In the previous issue of Corporate Reporter we noted that the Financial Markets Authority had made decisions on a majority of the class exemption notices which were under review (click here for further details). These included the Financial Reporting Act (Australian Issuers) Exemption Notice 2013, the Financial Reporting Act (Overseas Issuers) Exemption Notice 2013, and the Financial Reporting Act (Dual-listed Issuers) Exemption Notice 2013 (the FRA class notices). Each of these notices exempt specified overseas incorporated issuers from the requirements of the Financial Reporting Act 1993 to prepare, have audited, and register financial statements, subject to conditions that require those issuers to prepare financial statements in accordance with the laws of their home jurisdiction, have those financial statements audited by a person qualified to act as an auditor in their home jurisdiction, and register those audited financial statements in New Zealand.

However, in addition to the audit requirements of the Financial Reporting Act 1993, section 53E of the Securities Act 1978 imposes a further requirement for an annual audit. This means that the exempt issuers under the FRA class notices would be required to have an audit by a New Zealand licensed auditor each year even though they had been exempted from the requirement to do so in the Financial Reporting Act. The Securities Act (Overseas Issuers – Audit Requirement) Exemption Notice 2013 therefore exempts issuers that rely on Part 1 of the Financial Reporting Act (Australian Issuers) Exemption Notice 2013 and the other FRA class notices from section 53E of the Securities Act. The notice instead requires the issuers to have an audit at least once in each year by an auditor who is qualified under the laws of the issuer's home jurisdiction.