New Zealand Securities Commission - The Bulletin:July 2006

(continued from page 1) Disclosure by finance companies The registered prospectus has more detailed information including financial statements and specific legal information. It should contain or refer to all the information an investor needs to make an informed investment decision. All advertisements for the offer, including the investment statement, must be consistent with the registered prospectus. The prospectus and financial statements must be registered with the Companies Office, where the public can view them, and they must be available on request from the issuer. The investment statement and registered prospectus must be accurate and not misleading as at the date they are prepared. If there is an adverse change during the offer period so that either document becomes false or misleading in a material matter by failing to refer or give proper emphasis to those adverse circumstances, then the issuer must stop allotting securities until the documents are corrected. Finance company debenture stock must be governed by a trust deed between the issuer and a trustee. The trustee must be approved by the Securities Commission or have been established by Act of Parliament. The trustee has certain rights and powers to look after the interests of investors. These are set out in the trust deed along with restrictions on what the issuer can do with investors’ money. The trust deed must also be registered at the Companies Office and available on request. The Commission’s brochure Your Right to Know: Get Informed about Investing is available from www.seccom.govt.nz and in hard copy from the Commission phone 04 472 9830. New Commission Member The Minister of Commerce is seeking a new Member for the Securities Commission. To be eligible a person must be qualified or experienced in industry, commerce, economics, law, accountancy, public administration, or securities. The position is not full time. It is likely to involve an average of 3 days work each month in Wellington. Visit www.seccom.govt.nz for details including a position description and application form.	Statement of Intent The Securities Commission has published its first Statement of Intent (SOI). A requirement of the Crown Entities Act 2004, the SOI considers the Commission’s responsibilities in the national, trans-Tasman and international contexts and sets the strategy for achieving its objectives over the next three financial years. The SOI also includes forecast financial statements and the statement of forecast performance for the year to 30 June 2007. The Commission will report against the SOI in its annual report next year. The SOI, which was tabled in the House of Representatives on 29 June 2006, is available from www.seccom.govt.nz. Commission adopts NZ IFRS The Commission is the first public sector entity to adopt New Zealand equivalents of International Financial Reporting Standards. The Commission will report under the NZ IFRS in its annual financial statements to 30 June 2006. “The Commission believed it had an obligation to set standards for public entities and decided to be an early adopter of the new standards,” Chairman Jane Diplock said. “We committed to the transition in our 2004 annual report.” Crown entities have until 30 June 2008 to make the transition.
Undertaking by The Gables
The Commission has accepted an enforceable undertaking from The Gables Limited and other related parties relating to an offer of securities to the public which had no registered prospectus or investment statement. The Gables Limited and its promoters, Aoraki Commercial Property Limited and Combined Financial Services Limited, accepted that the offer was unlawful. They undertook to refund all money raised by the offer to investors and stop advertising the offer. Undertakings given by these parties included that: any future offer of securities to the public will be made in an investment statement, registered prospectus or advertisement that complies with securities law; any employees and external marketing advisers and agents who prepare advertising for any offers of securities to the public for subscription are made aware of the requirements relating to offers of securities under securities laws; advertisements for an offer will be prepared or reviewed by professional advisers experienced in securities law.	These enforceable undertakings relate to the offer made by The Gables Limited, as well as any future offers of securities involving The Gables Limited, Combined Financial Services Limited, Aoraki Commercial Property Limited, Rhys David Morgan, Lorraine Te Atairehia, or Neville Ian Cant. “In most cases it is unlawful to offer securities to the public without an investment statement and registered prospectus. The information in these documents allows investors to make an informed investment decision,” says Kathryn Rogers, Director, Primary Markets. “People who take investment money from the public without these documents can be personally liable to repay the money plus interest and they can be prosecuted. In this case, the Commission considered that an enforceable undertaking was the appropriate outcome given the refund of investors’ monies, and that systems are to be put in place to make sure there are no further breaches.” The enforceable undertaking is on the Commission’s website.
Recent speeches Now available on the Commission’s website at www.seccom.govt.nz/speeches are: Minister of Commerce Hon Lianne Dalziel to Securities Law Update Chairman Jane Diplock to Wellington Branch, Institute of Directors Commission Member Lloyd Kavanagh to FINSIA Forum

(continued from page 1)

Disclosure by finance companies

The registered prospectus has more detailed information including financial statements and specific legal information. It should contain or refer to all the information an investor needs to make an informed investment decision. All advertisements for the offer, including the investment statement, must be consistent with the registered prospectus. The prospectus and financial statements must be registered with the Companies Office, where the public can view them, and they must be available on request from the issuer.

