Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698753183086.pdf (New Zealand)
Reprint as at 28 September 2012 Securities Act (Financial Institutions) Exemption Notice 2011 (SR 2011/62) Pursuant to the Securities Act 1978, the Securities Commission gives the following notice (to which is appended a statement of reasons of the Securities Commission).
Contents Title Commencement Expiry Interpretation Application of this notice Exemption from section 37A(1)(c) of Act Condition of exemption in clause 6 Exemption from section 37A(1A)(d) of Act Conditions of exemption in clause 8 Exemptions from various clauses of Schedule 2 of Regulations Conditions of exemptions in clause 10 Securities Act (Financial Institutions) Exemption Notice 2007 revoked Page 2 2 2 2 3 4 4 4 5 5 5 7 Note Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this reprint.
A general outline of these changes is set out in the notes at the end of this reprint, together with other explanatory material about this reprint.

This notice is administered by the Financial Markets Authority.

1 cl 1 Securities Act (Financial Institutions) Exemption Notice 2011 Reprinted as at 28 September 2012 13 Transitional provisions 7 Notice Title This notice is the Securities Act (Financial Institutions) Ex- emption Notice 2011.
Commencement This notice comes into force on the day after the date of its notification in the Gazette.

Expiry This notice expires on the close of 31 March 2013.

