A Bill has been introduced into federal parliament which if passed, will mean reduced compliance costs for New Zealand issuers in making offers of securities and interests in managed investment schemes to Australian investors and vice versa.
Background to the Bill
In 2006, the Australian and New Zealand governments entered into an agreement to legislate for mutual recognition of securities offerings on both sides of the Tasman. The Corporations (NZ Closer Economic Relations) and Other Legislation Amendment Bill 2007 (Bill) was introduced into the House of Representatives on 28 March 2007. The mutual recognition scheme featured in the Bill implements the agreement between the two governments. The Bill amends the Corporations Act 2001 (Corporations Act) and the Trade Practices Act 1974.
Mutual recognition measures
The mutual recognition measures under the Bill will allow a New Zealand entity to offer securities and interests in managed investment schemes in Australia and New Zealand based largely on compliance with New Zealand fundraising laws. Currently, in order to issue securities or interests in managed investment schemes in Australia, a New Zealand issuer must comply with regulatory requirements in New Zealand and Australia unless an exemption applies.
Australian issuers will also be able to offer securities in New Zealand under reciprocal arrangements. It is anticipated that the corresponding New Zealand regulation, the Securities (Mutual Recognition of Securities Offering – Australia) Regulations 2006, will be enacted in New Zealand once the Australian legislation is passed.
It is proposed that a New Zealand entity wishing to make an offer in Australia under the mutual recognition regime must meet certain entry requirements, including filing with ASIC a notice containing prescribed information in relation to the offeror and the offer and lodge prescribed documents (eg. offer documents required by the laws of New Zealand and constituent documents of the offeror).
The mutual recognition measures under the Bill are aimed at reducing costs for issuers in both countries which currently mean that securities offers are sometimes not extended to investors across the Tasman. It is intended that the measures will increase issuers' access to potential investors and enhance competition in capital markets and choice for investors.
Other measures under the Bill
In addition to the mutual recognition of securities offerings, the Bill also proposes initiatives to reduce filing requirements for New Zealand companies conducting business in Australia, and deals with information sharing between the ACCC and other agencies and the protection of certain information provided to the ACCC. Articleby Iris Dielmann
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