this kind set out in two Discussion Papers.

The general purpose of the exemption is to provide increased opportunity for New Zealand investors to participate in overseas issues while substantially lowering the compliance and transaction costs for overseas issuers. As investment by institutions and the general public grows in New Zealand, it is important and desirable that New Zealand investors have access to a wide range of choices for savings and investment. This new initiative will allow New Zealand investors further opportunity for diversification.

The Notice also provides a sound base from which the Commission may seek to negotiate the cooperation of overseas jurisdictions to reciprocal arrangements for New Zealand issuers.

The Commission reminds New Zealand investors that investing with overseas issuers carries with it some elements of risk about the disclosure of information and the enforcement of obligations which would not occur in respect of a New Zealand issue. Offers by overseas issuers will, for the most part, be governed by the law of the particular overseas jurisdiction in question.

An initiative on this scale, Mr Abernethy concluded, has had no parallel elsewhere in the world and demonstrates once again our pre-eminence on world markets in reducing compliance costs and enhancing investment opportunities in establishing markets.

John Farrell
Chief Executive

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