S.C. plans released

Press, 31 March 1980, Page 24

S.C. plans released

PA Wellington ■ The long awaited draft regulations . covering PI -08 ' pectuses and. financial advertising were published yesterday by the Securities. Com-

mission. The public has until May 31 to make submissions on the proposals and the commission hopes to transmit its final recommendation to the Govemment by June ,30. If accepted by the Government, the new law will cover all kinds, of public offering Of securities, and will demand substantial disclosure of information by fundraisers. c The commission says the cornerstone of . its recommendations is that a person who solicits public investment should be obliged to inform the public of the material facts relevant to the proposal, as -well as making a public statement of the terms of the solicitation. Full details of the proposed regulations, and of the commission’s thinking are set out in a 189-page. document which the public can purchase from today' for $lO a copy. The chairman of the commission (Mr C. I. Patterson) said the proposals. would be of great interest, to the commercial community . and to the public at large. The procedure being followed was probably unique in the history of law making in New Zealand, since this was the first time, to Mr Patterson’s knowledge that people taking an interest in law making had been given the opportunity to express their views on the text of law proposals put forward from' an official source before they had been adopted by the Government. Mr Patterson hoped that the co-operation of interested parties would ensure that the experiment of exposing draft regulations for

public consideration and comment would be successful. - - The commission s proposals set out detailed requirements to be followed in advertisements offering /securities to the public, and. list similar requirements for prospectuses. ■ Among the conclusions of the report is the view that while it is impossible to display a whole prospectus in a single radio/or television advertisement, this form of advertising should not be banned. ■■ ■■ ■ The commission has delayed consideration of how far publishers should be responsible for advertisements,

that a more inquiry into this and relates topics is required. ~ft| In dealing with advertjj; ing, the commission con eludes in principle that tfii regulations should authoris ■ advertisements that are nb! inconsistent with the pros pectus, and which are no ! likely to deceive, mislead, o; confuse. - . The Securities Commisslo:: was set up in May last yeg, and part one of the Secu rities Act 1978 is already force. Part two, covering re strictions on the offer an allotment of securities to th public, is not in force, a&, cannot operate until th; regulations are approved.