Listed companies will no longer have to advise shareholders in
writing each year that the annual report is available online, or in hard copy
by request. The requirement to send a section 209 Notice is considered
"redundant in the digital age".
The change was provided for in the Statutes Amendment Bill, which went through
its third reading in the House just before Christmas. It will come into
effect once substantive regulations have been finalised.
The Ministry of Business, Innovation and Employment is expected to undertake a
targeted consultation on these in the New Year, meaning that they are unlikely
to be in place until the March reporting season at the earliest.
A new section 209C has been incorporated into the Companies Act to:
exempt "FMC reporting entities" from complying
with sections 209 and 209B of the Act (setting out their current
obligations to provide an annual report to shareholders, essentially the s
209 Notice requirements), and
provide that they (and non-FMC companies) may instead opt
to be governed by new provisions to be added to the Financial Markets
Conduct Regulations (FMC Regulations).
How does this differ from what was initially proposed?
The Bill had included a complete rewrite of the regime for giving notice of
annual reports, drawing on an earlier Private Members Bill. Unfortunately
the drafting was unclear, and inadvertently could have required privately owned
companies to publish their annual reports on a website.
However, a late Supplementary Order Paper (SOP) on 13 December replaced
this rewrite with the new mechanism for the detail to be specified in the FMC
Regulations, pushing out any substantive change until the new regulations are
The intent behind the new regime was supported by all parties in Parliament,
and strongly supported by the Listed Companies Association and Chapman Tripp.
Until the draft FMC Regulations are introduced, it is not known precisely what
they will require of participating companies but we expect they will reduce
compliance costs in relation to the way in which annual reports must be made
available (including by electronic means).
For NZX-listed issuers, the listing rules currently draw on the existing s 209
regime for notification of availability of half year reports. Some
consequential rule changes or class waivers will likely be required for
simplified notification of half year reports.