Clause 3: amended, on 28 September 2012, by clause 3 of the Securities Act (Extension of Term, Amendment, and Transitional Provision) Exemption No- tice 2012 (SR 2012/294).
Interpretation In this notice, unless the context otherwise requires,— Act means the Securities Act 1978 financial institution has the same meaning as in Appendix E of NZ IFRS 7 financial institution group, in relation to an offer of debt se- curities by a financial institution, means— the financial institution; and (a) all former subsidiaries of the financial institution, in re- (b) spect of the periods during which they were those sub- sidiaries; and all present subsidiaries of the financial institution, in respect of the periods since they became those sub- sidiaries (c) non-guaranteeing subsidiary means, in relation to an offer of debt securities by a financial institution,— (a) a subsidiary of a financial institution that is not a guar- anteeing subsidiary, in respect of the periods since it be- came that subsidiary; and 1 2 3 4 (1) 2 Reprinted as at 28 September 2012 Securities Act (Financial Institutions) Exemption Notice 2011 cl 5 (b) a former subsidiary of a financial institution that was not a guaranteeing subsidiary, in respect of the periods during which it was that subsidiary NZ IFRS 7 means the financial reporting standard known as the New Zealand Equivalent to International Financial Report- ing Standard 7 (Financial Instruments: Disclosures) that has been approved under the Financial Reporting Act 1993 Regulations means the Securities Regulations 2009.
(2) Any term or expression that is defined in the Act or the Regu- lations and used, but not defined, in this notice has the same meaning as in the Act or the Regulations.
5 (1) Application of this notice This notice applies to a financial institution if— (a) (b) (c) (d) institution has non-guaranteeing sub- the financial sidiaries; and the aggregate profit or loss after taxation of the non- guaranteeing subsidiaries for the most recently com- pleted accounting period (as incorporated in the con- solidated financial statements of the financial institution group), and since, does not exceed 5% of the consoli- dated profit or loss after taxation, before the deduction of all non-controlling interests, of the financial institu- tion group; and the aggregate carrying amount of the assets of the non- guaranteeing subsidiaries on the balance date of the most recently completed accounting period (as incorp- orated in the consolidated financial statements of the fi- nancial institution group), and since, does not exceed 5% of the consolidated amount of the assets of the fi- nancial institution group; and the aggregate amount of investment by members of the financial institution group in the non-guaranteeing sub- sidiaries on the balance date of the most recently com- pleted accounting period, and since, does not exceed 5% of the consolidated equity of the financial institu- tion group.
(2) In subclause (1)(d), amount of investment includes the carry- ing amount of equity held in the non-guaranteeing subsidiaries 3 cl 6 Securities Act (Financial Institutions) Exemption Notice 2011 Reprinted as at 28 September 2012 and the amount of all loans and advances made to the non- guaranteeing subsidiaries.
Exemption from section 37A(1)(c) of Act Every financial institution to which this notice applies and every person acting on its behalf are exempted from section 37A(1)(c) of the Act in respect of debt securities of that finan- cial institution.
Condition of exemption in clause 6 The exemption in clause 6 is subject to the condition that no allotment of a debt security offered to the public by the finan- cial institution is made if the date of allotment would be more than,— (a) (ii) in the case of a registered prospectus relating to the se- curity that contains or refers to financial statements or interim financial statements under clause 11(1)(c) or (d) and for which no certificate has been registered under section 37A(1A) of the Act, 9 months after the later of— the date of the statement of financial position (i) contained or referred to in the registered prospec- tus; and the last day of the interim accounting period to which the interim financial statements relate; or in the case of a registered prospectus relating to the security that contains or refers to financial statements under clause 11(1)(c) (but not interim financial state- ments) and for which a certificate has been registered under section 37A(1A) of the Act, 9 months after the date of that certificate; or in any other case, 6 months after the date of the regis- tered prospectus.
(b) (c) Exemption from section 37A(1A)(d) of Act Every financial institution to which this notice applies and every person acting on its behalf are exempted from section 37A(1A)(d) of the Act in respect of debt securities of that fi- nancial institution.
6 7 8 4 Reprinted as at 28 September 2012 Securities Act (Financial Institutions) Exemption Notice 2011 cl 11 9 10 11 (1) Conditions of exemption in clause 8 The exemption in clause 8 is subject to the conditions that— a certificate delivered to the Registrar for registration (a) under section 37A(1A) of the Act is accompanied by interim financial statements of the financial institution group for the 6-month period from the date of the state- ment of financial position contained or referred to in the registered prospectus; and those interim financial statements are prepared in ac- cordance with NZ IAS 34 (but need not be audited).
(b) Exemptions from various clauses of Schedule 2 of Regulations Every financial institution to which this notice applies and every person acting on its behalf are exempted from clauses 8, 9, 16 to 20, and 22 of Schedule 2 of the Regulations in re- spect of debt securities of that financial institution.
Conditions of exemptions in clause 10 The exemptions in clause 10 are subject to the condition that the registered prospectus relating to the debt securities con- tains all of the information, statements, and other matters spe- cified in the following that are applicable: (a) (ii) clause 8 of Schedule 2 of the Regulations but applied as if the reference to— (i) the group were a reference to the financial insti- tution group; and the statement of financial position contained or referred to in the prospectus under clause 17 were a reference to the statement of financial position contained or referred to in the prospectus under paragraph (c) of this subclause; and any interim financial statements set out in the prospectus under clause 18 were a reference to any interim financial statements set out in the prospectus under paragraph (d) of this subclause: clause 9 of Schedule 2 of the Regulations but applied as if the reference to a statement of financial position contained or referred to in the prospectus under clause (iii) (b) 5 cl 11 Securities Act (Financial Institutions) Exemption Notice 2011 Reprinted as at 28 September 2012 (c) (d) (e) (f) (g) 17 were a reference to a statement of financial position contained or referred to in the prospectus under para- graph (c) of this subclause: clause 17 of Schedule 2 of the Regulations but applied as if the references to the group were references to the financial institution group: clause 18 of Schedule 2 of the Regulations but applied as if the references to— (i) the group were references to the financial institu- tion group; and the financial statements contained or referred to in the prospectus under clause 17 were references to the financial statements contained or referred to in the prospectus under paragraph (c) of this subclause: (ii) clause 19 of Schedule 2 of the Regulations but applied as if the references to the financial statements for the group referred to in clause 17(1) were references to the financial statements for the financial institution group that are
 referred to in the prospectus under paragraph (c) of this subclause: clause 20 of Schedule 2 of the Regulations but applied as if the reference to the financial statements referred to in the prospectus under clause 17(1) were references to the financial statements referred to in the prospectus under paragraph (c) of this subclause: clause 22 of Schedule 2 of the Regulations but applied as if the references to— (i) any of the issuer’s guaranteeing subsidiaries (in clause 22(1)(c)) were a reference to any of the issuer’s subsidiaries; and the group were references to the financial institu- tion group; and the financial statements contained or referred to in the prospectus under clause 17 were references to the financial statements contained or referred to in the prospectus under paragraph (c) of this subclause; and (ii) (iii) 6 Reprinted as at 28 September 2012 Securities Act (Financial Institutions) Exemption Notice 2011 cl 13 (iv) the amounts stated under clauses 8 and 9(2) and (3) were references to the amounts stated under paragraphs (a) and (b) of this subclause.
(2) An interim statement of financial position is required under subclause (1)(d) only if the directors of the financial institution consider it necessary or desirable (after having regard to clause 7).

