Issuers are involved in first making a financial product available. Under section 11 of the Financial Markets Conduct Act 2013, an issuer in relation to an equity security is the company, industrial and provident society, building society, or other entity to which the security relates.
An issuer in relation to a debt security means the person that is liable to repay money or pay interest or other returns under the security (other than as a guarantor).
The PDS is aimed at prudent but non-expert investors. It is required to be prepared in a clear, concise and effective manner and has a prescribed format and content to make offer information accessible.
A compulsory key information summary (KIS) at the front of the PDS gives investors an overview of key characteristics and the specific risks of the financial product.
A PDS must comply with prescribed length limits. These limits are the maximum allowed – issuers are encouraged to use less where possible. The maximum limits are:
Page limit (printed A4 pages)
Or, word limit
Making research and other information available to retail investors
We have developed an information sheet for brokers, issuers and research providers to encourage wider publication of research on IPOs for retail clients.
It clarifies that under NZ law there are no required black-out periods and that the FMC Act has a more flexible regime for retail advertising. It also provides examples of the typical controls we expect investment banking firms to have in place to manage conflicts of interest.
Maintain high standards of corporate governance and board behaviour
This handbook assists directors, executives and advisers of non-listed and public-sector companies, and other entities, to apply corporate governance principles to their particular entity. The principles do not impose any new legal obligations, and reporting against them is voluntary. However, the principles do set out standards for corporate governance that we believe directors and executives should apply, and report on, to their investors, shareholders and stakeholders.
A listed issuer is one who is party to a listing agreement with a licensed market operator for a licensed market.
Listed issuers must comply with the listing rules of the relevant licensed market, as set by the licensed market operator. These issuers, and certain persons related to them, also have ongoing disclosure obligations.
Listed issuers are required to disclose information to the market in accordance with any continuous disclosure provisions of the listing rules of the relevant licensed market.
The continuous disclosure provisions may vary between different licensed markets.
Directors and senior managers of listed issuers, and persons holding specified amounts of quoted voting products of a listed issuer are required to disclose certain information to the issuer and to the market by the FMC Act. Listed issuers are required to keep registers of that disclosed information.
This guidance note outlines our expectations for how issuers of debt securities, managers of managed investment schemes and their supervisors should approach their governance accountabilities and responsibilities. It describes how the overarching duties of care, acting in the best interests of clients, and fair dealing set the scene for how each participant meet their governance responsibilities. It also describes how participants must interact with each other and with the FMA and addresses the need for governing documents to be effective and fit for purpose. Download theGuidance note: Governance under Part 4 of the FMCActPDF.
The FMC Act encourages and expects increased supervisor interaction. The FMC Act supports this through the accountability and reporting framework it establishes. On an ongoing basis, your supervisor has a requirement to engage and monitor you more actively. You also have obligations to engage and interact effectively and collaboratively with your supervisor. We expect you to work effectively with your supervisor to ensure governing documents are effective and fit for purpose.
Your supervisor is your ‘front line’ compliance supervision relationship. This means you will first need to address issues raised by your supervisor directly with them, not with FMA. Your supervisor may seek our involvement if necessary or desirable. We will have an increased focus on working with and through your supervisor in the first instance wherever appropriate, rather than directly with you. In some circumstances, it may be appropriate for us to engage directly with you and in those cases, we will keep your supervisor informed.
Closely-held equity issuers
If an issuer making a regulated offer of equity securities that is a voting product is not an FMC reporting entity, if they have:
'voting products' is a defined term and includes ordinary shares and certain products that are convertible to ordinary shares.
This means issuers of non-voting equity products won’t be able to take advantage of the statutory exemption under the FMC Act, even if they were able to use it under the Financial Reporting Act 1993.
The 50-shareholder or parcels-of-shares rules are consistent with the Takeovers Code. The Takeovers Panel’s Guidance Note on Small Code Companies is useful to help how to count shareholders for this purpose.