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Corporate Reporter 22 August 2017

WELCOME to Issue No. 47 of Corporate Reporter, Bell Gully's regular round-up of corporate and general commercial matters, designed to keep you informed on regulatory developments, legislation and cases of interest.

IN BRIEF Items in this issue include:

• Improved annual report notification requirements for FMC reporting entities,

• New financial advice legislation and Trusts Bill introduced to Parliament,

• Further modifications to the FMC Act regime,

• Phase II of the AML/CFT Act regime is in place,

• Passing of Cartels Bill marks new era in New Zealand competition law, and

• The latest media releases from the New Zealand Commerce Commission and the Australian Competition and Consumer Commission.

CORPORATE REPORTER – 22 August 2017 2

CONTENTS

CAPITAL MARKETS

• Improved annual report notification requirements for listed companies and other FMC reporting entities • New financial advice legislation introduced to Parliament • Further modifications to the Financial Markets Conduct Act regime • Proposed changes to derivatives investor money handling obligations • Consultation on foreign margin requirements for OTC derivatives • Consultation on guidance for Asia Region Funds Passport • Exemption permits non-NZX brokers to have client money trust account buffers • New FMA and FMC Act fees and levies in force • FMA consults on exemption from market index requirement in fund updates • Penalty imposed and appeals dropped in the FMA v Warminger case • New FMA guidance on non-GAAP financial information • Financial Markets Conduct (KiwiSaver Confirmation Information) Methodology Notice 2017 • Compliance relief provided for managers of schemes, unit trusts and funds being wound-up • Gender diversity statistics for NZX Main Board companies released • NZX Regulation clarifies use of default proxy mechanisms • New round of NZX practice notes released • NZX to review its equity markets and listing rules

COMMERCIAL

• Reminder that the Contract and Commercial Law Act 2017 is in force on 1 September • Bill to update the law governing trusts introduced • Phase II of the AML/CFT Act regime is in place • Emission Trading Scheme proposals for 2020 and beyond • Data Futures Partnership releases Guidelines for Trusted Data Use

COMPANY LAW

• Revised fees for Companies Office registrations • Supreme Court widens concept of ‘due debts’ in voidable transactions

COMPETITION AND CONSUMER LAW

• Passing of Cartels Bill marks a new era in New Zealand competition law • Government releases ‘Promoting Competition’ paper • The latest media releases from the New Zealand Commerce Commission • The latest media releases from the Australian Competition and Consumer Commission.

NEED MORE INFORMATION? For more information on any of the items in the Corporate Reporter, please contact your usual Bell Gully adviser or any member of Bell Gully’s Capital Markets, Commercial, M&A or Competition teams. Alternatively, you can contact the editor Diane Graham by email or call her on 64 9 916 8849.

Disclaimer This publication is intended to merely highlight issues and not to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to. You should take legal advice before applying the information contained in this publication to specific issues or transactions.

© Bell Gully 2017

https://www.bellgully.com/expertise/equity-capital-marketshttps://www.bellgully.com/expertise/commercialhttps://www.bellgully.com/expertise/mergers-and-acquisitionshttps://www.bellgully.com/expertise/competitionmailto:[email protected]


CAPITAL MARKETS

Legislative developments

Improved annual report notification requirements for listed companies and other FMC reporting entities Regulations have been introduced to facilitate a more simplified and cost-effective electronic notification process for making the annual reports of listed companies and certain other FMC reporting entities available to their shareholders.

The alternative annual report requirements came into effect on 9 August 2017 and are mandatory for New Zealand companies that are issuers of equity securities regulated by the Financial Markets Conduct Act (FMC Act) regime1 (which includes companies listed on the NZX Main Board, NZAX and NXT). However, there is a transition measure which allows these companies to elect not to comply with the new regulations for an accounting period that ends on or before 31 December 2017.

Other companies that are FMC reporting entities2 can also elect (by a board resolution) to opt-in to complying with the new alternative annual report requirements.

