Govt seeks input on new capital raising rules

Commerce Minister Simon Power

A streamlined regulatory environment for businesses seeking to raise capital is moving closer with the Government yesterday calling for input on the Capital Market Development Taskforce's "simplified disclosure prospectus" proposal.

The taskforce's interim report has resulted in the development of the Securities Disclosure and Financial Advisers Amendment Bill, which is before a select committee, and changes to NZX listing rules.

Yesterday, the Ministry of Economic Development released a discussion document seeking comment on a number of issues.

Some deal with proposals to update regulations that have been in force since 1983, Bell Gully senior associate Stephen Layburn told the Business Herald yesterday.

Layburn said one of the central questions was about limiting the application of the "simplified disclosure prospectus" regime to the more common securities, principally vanilla equity and debt issues.

Commerce Minister Simon Power said the proposed amendments "will be a welcome step forward for companies seeking to raise capital".

Layburn said the "simplified disclosure prospectus" regime would effectively reduce the requirement for information about listed issuers which is already available to investors via the continuous disclosure regime to be included in the prospectus for an offer of new securities.

Other proposed changes to regulations included:

Align the financial information in prospectuses with financial reporting standards and with accounting practice.

Expand the definition of borrowing group - for the purposes of disclosure by debt issuers - to include guaranteeing parent and sister companies, as well as guaranteeing subsidiaries.

More flexibility around what may be included in advertisements.

Align requirements around the disclosure of directors, promoters, and managers' interests across the different types of issuer.

Submissions close on May 8.

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