Buddle Findlay welcomes upcoming changes to the Financial Markets Conduct Regulations 2014 (Regulations) that will make it optional for issuers of equity securities to provide GAAP compliant prospective financial information (PFI) when undertaking an initial public offering of equity securities on a financial product market.
The upcoming changes to the Regulations, which will come into force on 12 June 2025, are a welcome change to the current complex mandatory requirements for a company when listing on the NZX.
Currently, the Regulations require issuers of equity securities that are undertaking an IPO to include GAAP compliant PFI in their product disclosure statement for the offer. This is a costly and time consuming exercise for new issuers that can act as a significant disincentive to listing.
The amendments to the Regulations remove these mandatory requirements, and instead provide issuers with discretion to decide whether to include PFI in their PDS. Any such issuers who choose to provide PFI may prepare it on any basis (whether in accordance with GAAP or not) and present it in any form (for example, a table or a narrative description), without being bound by the previously mandated preparation and presentation guidelines.
Changes to the PFI requirements, as well as a number of other initiatives underway to reduce red tape and compliance costs in New Zealand's capital markets are a positive step which are expected to make listing and raising capital on the NZX a more attractive option for prospective issuers and their boards. Other regulatory roadblocks that are subject to ongoing review include:
- Director liability settings for listed issuers
- Mandatory climate related disclosures, which are expected to be right sized to more closely align with equivalent markets
- Disclosure requirements for IPOs and new listings, which are proposed to be simplified.
Buddle Findlay is pleased to see these and other changes to market settings on the regulatory agenda.
If you want to know more about the changes to the Regulations or are interested in exploring your options in relation to New Zealand's capital markets, please get in touch with our experts.
This article was co-authored by Nick Bragg (partner), Sarah McEwan (partner), Tom Montgomerie (senior associate) and Hayley Shallard (solicitor).
