The Securities Regulations 2009 come into effect on 1 October 2009. In addition to introducing regulation for simplified disclosure prospectuses (allowing a simpler disclosure document for listed issuers), there are a number of other important changes that will affect all issuers.

From 1 October the 2009 regulations will replace the 1983 regulations (although issuers can elect to comply with the old regulations, on a transition basis, until 30 June 2010).

Issuers updating offer documents under the new regulations, should thoroughly check any investment statement and prospectus against the amended schedules in the 2009 regulations as there are a number of detailed changes to the content.

Some changes made in the schedules are to require consistent disclosures for different types of securities; and some are to further prescribe financial information required.

In the meantime, some points of interest:

  • Regulation 17 Certificates are no more. They will become Regulation 30 Certificates, a template for which is on page three of this Update.

    Of note, directors must now certify consistency of an advertisement with the investment statement (or prospectus or disclosure document as applicable) with directors able to authorise an agent to sign these certificates for them.
  • Restrictions on referring in advertisements to the amount of assets of issuers are extended to life insurance companies, participatory securities, superannuation schemes and unit trusts. This will require advertising that refers to total assets to state total liabilities with equal prominence. However, such information can now be taken from interim financial statements (and not only audited accounts). The interim statements must be contained in the prospectus or attached to an extension certificate which has been registered.
  • Current restrictions on referring to a security as being 'secured' are extended to all securities. Issuers using the word 'secured' in advertising must also refer to the nature and point in ranking of any security.
  • Current provisions requiring statements about rates of interest to include references to minimum subscriptions or minimum investment periods have been extended to any reference to amounts of return (and not simply to interest).
  • Advertisements and registered prospectuses will not be able to state or imply that securities are safe or free from risk, or that either the Securities Commission or Registrar of Companies has approved them or the offer of securities.

We are happy to discuss with you the implications of these changes to you and your business.

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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 particular circumstances.