On 3 May, NZX Market Supervision (NZXMS) issued a revised Continuous Disclosure Guidance Note which sets out NZXMS's expectations in relation to compliance with the NZX continuous disclosure listing rules and provides guidance to issuers to assist with decision making about continuous disclosure. The Guidance Note replaces NZX's March 2005 Guidance Note on Continuous Disclosure.

Although the content of the guidance note is substantially the same as the 2005 version, there are a number of additions and modifications of note. These include:

  • New commentary on the differences between disclosure thresholds for NZDX issuers and issuers of equity securities and specific examples of information that may require disclosure by NZDX issuers;
  • Further elaboration on when significant transactions and disposals or acquisitions of assets and securities may constitute "material information" that require disclosure;
  • Adding "failure to comply with covenants in financing arrangements" (including the consequences of non-compliance) as part of the long list of examples of matters that may need to be disclosed;
  • Noting that if an issuer becomes aware of "material information" about a future event (for example, such as knowing that the breach of a financing covenant is inevitable) it must disclose this as soon as it becomes aware of that information, even if that is ahead of the event to which the information relates; and
  • Advising that a trading halt may be necessary to provide the issuer with time to formulate an announcement regarding information concerning the issuer which has originated from a third party.

The revised guidance note also reminds issuers that failure to comply with their continuous disclosure obligations may mean that the issuer will not be able to take advantage of the new simplified prospectus disclosure prospectus regime. Under section 44AE of the Securities Act 1978 the FMA, if it is satisfied that a person who is subject to a disclosure obligation has failed to comply with it anytime in the last 12 months may, if it considers it desirable in the public interest, make an order prohibiting that person from using a simplified disclosure prospectus for a period not exceeding 24 months.