Govt introduces bill to reduce capital-raising costs

By Pattrick Smellie

Wednesday 18th February 2009

Commerce Minister Simon Power today introduced legislation to Parliament that is intended to allow lower-cost capital-raising, including the creation of a simplified format for investment prospectuses.

The Securities Disclosure and Financial Advisers Amendment Bill will enact key recommendations of the Capital Market Development Taskforce, led by veteran New Zealand merchant banker, Rob Cameron.

The new rules would "will provide greater certainty to businesses wanting to raise capital in today's troubled markets", Power said. The Bill is intended to simplify capital-raising while ensuring timely, accurate information disclosure.

"A simplified disclosure prospectus will help do away with a lot of duplicated information that many businesses listed on the Stock Exchange face when making a securities offer."

The new prospectus will enable listed companies to offer certain debt and equity securities without the need to duplicate information that is already publicly available under the continuous disclosure obligations.

"Existing rules to ensure investors are protected will continue to apply."

The bill also proposes other technical changes to categories of people exempt from disclosure requirements that will make it easier for all companies, listed and unlisted, to raise capital.

"This part of the bill will particularly benefit small and medium-size businesses that traditionally seek capital by 'shoulder-tapping' known investors," he said. "I encourage both industry and investors to remain actively involved in the development of the bill through the Select Committee process."

Comments from our readers

No comments yet