Prospectus rules exemptions

Press, 26 February 1983, Page 20

Prospectus rules exemptions

PA Wellington Sports clubs, churches, trade unions, and a wide range of other societies and groups will be exempted from new regulations governing the issue of prospectuses and financial advertising. The commission has power to make exemptions under the Securities Amendment Act passed in December, but not yet in force. The securities regulations apply to all debt securities, equity securities, and participatory securities offered to the public by individuals, companies, and organisations of every description. The commission has decided to exempt four types of organisations from compliance with part 2 of the act. Charitable, educational, religious or recreational organisations as well as trade or professional unions or associations will be exempt from the prospectus provisions and some of the advertising pro-

visions for raising of debt securities. But the exemptions will be granted only where less than $200,000 a year is raised and debts in total are less than SIM. Charitable trusts which borrow will be exempt, as will organisations which issue debt securities to people already holding a similar class of security. Commercial bill dealers will also be exempt, but unlike the other groups, will have to apply to the commission for exemption. The Securities Commission said it was also considering other class exemptions, including for overseas organisations with New Zealand members, trustee group investment funds, and organisations (specially sports clubs) where members had interests in assets. The commission intends to make its formal recommendations on the regulations to. the Government early next month.