FMC Regulations provide alternative Section 209 Notice requirements

The framework for the alternative annual report requirements was initiated last year through an addition to the existing ‘Section 209 Notice’ requirements for providing annual reports to shareholders (in sections 209 and 209B of the Companies Act 1993). A new section 209C in the Companies Act exempts companies that are FMC reporting entities which must comply (or which opt-in to complying) with alternative annual report provisions in the Financial Markets Conduct Regulations 2014 (FMC Regulations) from complying with the Section 209 Notice requirements.

The alternative annual report requirements are set out in new regulations 61B to 61F of the FMC Regulations, through amendments made under the Financial Markets Conduct Amendment Regulations 2017.

In brief, the alternative annual report requirements in the FMC Regulations provide that:

• Publication on website: A company’s annual report must be made publicly available (and free of charge) on the website of the company or another website maintained by or on behalf of the company (and must remain available on the website for a period of at least five years).

• Notification must be made at least once: The company must notify each of its shareholders under the new provisions in the FMC Regulations to ask whether they wish to receive the company’s most recent and future annual reports free of charge either in hard copy or electronically by email, and let them know that they can make such a request to the company at any time in the future.

• Timing: The annual report must be made available on the website as soon as practicable after it is prepared (but in any event not later than 20 working days after it is prepared). The notice to shareholders must be sent: - not less than 20 working days before the date fixed for the company’s annual meeting of shareholders

for the accounting period; or - if the company is not required to hold an annual meeting of shareholders for that period, not more than

20 working days after the annual report for the period is prepared.

1 This includes those companies that first issued equity securities under the Securities Act 1978, but that are now subject to the FMC Act regime. 2 “FMC reporting entities” is defined in section 451 of the FMC Act, and includes issuers under the FMC Act regime, licensed banks, KiwiSaver scheme managers, and licensed insurers.

http://www.legislation.govt.nz/regulation/public/2017/0181/latest/DLM7383601.html


• Other notice requirements: The notice must include the prescribed information set out in the FMC Regulations. This includes the address for the website where the annual report will be located and a statement to the effect that the company’s annual reports for all future accounting periods will be publicly available on that site. The notice can be: - electronic if the shareholder has previously elected to receive communications electronically, - sent by a share registrar on behalf of the company, and can be combined with a notice under the same

regulation relating to another company.

• Shareholder requests: If a shareholder requests to be sent a copy of the annual report (in hard copy or electronically by email), the company must do so for that accounting period and each future accounting period until the request is revoked or the person ceases to be a shareholder.

NZX supports new reporting requirements

NZX has issued a supporting ruling which allows listed companies to rely on the alternative annual report requirements in the FMC Regulations and still be in compliance with NZX’s listing rules for both their annual reporting and half-yearly reporting requirements. A copy of the ruling is available here. NZX intends to amend its listing rules to reflect the changes under the FMC Regulations at a later date.

New financial advice legislation introduced to Parliament The Financial Services Legislation Amendment Bill which creates a new regulatory regime for providing financial advice was introduced to Parliament on 3 August 2017. It is an omnibus bill that repeals the Financial Advisers Act 2008 (FAA) and amends both the Financial Markets Conduct Act 2013 (FMC Act) and the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (FSPR Act). Once the Bill is enacted, the majority of the regulation for financial advice will sit within the FMC Act.

The Bill (as introduced) incorporates a number of changes that were made following a public consultation earlier this year on an exposure draft of the Bill. The Ministry of Business, Innovation and Employment (MBIE) has helpfully summarised the key themes from submissions it received on the draft Bill and has set out its responses to these (including a description of the changes that have been made to the Bill) on its website here. MBIE has also provided a summary of the main elements of the new regime and the transitional arrangements for the implementation of the Bill here.

Key changes from current financial advisers’ regime

The proposed changes to the financial advisers’ legislation are aimed at improving access to financial advice and creating an even playing field of regulation across the industry, including a universal code of conduct for all individuals and institutions giving financial advice. The key changes include:

• New licensing requirements: Anyone providing financial advice to retail clients (including robo-advice) will need to be licensed by the FMA under Part 6 of the FMC Act. Licensing will be at the firm level (i.e. financial advice firms and sole traders, being "financial advice providers") and conditions may be imposed restricting the type of financial advice able to be provided under a licence. The specific licensing requirements will be set in regulations and by the Financial Markets Authority (FMA).

