Of relevance to those involved in property developments, the Securities Act (Real Property Developments) Exemption Notice 2007 (the Property Exemption) has been extended until 30 September 2013 while the more substantive changes are considered.

In justifying this extension, the Financial Markets Authority (FMA) affirmed that securities offered as ancillary features to real estate transactions which are not conventional investments should not be subject to the ordinary disclosure requirements of the Securities Act 1978 (the Act) and the Securities Regulations 2009 – most notably, the requirements to provide a prospectus and appoint a statutory supervisor.

Over the next six months, the FMA will consider substantive changes to the Property Exemption. Currently, the Property Exemption excludes the need to comply with particular sections in Part 2 of the Act, provided that a series of conditions are met. In a recent report, the FMA announced that it may broaden the Property Exemption to provide a complete exemption from Part 2 of the Act and that it may simplify the conditions imposed. These proposed changes would make compliance more straight forward and will no doubt be welcomed by those relying on the Property Exemption.

The FMA will be consulting on these proposed reforms and are aiming to release a consultation paper soon. The amended Property Exemption is available on the FMA's website.