The Financial Markets Authority (FMA) survey released today showing increased public confidence in New Zealand’s financial markets is good news and suggests that the substantial legislative reforms of the past several years are making a mark.
We would expect further improvements, given that a major source of continuing investor dissatisfaction – lengthy prospectuses and investment statements – is in the process of being addressed. Just as importantly, the freeing up of capital raising rules will likely open up opportunities for retail investors.
The Ministry for Business, Innovation and Employment (MBIE) has just put out for consultation draft disclosure regulations under the Financial Markets Conduct Act (FMCA) for the core financial products – including equity and debt offerings.
The key offer document under the new FMCA regime will be a PDS, the content and length of which will be prescribed with the aim of encouraging shorter documents which are more accessible and reader-friendly.
The FMA effectively brought forward these changes by allowing two recent equity issuers – Genesis and Intueri – to use a “PDS-like” format. This required securing a special exemption from the normal Securities Act requirements. Chapman Tripp was heavily involved in both of these IPOs.