• Modification and simplification: Unlike the FAA, the Bill is technology-neutral. The requirement for tailored advice to be given by a natural person has been removed. This enables the provision of robo-advice (online advice) and will help to future-proof the regime for technological developments. The distinctions drawn between class and personalised advice and category 1 products versus category 2 products have also been removed, making it easier for those giving advice to tailor the advice to the client.

https://www.nzx.com/regulators/NZXR/announcements/305252http://www.legislation.govt.nz/bill/government/2017/0291/latest/DLM7386310.html#d56e2http://www.mbie.govt.nz/info-services/business/business-law/financial-advisers/review-of-financial-advisers-act-2008/key-themes-from-submissions-on-the-draft-billhttp://www.mbie.govt.nz/info-services/business/business-law/financial-advisers/review-of-financial-advisers-act-2008/pdf-document-library/financial-advice-regime-overview.pdf


• New adviser designations: The terms "AFAs", "registered financial advisers" and "QFEs" will be replaced with the concepts of a "financial advice provider" (firms/sole traders) and two classes of individual adviser, "financial adviser" and "nominated representative", who will need to be engaged by a "financial advice provider". A "financial adviser" must be individually registered on the Financial Service Providers Register (FSPR) and will be responsible for complying with conduct and disclosure obligations. A "nominated representative" will not need to register and will not be individually accountable (except in limited circumstances).

• Conduct obligations: Anyone (including robo-advice platforms) providing financial advice to retail clients will be required to place the interests of the consumer first, only provide advice where competent to do so, and will be subject to a new code of conduct (which will set specific standards of knowledge, competence, skill, ethical behaviour, and client care). While similar requirements exist under the FAA, they only apply to AFAs who are a small subset of those who give advice.

• Disclosure obligations: Disclosure obligations will be improved to ensure clients receive core information such as remuneration (including commissions) at the time most relevant to their decision making. These obligations will sit in regulations yet to be released, and may vary for wholesale and retail clients.

• Compliance and enforcement: Financial advice providers will be subject to the FMC Act's compliance and enforcement tools such as civil pecuniary penalties for various breaches, and licensed providers will be subject to licensing actions such as censure and the imposition of action plans. Financial advice providers may also be civilly liable for their financial advisers (but they will not be liable for civil pecuniary penalties when a financial adviser has contravened a legislative duty and the financial advice provider has taken all reasonable steps to ensure that the adviser did not contravene that duty). The Financial Advisers Disciplinary Committee will be retained for breaches by financial advisers only.

• FSPR Act: The Bill introduces more stringent requirements for entities wanting to register on the FSPR. Entities will only be able to register if they are in the business of providing financial services to persons in New Zealand or otherwise required to be licensed or registered under any other New Zealand legislation. The Bill also introduces other mechanisms to reduce the risk of misuse of the register, such as providing a regulation-making power in relation to the statements that can be made about a provider’s registration, and providing a power for the Registrar to require information from persons other than the provider, such as a director of the provider.

New code of conduct

A Financial Advice Code Working Group was appointed in June to prepare a new code of conduct, and officially commenced on 1 August 2017. This is specifically provided for in the Bill, which enables a code working group to prepare a new code of conduct as if it were the code committee in order to expedite the transition to the new regime. The Code Working Group is expected to have produced a draft code of conduct by August 2018 for consultation.

Click here for further details on the Code Working Group.

Timing

The current expectation is that the Bill will be passed in mid-2018 and that the new regime will take effect in around May 2019, approximately nine months after a new code of conduct is expected to be approved. At that point, most elements of the new regime, including the legislative duties and enforcement mechanisms, would take effect. However, transitional licensing measures and competency safe harbours will be implemented for a period of two years to allow existing industry participants time to prepare for the new regime requirements.

http://www.mbie.govt.nz/info-services/business/business-law/financial-advisers/financial-advice-code-working-group


Next steps

In the coming months there will be a number of opportunities to be involved in the development of the new regime.

