|Name of Notice||Financial Markets Conduct (Foodstuffs Provident Fund) Exemption Notice 2021|
|Gazette Notification Date||2021-06-30|
|Date In Force||2021-07-01|
|Act||Financial Markets Conduct Act 2013|
|Type||Individual Exemption Notice|
Summary: The Foodstuffs Provident Fund (the Fund) is a superannuation scheme that has as its core focus the investment in land leased back to shareholders of the investors’ employer, Foodstuffs North Island Limited (Foodstuffs). Foodstuffs is a cooperative, with its shareholders owning and operating supermarkets. The Fund is unique in that it has been set up to provide for employees’ retirement benefits by expressly investing into in-house assets of the particular kind, designed to provide employees with an interest in the underlying businesses of the cooperative shareholders on the same terms as the cooperative itself. The Fund was the subject of the Financial Markets Conduct (Foodstuffs Provident Fund) Exemption Notice 2016 that expired on 30 June 2021.
The trustees of the Fund have applied for a similar exemption for another five years, in particular the current exemption, the Financial Markets Conduct (Foodstuffs Provident Fund) Exemption Notice 2021 (the Exemption), would be a continuation of the exemption from the in-house assets restriction in s 176 of the Financial Markets Conduct Act 2013 (the FMCA) (as the other previously exempted provision was the transitional provision in cl 9 of Sch 4 of the FMCA which is no longer relevant). This Exemption would only apply to permitted in-house assets which are land that the Fund invests in that are leased to shareholders of Foodstuffs (the Permitted In-house Assets). To the extent that it applies to Permitted In-house Assets, this Exemption will effectively exempt the trustees of the Fund from the prohibition on acquiring any new in-house assets if, as a result of the acquisition, the Fund would have, or increase, an in-house asset ratio of 5% or more in relation to any related party or scheme participant.
Briefly, the conditions of the Exemption include requirements that the statement of investment policy and objectives of the Fund must specify a maximum limit on the Fund’s investment in Permitted In-house Assets, a minimum limit that Foodstuffs or one of its subsidiaries must hold in these Permitted In-house Assets, and a maximum limit on the Fund’s investment in Permitted In-house Assets as a percentage value of Foodstuffs’ total land portfolio. The trustees of the Fund will also be required to inform both current and new scheme participants that the Fund is relying on this Exemption, and identify the risks associated with investing retirement saving though the Fund in the Permitted In-house Assets.