12 13 (1) (2) Securities Act (Financial Institutions) Exemption Notice 2007 revoked The Securities Act (Financial Institutions) Exemption Notice 2007 (SR 2007/113) is revoked on the close of 31 March 2011.
Transitional provisions If, before 1 July 2010, a financial institution offered debt secur- ities in reliance on the Securities Act (Financial Institutions) Exemption Notice 2007 under a prospectus that was regis- tered before that date, the financial institution may continue to rely on that notice in respect of securities offered under that prospectus (as if that notice continued in force after 31 March 2011).
If, on or before 31 March 2011, a financial institution of- fered debt securities in reliance on the Securities Act (Finan- cial Institutions) Exemption Notice 2007 and the Securities Act (Transition to Securities Regulations 2009) Exemption Notice 2010 under a prospectus that is registered on or before that date, the financial institution may continue to rely on those notices in respect of securities offered under that prospectus (as if those notices continued in force after 31 March 2011).
Dated at Wellington this 22nd day of March 2011.

The Common Seal of the Securities Commission was affixed in the presence of: 7 Statement of reasons Securities Act (Financial Institutions) Exemption Notice 2011 Reprinted as at 28 September 2012 [Seal] J Diplock, Chairperson.
Statement of reasons Note: The following statement of reasons should be read in con- junction with the statement(s) of reasons appended to the: • Securities Act (Extension of Term, Amendment, and Tran- sitional Provision) Exemption Notice 2012 This notice, which comes into force on the day after the date of its notification in the Gazette and expires on 30 September 2012, re- places the Securities Act (Financial Institutions) Exemption Notice 2007 (the 2007 notice).
The notice provides financial institutions with exemptions, subject to conditions, from— • section 37A(1)(c) and (1A)(d) of the Securities Act 1978 (the Act); and various prospectus content requirements in Schedule 2 of the Securities Regulations 2009 (the 2009 regulations) that relate to financial statements.
• The exemptions allow financial institutions that have non-guarantee- ing subsidiaries that do not exceed 5% of the total assets, equity, and profit or loss after taxation of the group to use the financial statements for the whole of the financial institution group (including non-guar- anteeing subsidiaries) in respect of a prospectus for debt securities.
The Securities Commission considers that it is appropriate to grant the exemptions because— • allowing the financial institutions referred to above to use the financial statements for the whole of the financial institution group reduces the regulatory compliance costs of preparing a prospectus.
The 5% threshold ensures the financial statements presented provide a reasonable representation of the financial backing to the debt securities on offer: 8 Reprinted as at 28 September 2012 Securities Act (Financial Institutions) Exemption Notice 2011 Statement of reasons • • • • • consequential exemptions are appropriate to provisions of the Act that define the life of the prospectus (by reference to the date of the financial statements contained or referred to in the prospectus) and to provisions of the Act that specify the fi- nancial statements that must accompany a directors’ certificate extending the life of a prospectus.
The exemptions tie these requirements to the financial statements for the whole of the financial institution group: these exemptions continue existing exemptions in the 2007 no- tice from provisions of the Securities Regulations 1983 in re- spect of equivalent provisions of the 2009 regulations for these financial institutions with non-material non-guaranteeing sub- sidiaries: the financial statement disclosure requirements prescribed by the 2009 regulations are now consistent with generally ac- cepted accounting practice.
Accordingly, the exemptions that have been continued in this notice are no longer required to align the financial statements requirements with generally ac- In particular, conditions in the cepted accounting practice.
2007 notice prohibiting the use of equity accounting are not continued because, unlike the Securities Regulations 1983, the 2009 regulations do not prohibit the inclusion in prospectuses of financial statements that have used equity accounting as a basis of reflecting the value of non-wholly owned subsidiaries: the exemptions in the 2007 notice for financial institutions that have material non-guaranteeing subsidiaries (non-guarantee- ing subsidiaries that exceed the 5% threshold tests) are not continued in this notice.
The purpose of these exemptions was to align the financial statement disclosure requirements with generally accepted accounting practice and so these exemp- tions are now redundant: the transitional provisions reduce the short-term compliance costs resulting from the regulatory changes for issuers that have previously relied on the 2007 notice.

