Financial Markets Conduct (Clearwater Golf Club Limited) Exemption Notice 2024

Clearwater Golf Club Limited (Clearwater) is exempted from Part 7 of the Financial Markets Conduct Act 2013 (the FMC Act).    

Clearwater operates a golf club. It is an FMC reporting entity due to a corporate structure adopted before the enactment of the Financial Markets Conduct Act 2013. Back then, Clearwater issued redeemable preference shares (membership shares) for the sole purpose of giving member shareholders the rights to play golf. Although the membership shares are not in the nature of financial product investments, Clearwater remains an FMC reporting entity only because membership shares are regulated products.    

The Exemption Notice provides relief from Part 7 requirements in cases where a company operates for a communal or co-operative purpose, and where its shares are not in the nature of investment products, but instead grant non-financial rights to shareholders. The exemption avoids potential unfairness between companies and incorporated societies that perform exactly the same functions, but where companies carry a heavier regulatory burden solely because they are FMC reporting entities. The Exemption Notice removes unnecessary compliance burdens imposed by law on an activity that is not a financial product investment or a financial markets activity, whilst still continuing to ensure the provision of timely, accurate and understandable financial information to assist decision making by member shareholders.    

The Exemption Notice is subject to conditions which together replicate the financial reporting, auditing and annual reporting requirements under the Companies Act 1991. Conditions relating to carrying out an audit and certain annual report requirements will not apply where 95% of member shareholders vote to opt out of compliance with those conditions. The effect of the conditions is to ensure that member shareholders receive relevant financial information.

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