In September, FMA released a further project update on its review of Securities Act and Financial Reporting Act class exemption notices.

In summary, of the 44 class exemption notices under review:

  • 20 have been renewed for 5 years on substantially the same terms as the existing notices;

  • 15 have been renewed for a short period to 31 March 2013 to allow time for further consultation and to allow time for drafting in relation to proposed amendments;

  • the expiry of the Securities Act (Charitable and Religious Purposes) Exemption Notice 2003 has been extended (with some minor amendments) for a limited period of 12 months to allow a joint review with the Reserve Bank of New Zealand of the application of securities law and prudential requirements for charitable and religious organisations that also rely on the Deposit Takers (Charitable and Religious Organisations) Exemption Notice 2010;

  • the Contributory Mortgage Regulations (Solicitors) Exemption Notice has been renewed for 9 months (with some minor amendments) to allow FMA to undertake a full review of offers of securities and financial advice given by solicitors;

  • the Securities Act (Real Property Proportionate Ownership Schemes) Exemption Notice 2002 has not been renewed. However, transitional provisions have been put in place to allow offerors that have already offered securities in a particular scheme to the public in reliance on the 2002 notice to proceed with that scheme on the basis of compliance with the requirements of that notice for a specified time period (up to 30 November 2012). FMA is also proposing a new limited exemption to address two specific issues applying to proportionate ownership schemes investing in property developments. Further details on this are available here;

  • the Securities Act (Amalgamations) Exemption Notice 2002 and five other notices have been found to be redundant and have not been renewed.

The Financial Reporting Act (Extension of Term) Exemption Notice 2012 extends the expiry of the Financial Reporting Act (Overseas Companies) Exemption Notice 2007 and the Financial Reporting Act (Overseas Issuers) Exemption Notice 2009 until 31 March 2013.

The Securities Act (Extension of Term, Amendment, and Transitional Provision) Exemption Notice 2012 extends the terms of 24 of the Securities Act class exemption notices, makes minor amendments to some of those notices, and provides a transitional provision in respect of the Securities Act (Real Property Proportionate Ownership Schemes) Exemption Notice 2002.

Amendments to the other Securities Act class exemption notices have been dealt with separately as follows:

  • the Securities Act (Registered Banks Futures Contracts) Exemption Amendment Notice 2012 extends the expiry of the 2007 notice for a further 5 years (to 31 May 2017);

  • the Securities Act (Advertisements Containing Financial Advice) Exemption Notice 2012 replaces the 2002 notice with little change in substance for a further 5 year period. But, amendments have been made to:

    • take into account the Financial Advisers Act 2008 and the Securities Regulations 2009; and

    • remove the condition relation to prospective financial information;

  • the Securities Act (Audiovisual Advertisements) Exemption Notice 2012 replaces the 2002 notice with little change in substance for a further 5 year period. However, changes have been made to:

    • extend the notice to cover audio or video media accessed from the Internet (for example, webcasts and podcasts); and

    • take into account the Securities Regulations 2009;

  • the Securities Act (Banks) Exemption Notice 2012 and the Securities Act (Commercial Bill Dealers) Exemption Notice 2012 replace their respective 2002 notices with little change in substance, both for a further 5 year period. However, changes have been made to both notices to:

    • reduce the period during which a bank may not allot a debt security to 2 days (rather than the current 3 working days) if the investment statement is sent to an electronic address specified by the subscriber for this purpose;

    • take into account the Securities Regulations 2009 and remove a redundant exemption;

  • the Securities Act (Brokers) Exemption Notice 2012 replaces the Securities Act (Sharebrokers) Exemption Notice 1984 with little change in substance for a further 5 year period. However, changes have been made to:

    • refer to a broker (as defined in the Financial Advisers Act 2008) rather than a sharebroker; and

    • take into account the Securities Regulations 2009;

  • the Securities Act (Continuous Debt Issues) Exemption Notice 2012 replaces the 2002 notice with little change in substance for a further 5 year period. However, changes have been made to:

    • reduce the period during which a bank may not allot a debt security to 2 days (rather than the current 3 working days) if the investment statement is sent to an electronic address specified by the subscriber for this purpose;

    • modify the conditions relating to the exemption from section 54 of the Act to allow issuers to send a notice making confirmation information available by electronic means;

    • take into account the Securities Regulations 2009;

  • the Securities Act (Equity Warrant Issuers) Exemption Notice 2012 continues exemptions for a further period of 5 years from provisions of the Act previously provided in the 2002 notice, and provides for existing exemptions from provisions of the Securities Regulations 1983 to be provided in respect of equivalent provisions of the Securities Regulations 2009 (with the effect that equity warrant issuers to which the exemptions apply will be able to continue to rely on those exemptions in respect of offers of securities under the 2009 regulations). However:

    • the trustee requirement in the notice has been updated to reflect the coming into force of the Securities Trustees and Statutory Supervisors Act 2011:

    • transitional provisions have been included to reduce the short-term compliance costs resulting from the regulatory changes for issuers that have previously relied on the 2002 notice and the Securities Act (Transition to Securities Regulations 2009) Exemption Notice 2009;

  • the Securities Act (Estates and Interests in Australian Land) Exemption Amendment Notice 2012 has amended the 2002 notice by:

    • extending its expiry for a further 5 years to 30 September 2017;

    • updating the notice to refer to the Securities Regulations 2009;

    • extending the exemptions to include the whole of Part 2 of the Securities Act and the Securities Regulations 2009 in their entirety; and

  • the Securities Act (Unit Trust Certificates) Exemption Notice 2012 replaces the 2002 notice with little change in substance for a further 5 year period. However, changes have been made to allow issuers to send a notice that makes information about the units of a unit holder available by electronic means.

All new exemptions are available on FMA's website here.

For further information on the review of, and changes to, individual exemption notices click here.