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FMCA TRANSITION PERIOD ENDS

As of yesterday, 1 December 2016, the 2 year transition period under the Financial Markets Conduct Act 2013 ("FMCA") officially came to an end. Now, all offers of financial products (such as shares) must be made under the FMCA and the Securities Act 1978 is put to bed.

Gone are the days of lengthy Prospectus and Investment Statement documents. From now on, companies looking to raise capital (other than through an excluded offer) must prepare a Product Disclose Statement ("PDS"), outlining in plain English (and within prescribed word limits) key information regarding the offer, together with a summary of risks, returns, fees and charges.

In addition to preparing a PDS, companies must register key documents relevant to the offer on a public register called "Disclose" (www.disclose.govt.nz). Information to be registered on Disclose includes:

-        Key Offer Details

-        Financial Statements

-        Information about the Company making the offer.

-        Constitutional Documents

-        Copy of the PDS

FMA Chief Executive Rob Everett says:

"The licensing framework laid out in the FMCA sets us up for the next phase of transformation in financial services - embedding high standards of conduct in financial service providers that place investors' interests at the heart of their business models."

It is important for any company looking to raise capital to understand their obligations under the FMCA.

For more information, the Financial Markets Authority offers a useful overview on their website: www.fma.govt.nz, or feel free to contact our team

Written by Kylie van Heerden at 00:00

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