A discussion document proposing changes aiming to reduce compliance costs, improve flexibility for issuers and disclosure to investors has been released, Commerce Minister Simon Power said today.

The document has been released in response to recommendations of the Capital Market Development Taskforce and proposes changes to the Securities Regulations 1983. 

The taskforce’s interim report has already resulted in the development of the Securities Disclosure and Financial Advisers Amendment Bill currently before select committee, and changes to the NZX listing rules.

"The proposed amendments will be a welcome step forward for companies seeking to raise capital," Mr Power said.

"Many of the changes will significantly reduce compliance costs for issuers. Others will increase flexibility for issuers and improve disclosure to investors.

"The regulations have been in force for more than 25 years and the review provides a good opportunity to update many aspects of the regulations that have not kept pace with developments over that time."

Among other things, the proposed amendments will:

Align the financial information in prospectuses with the requirements of applicable financial reporting standards and generally accepted accounting practice more broadly.

Expand the definition of borrowing group for the purposes of disclosure by debt issuers so it includes guaranteeing parent and sister companies, as well as guaranteeing subsidiaries.

• Provide more flexibility in respect of matters that may be included in advertisements.

• Align the requirements around the disclosure of directors', promoters', and managers' interests across the different types of issuer.

"I encourage interested parties to provide submissions on the proposals in the discussion document, and look forward to hearing their views," Mr Power said.

Submissions close on 8 May 2009.  The discussion document is at http://www.med.govt.nz/templates/StandardSummary____15398.aspx

Background

The Securities Regulations 1983

The Securities Regulations 1983 sets out the required content of prospectuses for equity, debt, participatory securities, unit trusts, life insurance policies, and superannuation schemes. It also sets out the required contents of investment statements and provides rules on the material that may be included in advertisements, in addition to setting out the mandatory contents of trust deeds and deeds of participation governing the supervision of issuers of debt and participatory securities by trustees.

Capital Market Development Taskforce

The Capital Market Development Taskforce is an industry-led group established in July 2008 to produce a plan to develop New Zealand's capital market. The taskforce comprises both private and public sector participants including officials from Treasury, Reserve Bank, Inland Revenue Department, and Ministry of Economic Development.