Although the Bill will officially lapse on 22 August when the House is dissolved for the general election, it is expected to be reinstated by the new House regardless of which parties form the government. After the Bill has been reinstated and read for the first time, public consultation on the Bill will be available during the select committee process.

In the meantime, MBIE will be engaging with consumers and industry to develop the draft regulations for the new regime, including regulations that set the new disclosure requirements. In addition, the Code Working Group will be engaging with consumers and industry to develop the code of conduct, and the FMA will work with the industry in order to help participants get ready for the new licensing regime for financial advice providers.

Further modifications to the Financial Markets Conduct Act regime

Amendments under the Regulatory Systems (Commercial Matters) Amendment Act 2017

On 9 August 2017 most of the amendments to the Financial Markets Conduct Act 2013 (FMC Act) set out in Part 7 of the Regulatory Systems (Commercial Matters) Amendment Act 2017 were brought into force under a Commencement Order.

These include:

• allowing financial statements for a registered scheme to be filed within four months of the scheme’s balance date (rather than the scheme manager’s balance date),

• extending the same class offer regime for quoted financial products in clause 19 of Schedule 1 to include offers of options to acquire quoted financial products of the same class,

• extending the time for disclosure by directors or senior managers who acquire a relevant interest in financial products as a result of being the trustee of a testamentary trust or the executor or administrator of the estate of a deceased person, and

• allowing the FMA to grant exemptions in relation to indemnities for directors or employees of overseas issuers, offerors, or licensees.

Amendments to the Financial Markets Conduct Regulations

The Financial Markets Conduct Amendment Regulations 2017 also came into force on 9 August 2017. In addition to the new annual report provisions for FMC reporting entities discussed in the item above, these regulations include provisions that:

• provide relief for defined benefit schemes from the requirement to enter certain information on the Disclose register,

• reduce the level of civil liability associated with breaches of certain disclosure obligations applying to offers made under the exclusions set out in Schedule 1 of the FMC Act, and

http://www.legislation.govt.nz/act/public/2017/0012/latest/DLM6971629.htmlhttp://www.legislation.govt.nz/regulation/public/2017/0182/latest/DLM7381101.html#d56e31http://www.legislation.govt.nz/regulation/public/2017/0181/latest/DLM7383601.html


• define an investment grade credit rating for a newly registered credit rating agency ‘Equifax Australasia Credit Ratings Pty Limited’ for the purposes of the provisions which determine whether non-bank deposit takers have to provide a credit risk statement to investors.

Further amendments proposed for the FMC Act

In addition to the proposed amendments to the FMC Act discussed in the item “New financial advice legislation introduced to Parliament” above, the Financial Services Legislation Amendment Bill also includes other minor changes and improvements to the FMC Act. This includes:

• providing for the approval of single person retirement schemes as a FMC Act Schedule 3 scheme to be cancelled on the request of the trustees where specific circumstances are met,

• providing for redeemable shares issued by industrial and provident societies to be treated as equity securities,

• providing discretion for the FMA to delay publication of exemptions where a risk of commercial prejudice may arise from earlier publication, and

• making a minor amendment to the same class exclusion for offers by way of sale in clause 19(1) of Schedule 1 of the FMC Act, to ensure the exclusion properly reflects market practice in relation to issues of financial products conducted as secondary sales.

Proposed changes to derivatives investor money handling obligations The Ministry of Business, Innovation and Employment (MBIE) has published a consultation paper outlining proposed changes to the Financial Markets Conduct Regulations 2014 (FMC Regulations). The proposed changes are intended to clarify the application of the derivatives investor money handling rules to money received in connection with exchange-traded derivatives, and place limits on the use of derivatives investor money to meet obligations relating to exchange-traded derivatives. MBIE has also sought feedback on whether enhanced reconciliation requirements are warranted given the changes to the FMC Regulations outlined in the consultation paper.

