Rules relax as trans-Tasman 'trust' takes hold
The New Zealand market may soon experience a flood of Australian investment products following the signing of a ground breaking trans-Tasman deal last week.
Tuesday, June 17th 2008, 6:19AM
by David Chaplin
According to Dalziel, the reduction of red tape should save issuers anywhere between $10,000-50,000, opening the way for "a wider choice of investment opportunities".
The agreement, which was heralded as a "world first", allows Australian and New Zealand-based issuers of shares, managed funds, debt securities and certain other investment products to raise money in either country using a single prospectus or offer document.
Offers issued under the mutual recognition scheme must, however, carry a warning that the product does not comply with that country's law as well as other wording highlighting currency and tax differences.
The agreement will also result in the New Zealand and Australian financial regulators working together much more closely than previously.
The New Zealand Companies Office (NZCO) and the Australian Securities and Investments Commission (ASIC) have entered a memorandum of understanding "for the exchange of information, data for companies carrying on business on both sides of the Tasman and mutual assistance".
As well, the New Zealand Securities Commission, ASIC and the NZCO will cooperate in administering the scheme.
"For example, the arrangements deal with notification by one regulator to the other if they initiate enforcement action against an issuer, where a complaint is made against an issuer, or where changes are made to offer documents," an explanatory document says.
Dalziel said the agreement was only possible because of the "high degree of trust" between the two governments and regulatory authorities.
"We were the first two jurisdictions in the world to sign such an agreement - although Canada and the US are just about to do something similar," she said.
According to Dalziel, other joint initiatives are in the pipeline including a move to allow portability of superannuation accounts between Australia and New Zealand.
Last week, Finance Minister Michael Cullen also put the issue of mutual recognition of imputation credits back on the agenda.
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