Changes to exemption on short form prospectuses

The Securities Commission has made changes to its class exemption for short form prospectuses to assist companies which seek to raise capital from existing security holders.

The new notice, the Securities Act (Short Form Prospectus) Exemption Notice 2009, retains the existing exemptions in the 2002 notice subject to the same conditions.

In addition, issuers can now use the short form prospectus exemption where they have relied on provisions introduced into the Companies Act 1993 in June 2007 under which companies could make their annual report available to shareholders by advising them of their right to receive an annual report rather than sending the report.

Further it allows condensed interim financial statements which comply with NZ IAS 34 to accompany the short form prospectus, rather than full form interim financial statements which comply with the all of the requirements of New Zealand generally accepted accounting practice.

These amendments will reduce compliance costs for companies seeking to raise capital by means of a short form prospectus in accordance with regulation 4 of the Securities Regulations while still ensuring that investors receive the information they need to make informed investment decisions.

The exemption notice will be available on the New Zealand legislation website: www.legislation.govt.nz