Submissions on the issues raised in the consultation paper are due by 4 September 2017. For further details on the proposed changes, see our earlier client update here.

Consultation on foreign margin requirements for OTC derivatives RBNZ and the Ministry of Business, Innovation and Employment have published a consultation document seeking feedback on the implications of foreign margin requirements for uncleared over-the-counter (OTC) derivatives in New Zealand. In particular, the consultation document seeks views on potential targeted legislative changes to enable affected New Zealand entities to comply with these margin rules. A copy of the consultation paper is available here. Click here for Bell Gully commentary on this consultation.

Submissions close on 24 August 2017.

http://www.legislation.govt.nz/bill/government/2017/0291/latest/DLM7386310.html#d56e2https://www.bellgully.com/publications/proposed-changes-to-derivatives-investor-money-handling-obligationshttps://www.bellgully.com/publications/new-zealand-proposes-steps-to-keep-playing-in-the-global-otc-sandpit


Consultation on guidance for Asia Region Funds Passport The Asia Region Funds Passport (ARFP) Joint Committee has published its interim “Guidance on host economy laws and regulations” for consultation.

The ARFP is intended to create a regional market for collective investment schemes (CISs) by facilitating cross-border offerings across participating economies (which at this stage includes New Zealand). It will reduce regulatory duplication for CIS operators by establishing a standardised set of requirements.

The interim Guidance is provided to help CIS operators make an initial assessment of the requirements under the ARFP, and is not intended to substitute for independent legal advice. The document sets out a number of key regulatory matters applicable to CIS operators seeking entry into Japan, Australia, Korea, New Zealand or Thailand under the ARFP.

Submissions on the interim Guidance close on 19 September 2017 and should be made to the Financial Markets Authority. Further details are available here.

Exemption permits non-NZX brokers to have client money trust account buffers The Financial Advisers (Non-NZX Brokers—Client Money) Exemption Notice 2017 came into effect on 28 July 2017 and, subject to certain conditions, exempts brokers who are not NZX Market Participants (non-NZX brokers) from the requirement that money and property held by a broker on his, her, or its own account must be held separately from client money and client property (as provided in section 77P(1A) of the Financial Advisers Act 2008). This allows non-NZX brokers to commingle client money with firm money to the extent that is reasonably necessary to reduce the risk of a shortfall arising in the client money held for a client in a client money trust account.

A similar exemption from section 77P(1A) was granted in 2015 to brokers who are NZX Market Participants.

New FMA and FMC Act fees and levies in force

Financial Markets Authority (Levies) Amendment Regulations 2017

The Financial Markets Authority (Levies) Amendment Regulations 2017, which came into force on 1 July 2017, increased the amounts of some of the levies payable under the Financial Markets Authority (Levies) Regulations 2012 (principal regulations), including the levies for a person: • applying to be a registered financial service provider, • lodging a product disclosure statement (PDS), • supplying an annual confirmation under section 28 of the Financial Service Providers (Registration and

Dispute Resolution) Act 2008, • lodging financial statements (or group financial statements) and auditor’s reports under section 461H of the

Financial Markets Conduct Act 2013, • required to make an annual return under the Companies Act 1993, the Limited Partnerships Act 2008, or the

Friendly Societies and Credit Unions Act 1982.

The regulations also adjust the levies for registered financial service providers (FSPs) by: • changing the amounts of the levies payable by different classes of FSPs, • changing the descriptions of the classes of FSP required to pay the levies, and

http://fundspassport.apec.org/consultation-on-arfp-guidance-2017/http://www.legislation.govt.nz/regulation/public/2017/0169/latest/whole.html#DLM7368605http://www.legislation.govt.nz/regulation/public/2017/0143/latest/DLM7298075.html#DLM7300205


• changing the thresholds that set different levy amounts based on the FSP’s revenue or the assets under their supervision or management.

