Australia - New Zealand Mutual Recognition of Securities Regime Comes into Force
By David P. Selig, Partner
30 June 2008
On 10 October 2007, Addisons reported on proposed amendments to the Corporations Act 2001 (Cth) (“Corporations Act”) dealing with mutual recognition of securities offerings between Australia and New Zealand. Those amendments recently came into force enabling Australian and New Zealand issuers to take advantage of reduced regulatory requirements when issuing securities across the Tasman.
The new requirements for Australian entities that intend to issue securities in New Zealand are found in Part 5 of the Securities Act 1978 (NZ) and the Securities (Mutual Recognition of Securities Offerings – Australia) Regulations 2008 (NZ). The new requirements for New Zealand entities that intend to issue securities in Australia are found in Chapter 8 of the Corporations Act and the Corporations Regulations 2001 (Cth), as amended by the Corporations Amendment Regulations 2008 (No.2).
Essentially, the mutual recognition scheme allows Australian and New Zealand issuers to use the same disclosure document to offer securities in both countries provided that that disclosure document complies with the laws of the issuer’s home jurisdiction.
In relation to Australian issuers, the mutual recognition scheme can apply to offers of equity or debt securities, interests in collective investment schemes and any interest in, or option to acquire, these securities under Regulation 4 of the New Zealand Regulations. In relation to New Zealand issuers, the mutual recognition scheme can apply to offers of shares, debentures and interests in managed investment schemes and certain rights, interests and options in these financial products under section 1200A of the Corporations Act.
The Australian Securities & Investments Commission (“ASIC”) has issued Regulatory Guide 190 entitled “Offering securities in New Zealand and Australia under mutual recognition” explaining the new regime. According to the Regulatory Guide, ASIC, the New Zealand Securities Commission and the New Zealand Companies Office have established arrangements to administer the mutual recognition laws and procedures.
In an effort to further simplify and encourage cross border transactions, on 16 June 2008 ASIC issued a joint consultation paper with the Australian Government Treasury Department entitled “Cross border recognition: Facilitating access to overseas markets and financial services”, a copy of which is available on ASIC’s website at www.asic.gov.au. ASIC and The Treasury have invited interested parties to make comments on the proposals contained in the joint consultation paper by 25 July 2008.
The assistance of Nathan Greenfield, Solicitor in writing this article is appreciated.