Offers under the FMC Act

Who needs to comply

Anyone offering financial products for issue or sale needs to comply with financial markets legislation. The Financial Markets Conduct Act 2013 (FMC Act) defines these people as issuers. See more on how they are defined.

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What is a 'regulated offer'

A regulated offer means an offer of financial products to one or more investors where at least one of those investors requires disclosure, usually a product disclosure statement. See section 41 of the FMC Act .

Our disclosure requirements mentioned below summarises the required disclosure for regulated offers.

Note: If a Schedule 1 exclusion applies to all investors, then it isn’t a regulated offer.

Issuers

Issuers are people who are involved in first making a financial product available. See section 11 of the FMC Act. They include:

the person (other than the guarantor) liable to pay under a debt security
the company to which an equity security relates
the manager of a managed investment scheme
any party that has entered into derivatives.

Offerors

People who are the issuer for an offer of finanical products for issue or in any other case the person who has the capacity, or agrees to, transfer the financial products. See section 6 of the FMC Act for more information.

The FMC Act defines 4 types of financial products

Product type	Description	Link to the legal definition
Debt security	A product where there is a right to be repaid money or paid interest on money.	Section 8 (1)
Equity security	A share in a company, industrial and provident society or building society.	Section 8 (2)
Managed investment product	An interest in a managed investment scheme that allows investors to participate in, or receive, financial benefits produced principally by the efforts of another person under the scheme. There are two types of managed investment schemes: Managed fund Schemes where either the interests are ordinarily continuously offered and redeemed on a basis calculated wholly or mainly on the value of the scheme property, or where at least 80% of the scheme’s assets are in certain specified liquid assets. Other managed investment schemes Examples of managed investment schemes that are not managed funds could include forestry partnerships and property syndicates.	Section 9 Regulation 5
Derivative	A product where an agreement is reached under which consideration may be required at a future time, and the value of the agreement or consideration is linked to something else, for example an asset, a rate, an index or a commodity. This covers a wide range of products including: futures contracts and forwards options (except options to acquire an equity security, a debt security, or a managed investment product by way of issue) swaps contracts for difference, margin contracts and rolling spot contracts caps, collars, floors and spreads. The definition is also wide enough to catch new derivatives products as they are developed.	Section 8(4)

Disclosure requirements

Information about ‘regulated offers’ must be disclosed in a product disclosure statement (PDS) and on the Disclose Register. Together, this information must include all material information about the offer of a financial product and be up-to-date, accurate and understandable. The purpose of the information is to assist investors with their investment decisions.

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Product disclosure statement (PDS)

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:

Product type	Page limit (printed A4 pages)	Or, word limit
Debt security	30	15,000
Equity security	60	30,000
Managed investment scheme: • managed fund • other MIS	12 60	6,000 30,000
Derivative	30	15,000

The disclose register

Material information about a regulated offer not included in a PDS needs to be uploaded to the Disclose Register. It also has online registers for managed investment schemes split into managed funds and other managed investments schemes.

The Disclose Register provides supporting information for investors, and enables advisers and analysts to carry out more in-depth research and analysis. We published guidance on the content and form of the Disclose Register information.

Schedule 1 offers

Schedule 1 of the FMC Act sets out a series of statutory exclusions where lighter compliance paths are appropriate.

More

Pre-registration review service

We offer a pre-registration review service to help issuers and their directors, feel more confident that their offer documents are likely to satisfy our expectations.

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Your obligations

In addition to the obligations about offer information, an issuer will also have ongoing obligations under the FMC Act.

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Offers under the FMC Act

What is a 'regulated offer'

Issuers

Offerors

The FMC Act defines 4 types of financial products

Product disclosure statement (PDS)

The disclose register

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