The investment statement and registered prospectus must be accurate and not misleading as at the date they are prepared. If there is an adverse change during the offer period so that either document becomes false or misleading in a material matter by failing to refer or give proper emphasis to those adverse circumstances, then the issuer must stop allotting securities until the documents are corrected.

Finance company debenture stock must be governed by a trust deed between the issuer and a trustee. The trustee must be approved by the Securities Commission or have been established by Act of Parliament.

The trustee has certain rights and powers to look after the interests of investors. These are set out in the trust deed along with restrictions on what the issuer can do with investors’ money. The trust deed must also be registered at the Companies Office and available on request.

The Commission’s brochure Your Right to Know: Get Informed about Investing is available from
www.seccom.govt.nz and in hard copy from the Commission
phone 04 472 9830.

New Commission Member

The Minister of Commerce is seeking a new Member for the Securities Commission. To be eligible a person must be qualified or experienced in industry, commerce, economics, law, accountancy, public administration, or securities.

The position is not full time. It is likely to involve an average of 3 days work each month in Wellington. Visit
www.seccom.govt.nz for details including a position description and application form.

Statement of Intent

The Securities Commission has published its first Statement of Intent (SOI). A requirement of the Crown Entities Act 2004, the SOI considers the Commission’s responsibilities in the national, trans-Tasman and international contexts and sets the strategy for achieving its objectives over the next three financial years.

The SOI also includes forecast financial statements and the statement of forecast performance for the year to 30 June 2007. The Commission will report against the SOI in its annual report next year. The SOI, which was tabled in the House of Representatives on 29 June 2006, is available from www.seccom.govt.nz.

Commission adopts NZ IFRS

The Commission is the first public sector entity to adopt New Zealand equivalents of International Financial Reporting Standards.

The Commission will report under the NZ IFRS in its annual financial statements to 30 June 2006.

“The Commission believed it had an obligation to set standards for public entities and decided to be an early adopter of the new standards,” Chairman Jane Diplock said. “We committed to the transition in our 2004 annual report.”

Crown entities have until 30 June 2008 to make the transition.

Undertaking by The Gables

The Commission has accepted an enforceable undertaking from The Gables Limited and other related parties relating to an offer of securities to the public which had no registered prospectus or investment statement.

The Gables Limited and its promoters, Aoraki Commercial Property Limited and Combined Financial Services Limited, accepted that the offer was unlawful. They undertook to refund all money raised by the offer to investors and stop advertising the offer.

Undertakings given by these parties included that:

any future offer of securities to the public will be made in an investment statement, registered prospectus or advertisement that complies with securities law;
any employees and external marketing advisers and agents who prepare advertising for any offers of securities to the public for subscription are made aware of the requirements relating to offers of securities under securities laws;
advertisements for an offer will be prepared or reviewed by professional advisers experienced in securities law.

These enforceable undertakings relate to the offer made by The Gables Limited, as well as any future offers of securities involving The Gables Limited, Combined Financial Services Limited, Aoraki Commercial Property Limited, Rhys David Morgan, Lorraine Te Atairehia, or Neville Ian Cant.

“In most cases it is unlawful to offer securities to the public without an investment statement and registered prospectus. The information in these documents allows investors to make an informed investment decision,” says Kathryn Rogers, Director, Primary Markets.

“People who take investment money from the public without these documents can be personally liable to repay the money plus interest and they can be prosecuted. In this case, the Commission considered that an enforceable undertaking was the appropriate outcome given the refund of investors’ monies, and that systems are to be put in place to make sure there are no further breaches.”

The enforceable undertaking is on the Commission’s website.

Recent speeches

Now available on the Commission’s website at
www.seccom.govt.nz/speeches are:

Minister of Commerce Hon Lianne Dalziel to Securities Law Update
Chairman Jane Diplock to Wellington Branch, Institute of Directors
Commission Member Lloyd Kavanagh to FINSIA Forum

THE BULLETIN July 2006