Additional amendments will be made to the principal regulations on 8 September 2017 under the Financial Markets Authority (Levies) Amendment Regulations (No 2) 2017. These amendments include provisions that will: • reduce the levy payable by providers of wholesale discretionary investment management services, • allow levies to be charged for each multi-fund investment option or life cycle stage of a life cycle investment

option covered by a PDS, so that they are treated like other funds on lodgement of a PDS for managed investment products in a managed fund, and

• allow the FMA to recover debt collection costs where FMA is required to chase unpaid amounts from those parties that it invoices directly.

Financial Markets Conduct (Fees) Amendment Regulations 2017

The Financial Markets Conduct (Fees) Regulations 2014 have been amended by the Financial Markets Conduct (Fees) Amendment Regulations 2017 (which came into force on 1 July 2017). The regulations reduce the fee paid by reporting entities lodging financial statements under section 461H of the Financial Markets Conduct Act 2013 (the FMC Act) from NZ$255.55 to NZ$201.25. However, those reporting entities must also now pay a levy of NZ$55.20 in respect of the lodging of financial statements under section 461H of the FMC Act (see the Financial Markets Authority (Levies) Amendment Regulations 2017 noted above).

Further amendments will be made to the principal regulations on 8 September 2017 under the Financial Markets Conduct (Fees) Amendment Regulations (No 2) 2017. The principal regulations currently impose a fee for lodgement of a PDS or confirmation notice for managed investment products in a managed fund of NZ$600 per fund covered by the PDS or notice. These amendments will result in the same fee being payable for each multi-fund investment option or life cycle stage of a life cycle investment option covered by the PDS or notice.

FMA consults on exemption from market index requirement in fund updates The Financial Market Conduct Regulations 2014 require managers of managed investment schemes to disclose the return of a ‘market index’ in quarterly fund updates. The market index must be a ‘broad-based securities market index’ that is ‘appropriate in terms of assessing movements in the market in relation to the returns from the assets in which the specified fund directly or indirectly invests’.

The FMA has acknowledged that the market index requirement creates challenges for certain types of funds, and is proposing an exemption to allow managers unable to find a compliant market index to provide another form of benchmark (a peer group) as an alternative.

The FMA is seeking feedback on this proposal (and views on the operation of the market index requirement in general) through a consultation paper released earlier this month. Submissions close on 1 September 2017.

A copy of the consultation paper is available here.

http://www.legislation.govt.nz/regulation/public/2017/0211/latest/DLM7384301.html#DLM7384339http://www.legislation.govt.nz/regulation/public/2017/0211/latest/DLM7384301.html#DLM7384339http://www.legislation.govt.nz/regulation/public/2017/0139/latest/DLM7297314.htmlhttp://www.legislation.govt.nz/regulation/public/2017/0139/latest/DLM7297314.htmlhttp://www.legislation.govt.nz/regulation/public/2017/0210/latest/DLM7379701.html#DLM7379724http://www.legislation.govt.nz/regulation/public/2017/0210/latest/DLM7379701.html#DLM7379724https://fma.govt.nz/compliance/consultation/consultation-papers/proposed-exemption-from-the-market-index-requirement/


In the courts

Penalty imposed and appeals dropped in the FMA v Warminger case In our May issue of Corporate Reporter (here) we noted that Mr Mark Warminger was appealing the High Court’s March 2017 judgment3 which established his liability for two of the ten sets of trades that the Financial Markets Authority (FMA) had alleged were in breach of the market manipulation provisions in the Securities Market Act 1988 (SMA). Mr Warminger has since withdrawn his appeal. The FMA has also withdrawn its cross-appeal and has confirmed that legal proceedings in relation to the matter have been completed.

In the interim, the High Court’s decision regarding the pecuniary penalty hearing for Mr Warminger’s two contraventions was handed down in June 20174. The High Court imposed a total penalty of NZ$400,000 on Mr Warminger. Venning J reached this amount by establishing the maximum amount of the penalty for both contraventions under the SMA (being NZ$3,845,900), then finding that, having regard to the relevant statutory criteria, a starting point for the two contraventions was a penalty of NZ$500,000 (although the FMA had contended it should be NZ$1,600,000) followed by appropriate deductions for Mr Warminger’s personal circumstances (for which Venning J supported a meaningful reduction in the penalty of NZ$100,000).