These issuers may continue to rely on the 2007 notice in respect of securities of- fered under an existing registered prospectus.
9 Statement of reasons Securities Act (Financial Institutions) Exemption Notice 2011 Reprinted as at 28 September 2012 Note: The preceding statement of reasons should be read in con- junction with the statement(s) of reasons appended to the: • Securities Act (Extension of Term, Amendment, and Tran- sitional Provision) Exemption Notice 2012 Issued under the authority of the Acts and Regulations Publication Act 1989.

Date of notification in Gazette: 24 March 2011.


10 Reprinted as at 28 September 2012 Securities Act (Financial Institutions) Exemption Notice 2011 Notes Contents 1 2 3 4 General Status of reprints How reprints are prepared Changes made under section 17C of the Acts and Regulations Publication Act 1989 List of amendments incorporated in this reprint (most recent first) 5 Notes 1 2 3 General This is a reprint of the Securities Act (Financial Institutions) Exemption Notice 2011.
The reprint incorporates all the amendments to the notice as at 28 September 2012, as speci- fied in the list of amendments at the end of these notes.

Relevant provisions of any amending enactments that contain transitional, savings, or application provisions that cannot be compiled in the reprint are also included, after the principal enactment, in chronological order.

For more information, see http://www.pco.parliament.govt.nz/reprints/.
Status of reprints Under section 16D of the Acts and Regulations Publication Act 1989, reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by the amendments to that enactment.

This presumption applies even though editorial changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in the reprint.
This presumption may be rebutted by producing the official volumes of statutes or statutory regulations in which the prin- cipal enactment and its amendments are contained.

How reprints are prepared A number of editorial conventions are followed in the prep- aration of reprints.

For example, the enacting words are not included in Acts, and provisions that are repealed or revoked 11 Notes Securities Act (Financial Institutions) Exemption Notice 2011 Reprinted as at 28 September 2012 are omitted.
For a detailed list of the editorial conventions, see http://www.pco.parliament.govt.nz/editorial-conventions/ or Part 8 of the Tables of New Zealand Acts and Ordinances and Statutory Regulations and Deemed Regulations in Force.
Changes made under section 17C of the Acts and Regulations Publication Act 1989 Section 17C of the Acts and Regulations Publication Act 1989 authorises the making of editorial changes in a reprint as set out in sections 17D and 17E of that Act so that, to the extent permitted, the format and style of the reprinted enactment is consistent with current legislative drafting practice.

Changes that would alter the effect of the legislation are not permitted.
A new format of legislation was introduced on 1 January 2000.

Changes to legislative drafting style have also been made since 1997, and are ongoing.

To the extent permitted by section 17C of the Acts and Regulations Publication Act 1989, all legisla- tion reprinted after 1 January 2000 is in the new format for legislation and reflects current drafting practice at the time of the reprint.
In outline, the editorial changes made in reprints under the au- thority of section 17C of the Acts and Regulations Publication Act 1989 are set out below, and they have been applied, where relevant, in the preparation of this reprint: • omission of unnecessary referential words (such as “of this section” and “of this Act”) typeface and type size (Times Roman, generally in 11.5 point) layout of provisions, including: • • indentation position of section headings (eg, the number and heading now appear above the section) format of definitions (eg, the defined term now appears in bold type, without quotation marks) format of dates (eg, a date formerly expressed as “the 1st day of January 1999” is now expressed as “1 January 1999”) • • • • 4 12 Reprinted as at 28 September 2012 Securities Act (Financial Institutions) Exemption Notice 2011 Notes • • • • • • • position of the date of assent (it now appears on the front page of each Act) punctuation (eg, colons are not used after definitions) Parts numbered with roman numerals are replaced with arabic numerals, and all cross-references are changed accordingly case and appearance of letters and words, including: • format of headings (eg, headings where each word formerly appeared with an initial cap- ital letter followed by small capital letters are amended so that the heading appears in bold, with only the first word (and any proper nouns) appearing with an initial capital letter) small capital letters in section and subsection ref- erences are now capital letters • schedules are renumbered (eg, Schedule 1 replaces First Schedule), and all cross-references are changed accord- ingly running heads (the information that appears at the top of each page) format of two-column schedules of consequential amendments, and schedules of repeals (eg, they are rearranged into alphabetical order, rather than chrono- logical).
List of amendments incorporated in this reprint (most recent first) Securities Act (Extension of Term, Amendment, and Transitional Provision) Exemption Notice 2012 (SR 2012/294): clause 3 5 12 Wellington, New Zealand: Published under the authority of the New Zealand Government—2012 13