World first in comprehensive mutual recognition of securities offerings

New Zealand Commerce Minister Lianne Dalziel and Senator the Hon Nick Sherry, Australian Minister for Superannuation and Corporate Law, today welcomed the entry into force of a landmark agreement between Australia and New Zealand that will smooth the way for businesses to raise capital and for the public to invest with greater ease in both countries.

The Mutual Recognition of Securities Offerings regime, launched today by both Ministers at a meeting at the New Zealand Parliament, allows for the same securities offerings document to be issued in both countries. The Australia-New Zealand approach is considered to be world leading in this area.

Under the regime, issuers can extend an offer that is being lawfully made in either Australia or New Zealand to investors in the other country without being required to fulfil additional requirements that would make the process financially prohibitive.

Minister Dalziel and Minister Sherry welcomed today’s entry into force of the agreement as a key advance in the ‘Single Economic Market’ agenda. Its implementation has long been a goal on both sides of the Tasman.

"This is a tremendous step forward," Lianne Dalziel said. "It will remove barriers to trans-Tasman securities offerings and reduce costs to business as only one prospectus will be needed in most cases and investors will benefit from having a wider choice of investment opportunities.

"This regime is another important step towards a seamless trans-Tasman business environment.”

Minister Sherry said the agreement marked Australia and New Zealand as global leaders in reducing the cost to businesses of raising capital across international borders.

"In a globalised world economy, this agreement is yet another important step in our two countries staying ahead of the pack,” said Minister Sherry.

“I am delighted that this mutual recognition regime has entered into effect. It will greatly benefit businesses looking to access capital, while at the same time maintaining investor protection through appropriate disclosure," Minister Sherry added.

Dr Martin Fahy, the Chief Executive Officer of the Financial Services Institute of Australasia (FINSIA) endorsed the arrangement, saying “FINSIA strongly supports the initiatives adopted by the Australian and New Zealand governments to improve trans-Tasman economic co-operation. This mutual recognition regime will benefit business and individuals by removing barriers to the integration of trans-Tasman activity.”

Minister Dalziel and Minister Sherry described the regime as a major achievement under the Memorandum of Understanding on Business Law Coordination between New Zealand and Australia. It is widely supported by businesses in both countries. Legislation and regulations were recently introduced in each country to bring this regime into effect.