Following a review of all directors' and officers' (D&O) relevant interest disclosures and substantial security holder (SSH) disclosures made on the NZX Limited Market Announcement Platform (MAP) over a five week period, FMA has issued a report to:
- highlight areas of concern FMA has with these disclosures;
- remind directors, officers and substantial security holders of their statutory disclosure obligations under the Securities Markets Act 1988; and
- clarify FMA's expectations of market participants to whom these requirements apply.
FMA's review found that the quality of D&O and SSH disclosures was generally good, but there were some issues with timeliness and accuracy. FMA recommends that for D&O disclosures public issuers have policies and procedures in place to identify the occurrence of events requiring disclosure, and to assist the director or officer to make the necessary disclosures. FMA also emphasises in the report that the director or officer responsible for filing should satisfy themselves as to the accuracy of the disclosures rather than relying on the public issuer, or others, to do it on their behalf.
In the case of SSH disclosures, FMA note that:
- The requirement under the Securities Markets Act to file an SSH disclosure notice 'as soon as the person knows or ought to know' of a relevant event, means 'immediately'.
- The requirement to provide SSH disclosure to the market arises when the transaction is agreed, not when the transaction is settled, even if the transaction implies future or conditional control of the securities in question.
- Where future or conditional provisions apply to a transaction, disclosure is required both at the time the transaction is agreed, when the fact of the substantial holding, or change or cessation of substantial holding, is first known; and again at the time the transaction is effected, when the nature of the relevant interest changes. The nature of the relevant interest in each case should be detailed on the disclosure form, as required by the SSH Regulations.
The full report is available here.