On 10 October 2007, Addisons reported on proposed amendments
to the Corporations Act 2001 (Cth) ("Corporations
Act") dealing with mutual recognition of securities
offerings between Australia and New Zealand. Those amendments
recently came into force enabling Australian and New Zealand
issuers to take advantage of reduced regulatory requirements
when issuing securities across the Tasman.
The new requirements for Australian entities that intend to
issue securities in New Zealand are found in Part 5 of the
Securities Act 1978 (NZ) and the Securities (Mutual Recognition
of Securities Offerings – Australia) Regulations 2008
(NZ). The new requirements for New Zealand entities that intend
to issue securities in Australia are found in Chapter 8 of the
Corporations Act and the Corporations Regulations 2001 (Cth),
as amended by the Corporations Amendment Regulations 2008
Essentially, the mutual recognition scheme allows Australian
and New Zealand issuers to use the same disclosure document to
offer securities in both countries provided that that
disclosure document complies with the laws of the
issuer's home jurisdiction.
In relation to Australian issuers, the mutual recognition
scheme can apply to offers of equity or debt securities,
interests in collective investment schemes and any interest in,
or option to acquire, these securities under Regulation 4 of
the New Zealand Regulations. In relation to New Zealand
issuers, the mutual recognition scheme can apply to offers of
shares, debentures and interests in managed investment schemes
and certain rights, interests and options in these financial
products under section 1200A of the Corporations Act.
The Australian Securities & Investments Commission
("ASIC") has issued Regulatory Guide 190 entitled
"Offering securities in New Zealand and Australia under
mutual recognition" explaining the new regime. According
to the Regulatory Guide, ASIC, the New Zealand Securities
Commission and the New Zealand Companies Office have
established arrangements to administer the mutual recognition
laws and procedures.
In an effort to further simplify and encourage cross border
transactions, on 16 June 2008 ASIC issued a joint consultation
paper with the Australian Government Treasury Department
entitled "Cross border recognition: Facilitating access to
overseas markets and financial services", a copy of which
is available on ASIC's website at www.asic.gov.au. ASIC
and The Treasury have invited interested parties to make
comments on the proposals contained in the joint consultation
paper by 25 July 2008.
The content of this article is intended to provide a
general guide to the subject matter. Specialist advice should
be sought about your specific circumstances.
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In the years following the global financial crisis of 2008 many Australian investors lost their life savings as financial products failed and the Australian Stock Exchange shed over 3,000 points.
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