An omnibus bill proposing amendments to 13 Acts (including the Companies Act 1993 and the Unit Trusts Act 1960), aimed at reducing the compliance burden for businesses has passed its first reading and has been sent to the Commerce Select Committee.
Companies Act and Unit Trust Act amendments include further provisions for electronic communications
Companies Act amendments
Under the proposed amendments to the Companies Act companies will be able to invite shareholders to "opt-in" to receive company documents electronically and to implement electronic voting. These measures will bring New Zealand's company practices in line with Australia and will provide additional flexibility for listed companies.
Electronic voting is widely used in overseas jurisdictions. However, in New Zealand there has been doubt that the current law allows electronic postal voting and electronic appointment of proxies. This lack of clarity has seen New Zealand companies continue to use postal proxy forms for shareholder votes.
The Bill clarifies the position by allowing for shareholder participation in meetings by way of audio, audio and visual, or electronic means. Participation by such means includes direct electronic voting during a meeting held via a webcast, whereby shareholders can vote by indicating a preference on a website. The amendments will also allow companies to accept proxies electronically from shareholders.
Unit Trust Act amendments
Section 11 of the Unit Trusts Act currently requires accounts or financial statements to be sent to unit holders annually, and does not provide for them to be distributed electronically. Under the Bill, the Act is to be amended to provide the flexibility for managers of unit trusts to distribute these documents electronically.
Under the new provisions, the manager has the option of either sending printed copies of the accounts or financial statements to unit holders or sending a notice explaining to unit holders that they may choose to receive the audited statement of accounts or the financial statements as a printed copy or by electronic means in a similar manner to the section 209 notice introduced under the Companies Act in respect of annual reports.
The select committee has now called for submissions on the Regulatory Reform Bill. Submissions close on 1 April 2011 and the committee is required to report back to the House on 15 August 2011.
For further details on the Bill see our earlier client update: Electronic shareholder communications and electronic voting included in new bill