The new Companies Office prospectus registration procedures, which were to come into effect on Monday, could impact on offer launch dates and are possibly inconsistent with the Securities Act 1978.
The new processes were advised recently without consultation. We are pursuing our concerns with the Registrar of Companies and changes may result. We will update you on developments.
The proposed new prospectus registration process
Registration will no longer be back-dated to the date of submission. Electronic documents will be registered on the same day only if uploaded before midday. Otherwise, they will be registered on the following working day.
Hard copy documents posted or hand delivered to the Auckland Companies Office will be registered within three working days.
For new issues, the date of registration of the prospectus is the start of the five or ten day stand-down period before offers may start. For continuous offers, allotment may start after registration of the prospectus. These new delays could extend offer launch dates.
Documents will no longer be received by reception staff in the Wellington office of the Ministry of Business, Innovation and Employment (MBIE).
Currently the Registrar will register a prospectus as at the date on which it is received (provided it is received before 5pm on a working day), unless there is reason to refuse the registration.
The reasons for refusal are limited and require simply checking that the prospectus is in the proper form, legible, signed and dated.
The Securities Act states that the Registrar must register a prospectus promptly upon delivery unless one of the limited grounds for refusal of registration exists. We consider that the five hour (electronic filings) and three working day (physical filings) timeframes for registration are inconsistent with this obligation.
The checks to be performed on these documents should take ten minutes at most, but we appreciate some leeway is needed to allow for numerous filings at the same time.
The checks to be performed on documents physically received by the Registrar are no more difficult than those performed on documents received electronically. The only points of difference are internal delivery and scanning.
We also note that for very large filings (documents over 50MB), and for certain types of filings (including Mutual Recognition Securities Offerings which have only five days to register certain documents), electronic registration is not an option. Physical filing is the only option for these issuers and sometimes urgent amendments need to be filed where the issuer is not able to wait for three days before registration of their document.