Statement of reasons

This notice, which comes into force on the day after the date of its notification in the Gazette, amends the Securities Act (Great Britain Collective Investment Schemes) Exemption Notice 2004 (the “principal notice”).

The principal notice enables securities in 2 types of collective investment schemes operating in England, Wales, and Scotland (authorised unit trusts and open-ended investment companies) to be offered in New Zealand without a New Zealand registered prospectus and investment statement. Instead, a key features document prepared in accordance with the requirements of the United Kingdom Financial Services Authority can be used.

Due to new European Union requirements, from 1 October 2005 some collective investment schemes will be required to use a simplified prospectus, instead of a key features document, to offer securities to investors.

This notice amends the principal notice to enable authorised unit trusts and open-ended investment companies operating in England, Wales, and Scotland to use a simplified prospectus to offer securities to the public in New Zealand instead of a key features document.

This notice amends the principal notice by—

• inserting a definition of simplified prospectus; and

• inserting a definition of short form disclosure document, meaning either a key features document or a simplified prospectus; and

• changing references in the conditions to the principal notice to a key features document, to a short form disclosure document.

The Securities Commission considers that the amendment is appropriate for the following reasons:

• the Commission’s exemption policy for overseas collective investment schemes states that it will consider exempting these schemes from the requirement to have an investment statement where the overseas regulatory system requires the use of an equivalent plain-English offer document. This policy is available on the Commission’s website at www.seccom.govt.nz/notices/summaries/policy.shtml:

• on this basis, the principal notice exempted issuers from the requirement to provide an investment statement to investors so long as a key features document, required under United Kingdom law, is used instead:

• European Union rules on product disclosure now require a simplified prospectus to be used to offer securities to investors in certain collective investment schemes in place of a key features document. The content requirements of this simplified prospectus are very similar to those of a key features document. The Commission is satisfied that the simplified prospectus will serve as an equivalent plain-English offer document that can be used in place of an investment statement.