|These requirements relate to the Securities Act regime. From 1 December 2014, offers of financial products can also be made under the new Financial Markets Conduct Act (FMC Act) regime.|
Pre-registration review of offer documents (Prospectuses and Investment Statements)
Clear, concise and effective offer information helps retail investors make more informed investment decisions. We offer a pre-registration review service to help issuers, and their directors, feel more confident their offer documents are likely to satisfy FMA expectations.
Our focus during the transition to the FMC Act regime is on helping issuers who are making offers under that regime. However we may still provide feedback for offers being made under the Securities Act regime where the offers are novel or complex. Information on our review service for FMC Act offers also applies to novel or complex Securities Act regime offers.
Please note, you do not need to talk to us before registering your documents, particularly where there are similar types of offers already in the market that have good ‘precedents’. Our Guidance note: Effective Disclosure, clearly sets out our expectations for offer disclosure.
Registering offer documents under the Securities Act 1978 during the transitional period
For issuers using the Securities Act regime during the relevant transitional period, prospectuses must be registered with the Registrar of Financial Service Providers, through the Companies Office website.
Once a prospectus is registered, it may be reviewed by us, to confirm it complies with the Securities Act 1978 and the Securities Regulations.
Except where the registered prospectus is a continuous issue prospectus, issuers may not allot (or accept subscriptions) for a period of 5 working days after registration.
The purpose of this period (called the consideration period) is to provide the FMA with the opportunity if it so chooses to review the prospectus. We can extend this period for a further 5 working days. It can also waive some or all of the consideration period, allowing securities to be allotted earlier.
What do issuers have to do once a Securities Act prospectus is registered during the transitional period?
Within 5 working days of registration, issuers need to update their websites to let the public know that the prospectus has been registered. Your website needs to contain a reasonably prominent statement, or reasonably prominent link to a statement, that the prospectus has been registered, and describe where a copy of that prospectus can be found.
Post-registration review by the FMA
Once a prospectus is registered, we may review the document to determine whether it:
- complies with the Securities Act and the Securities Regulations
- contains any material incorrect descriptions or errors, or any material matter that is not clearly legible
- is false or misleading, or omits any material particular.
We are not obliged to review every registered prospectus, and may choose not to review in some circumstances. We take a risk-based approach to selecting prospectuses for review.
During the review of a prospectus, we may contact the issuer to ask questions about its disclosure and may ask the issuer to correct or improve its prospectus.
Following a review, or at any time later, if we think a registered prospectus does not comply with the Securities Act and the Securities Regulations or does not contain satisfactory disclosures, we can prohibit allotment and/or cancel the registered prospectus.
If we consider whether to cancel a prospectus we can make an interim order which can be in force for 15 to 30 working days. Securities cannot be allotted while an interim order is in force. We can make an interim order without giving notice to the issuer, though if we do this we will allow the issuer to make submissions after we have made the order.
Under the Financial Markets Authority Act 2011, nothing we do can be taken as a guarantee or representation that a prospectus complies with the law, or that we have reviewed a prospectus. We can exercise our powers to cancel a prospectus at any time, even if it has undergone pre-registration vetting or post-registration review.
When can you allot?
Unless your registered prospectus is a continuous issue prospectus, you cannot allot (or accept subscriptions) until the end of the consideration period. Usually this is 5 working days after the prospectus is registered, although we can extend this to 10 working days. We may also notify you that the period has been shortened, and securities can be allotted.
If your registered prospectus is a continuous issue prospectus you may allot from the date of registration. We may determine (by advance notice) that certain classes of continuous issue prospectuses are still subject to the post-registration stand down period for allotment.
If your registered prospectus relates to securities for which there is already a registered prospectus, securities may be allotted and subscribed for under that original prospectus, (provided that it is still current) despite the replacement registered prospectus still being subject to review.
How do you register an amendment to a registered prospectus?
If your offer is still subject to the Securities Act regime, you register an amendment to a registered prospectus in the same way you would register a prospectus. See the Companies Office website.
There is no stand down period for allotment in these circumstances.
Issuers will also be required to update their websites within 5 working days of registration, to notify the details of the amendment.
How do you register trust deeds and deeds of participation?
See the Companies Office website for information on registering trust deeds and deeds of participation, and any amendments to those deeds.
We are notified when a trust deed or deed of participation is registered. We may, at any time, prohibit allotment or cancel a prospectus where we determine that a trust deed or deed of participation:
- does not comply with the Securities Act or the Securities Regulations
- contains any material incorrect descriptions or errors, or any material matter that is not clearly legible.