One of the highlights of the new Financial Markets Conduct Act 2013 (FMCA) is its clear exclusions regime.

If your offer of a financial product falls into an exclusion category, it will be excluded from the disclosure and governance regimes, either in full or with tailored limited disclosure and governance requirements under regulations to be developed. An exposure draft of the regulations is expected this month, October 2013. The various exclusion categories are set out in Table 1 below.

Offers to issue new financial products (primary offers) are automatically included in the FMCA primary disclosure and governance regimes unless an exclusion applies. Offers of financial products for sale (secondary offers) are not automatically included. Instead secondary offers require disclosure (and governance) only if the inclusion regime set out in Table 2 applies, and the offer does not fall into an exclusion category. The regime is similar to that of the Securities Act 1978, but with some important differences, detailed below.

Regardless, the fair dealing and unsolicited meeting provisions in Part 2 of the FMCA still apply to excluded offers.

Table 1: Exclusions

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Table 2: Inclusions for Secondary Offers

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When does it happen?

The licensed intermediary exclusion is expected to be available for crowd funding and person-to-person lending from 1 April 2014, as is the employee share scheme exclusion. The other exclusions (and inclusions) will come into force with the main disclosure and governance parts of the FMCA, expected on 1 December 2014. Issuers will have the benefit of transitional provisions of one to two years, depending on their circumstances, but may want to consider transitioning to the FMCA regime earlier.