The Regulatory Systems (Commercial Matters) Amendment Bill has now passed and will generally come into force two months after it receives the Royal Assent (near end of May).
It includes provisions which will reduce compliance costs for companies and for entities subject to the Financial Markets Conduct Act 2013 (FMCA).
- Removing the requirement for listed issuers to send notices of financial assistance to all of their shareholders. Instead they will be able to provide the notice to NZX for release.
- Allowing the board not to convene an AGM where there is no business requiring an AGM and it is not in the company's interests to hold one.
- Removing the requirement for "large" companies to prepare or have audited financial statements where the company is covered by group financial statements prepared by the parent. The need to prepare an annual report for such companies will also be removed where this is supported by 95% of shareholders.
- Making minor changes to the "section 209" relief (refer to our earlier commentary for more detail). This change will be brought into effect by regulation and is expected to be available for annual reports prepared by listed issuers with a 30 June or later balance date. In the meantime, the Bill removes the need to refer to a concise annual report if there isn't one.
- Allowing companies to accept proxies and postal votes closer to meetings than the current 48 hour cut off if the company constitution permits this.
- Extending the time for disclosure by directors or senior managers who acquire a relevant interest in financial products as a result of being the trustee of a testamentary trust or the executor or administrator of the estate of a deceased person.
- Allowing the Financial Markets Authority to grant exemptions in relation to indemnities for overseas issuers.
- Extending the same class offer regime to the offer of options to acquire quoted financial products.
A new power for the Takeovers Panel to expeditiously determine reimbursement of cost disputes in relation to takeover offers (whether successful or unsuccessful) will commence on Royal Assent, although the power will not apply to takeovers made prior to commencement of the law change. This change is timely, given recent disputes over the failed takeovers for Kathmandu and Abano will probably need the High Court to resolve.
Chapman Tripp comments
There are a few further regulatory issues under the FMCA in particular which could usefully be addressed in future bills of this nature, including around employee share schemes, the status of treasury stock under the FMCA and the treatment of the issue of financial products for the purposes of insider trading.
The information in this article is for informative purposes only and should not be relied on as legal advice. Please contact Chapman Tripp for advice tailored to your situation.