The Securities Commission has issued a new exemption notice -
the Securities Act (Directors) Certificates - Collective Investment
Schemes) Exemption Notice 2009 (Notice).
The Notice provides similar exemptions to those in the temporary
exemption gazetted in December of last year.
The Notice applies to unit trusts, participatory securities and
superannuation schemes (including Kiwisaver schemes).
There are restrictions on which schemes can utilise the
exemption based on liquidity of underlying assets and an exposure
to particular issuers.
Under section 37A(1A)(c)(i) of the Securities Act 1978 a
certificate extending the life of a prospectus for up to nine
months may be registered. Two directors must certify on behalf of
all directors that the financial position of the relevant scheme
has not materially and adversely changed in the period from the
date of the statement of financial position in the prospectus, to
the date of the certificate.
This causes problems where adverse financial change is caused
solely by reason of market performance. The Notice provides for a
prospectus to be extended by a directors' certificate where
adverse financial change is caused by market performance, and the
prospectus is not otherwise false or misleading.
Relevant conditions are that:
complies with section 37A(1A) in all respects except regarding
the financial position not material and adversely changing
is delivered to the Companies Office for registration with a
copy of interim financial statements for the relevant fund
is copied to the Securities Commission together with the
interim financial statements
contains the prescribed statements required in the notice.
The issuer's internet contains a copy of the certificate
and the interim financial statements, including any internet page
on which the current unit price for the relevant scheme is
No allotments are made nine months after the date of the
interim financial statements.
No allotments are made after 30 September 2010 (for a
prospectus registered before 31 December 2009) or 30 September 2011
(for a prospectus registered before 31 December 2010).
The certificate must contain the following:
A statement to the effect that the value of the net assets of
the scheme has reduced from that shown in the statement of
financial position in the prospectus and the reduction is mainly
(a) a decline in market prices of assets
(b) a significant amount of investor redemptions, or
(c) a combination of both.
A statement that, in the opinion of all directors of the issuer
after due inquiry, the prospectus is not, at the date of the
certificate, false or misleading in a material particular by reason
of failing to refer or give proper emphasis to adverse
A statement to the effect that interim financial statements
have been registered and are available on the issuer's website
is sued previously and that investors should review those financial
statements to understand the updated financial position of the
For an offer to which the Securities Regulations 1983 apply, the
interim financial statements must be prepared in accordance with
either NZ IAS 34 (except that comparative information may be
prepared on the basis of a comparison with the most recent audited
financial statements), or the Securities Regulations 1983, (except
those statements need not be audited and a similar provision
applies in relation to comparative financial information).
Where the Securities Regulations 2009 apply to the offer, they
must be prepared in accordance with NZ IAS 34 (except with the
similar provision applying, as detailed above, in respect of
corporate financial information).
DLA Phillips Fox is one of the largest legal firms in
Australasia and a member of DLA Piper Group, an alliance of
independent legal practices. It is a separate and distinct legal
entity. For more information visit
This publication is intended as a first point of reference and
should not be relied on as a substitute for professional advice.
Specialist legal advice should always be sought in relation to any
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