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
Information to be registered on Disclose includes:
- Key Offer
- Information about
the Company making the offer.
- 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.