Effective Disclosure Guidance Note released
The FMA has released the final version of its new regulatory guide on improving disclosure in prospectuses and investment statements.
This follows on from extensive industry consultations after the release of the FMA's proposed guidance note in January, and revised proposed guidance in April this year. The new regulatory guide is Guidance Note: Effective Disclosure.
The guidance note is intended to provide issuers and their directors and advisers with guidance on the FMA's role and approach to the review of disclosure documents, and to outline issues that the FMA considers are important for producing high quality disclosure documents. It includes the FMA's views on good practice for ensuring that such documents are "readily understandable" to their intended audience.
For more information, click here.
Tiered Levy System introduced
The Commerce Minister has announced new levies for the FMA and External Reporting Board (XRB), together with a new fee structure for the Companies Office.
The FMA levy will be tiered, and different market participants will pay according to their size, and the benefits they receive from a well-functioning financial market.
The levies, which will be collected mainly through the Financial Service Providers Register, are expected to provide $16.4 million in funding for the FMA and $3.66 million for the XRB annually.
"The new levy and fee structures will help fund a well-regulated market that all investors can trust. It's important that our regulators are properly resourced," says Commerce Minister Craig Foss.
All companies will be subject to a re-introduced Companies Office annual return fee, and $10 FMA and $10 XRB levies.
Personal Property Securities Register fees will be increased, and the Companies Office company registration fee has been slightly reduced.
The new fees and levies will apply from 1 August 2012.
Click here for further information.
Pre-registration prospectus vetting service ends
Since the introduction of the new prospectus registration regime in May 2011 (under the Securities Amendment Act 2011), the FMA continued to carry out a limited pre-registration review process to support issuers in the transition to the new regime. This service ended on 30 March 2012.
The FMA will continue to review prospectuses post-registration under its new risk-based framework. This includes any reviews performed under the consideration timeframe of five working days introduced by the Securities Amendment Act 2011.
Although the pre-registration vetting service has ended, the FMA has indicated that it is still keen to engage with issuers before they register offer documents on novel products, strategic issues, complex or big issues or significant issues of securities (for example major IPOs). In such cases, issuers are encouraged to contact the FMA as early as possible, but are asked to be selective about the issues that they raise (because the FMA does not have the resources to engage on every offer or concern).
Under the new risk-based framework for reviewing prospectuses post-registration, FMA aims to review 100 percent of high-risk prospectuses and 5 percent of other prospectuses post-registration.
For details of the new prospectus registration regime, click here.
Class exemption notices up for review
The FMA is reviewing 44 class exemption notices which expire this year. Two provide exemptions from provisions of the Financial Reporting Act 1993 for overseas issuers and the remainder provide exemptions from provisions of the Securities Act 1978.
A summary of each of the expiring notices is available here.
Although law reform envisaged by the Financial Markets Conduct Bill may attend to some of the issues currently addressed by these exemptions, the FMA is of the view that most of these class exemptions are likely to be required for a number of years given the timeframe anticipated for passage of the Bill and providing for a transitional period. Accordingly, the FMA has sought submissions on all of the exemption notices, and expects to complete the review of each exemption before it expires.
For a more detailed summary, click here.
For further details of this review, visit the FMA's website here.
Guidance for Authorised Financial Advisers
The FMA has published guidelines for Authorised Financial Advisers (AFAs), clarifying its expectations in connection with Code Standard 6(d) of the Code of Professional Conduct for AFAs, particularly in relation to public issues.
The guidance note aims to assist AFAs as financial markets participants in determining their responsibilities, and ensuring that their clients have sufficient information. It describes the factors and considerations AFAs should take into account in order to comply with Code Standard 6(d).
Click here to read the guidance note.