Venning J accepted that there was no particular material financial gain of any significance to Mr Warminger or to the funds under his operation from his contravening conduct. However, there were personal gains from Mr Warminger’s point of view, to the extent that he personally came out ahead as a consequence of the deals. Further, Venning J was of the view that it is inevitable that findings of market manipulation will have an adverse effect on confidence in the New Zealand market both domestically and internationally.

In addition to the pecuniary penalty, Mr Warminger is also subject to an automatic five year management ban under the SMA for the two contraventions.

A copy of the penalty decision is available here.

Financial Markets Authority (FMA)

New FMA guidance on non-GAAP financial information Following a consultation earlier in the year, the FMA has updated the market of its expectations of issuers when disclosing non-GAAP financial information.

The updated guidance largely reflects the policy directions signalled by the FMA in its March 2017 consultation paper. However, the accompanying Q&A provides some useful clarifications and practical examples. The updated Guidance Note (which replaces the FMA's 2012 Guidance Note) is available here and the associated Q&A is available here.

For further commentary on the new guidance see our earlier client update: Non-GAAP financial information - how prominent is too prominent?

3 Financial Markets Authority v Warminger [2017] NZHC 327 4 Financial Markets Authority v Warminger [2017] NZHC 1471

https://www.bellgully.com/Shared%20Documents/Corporate-Reporter-Issue-No-45.pdfhttps://fma.govt.nz/assets/Decisions/170630-Judgment-CIV2015-404-1727.pdfhttps://fma.govt.nz/assets/Consultations/170306-Consultation-paper-Disclosing-non-GAAP-financial-information.pdfhttps://fma.govt.nz/assets/Consultations/170306-Consultation-paper-Disclosing-non-GAAP-financial-information.pdfhttps://fma.govt.nz/compliance/guidance-library/financial-reporting-2/disclosing-non-gaap-financial-information/https://fma.govt.nz/compliance/financial-reporting/faqshttps://www.bellgully.com/publications/non-gaap-financial-information-how-prominent-is-too-prominenthttps://www.bellgully.com/publications/non-gaap-financial-information-how-prominent-is-too-prominent


Financial Markets Conduct (KiwiSaver Confirmation Information) Methodology Notice 2017 The FMA has issued a methodology notice that prescribes the method that KiwiSaver scheme providers must use to calculate the total fees that each individual investor has been charged, if they cannot calculate the actual fees. These fees must be disclosed in annual statements to investors at the end of each accounting period from next year. A copy of the notice is available here.

To avoid the methodology being potentially retrospective in its application, the notice only applies to accounting periods of a KiwiSaver scheme commencing on and after the notice came into force on 28 July 2017.

The FMA has also updated its May 2016 “Guidance Note Fee Disclosure for Managed Funds” to include guidance on this methodology. The July 2017 version is available here.

Relief provided for managers of schemes, unit trusts and funds being wound up The FMA has granted exemptions from the ongoing disclosure requirements of the Financial Markets Conduct Act 2013 (FMC Act) for certain superannuation schemes, unit trusts and group investment funds that issued managed investment products under the Securities Act 1978 regime. The exemptions apply where before the end of the FMC Act transition period (on 30 November 2016), a resolution was passed to wind up the scheme, trust or fund and the process of giving effect to the resolution was underway. See:

• the Financial Markets Conduct (Unit Trusts and Group Investment Funds Being Wound up—Securities Allotted under Securities Act 1978) Exemption Notice 2017 here; and

• Financial Markets Conduct (Superannuation Schemes and Workplace Savings Schemes Being Wound up—Securities Allotted under Securities Act 1978) Exemption Notice 2017 here.

The exemptions are subject to certain conditions, including that the manager of a scheme, trust or fund to which the exemption applies remains subject to general duties in the FMC Act that apply in the exercise of their functions.

NZX Limited (NZX)

Gender diversity statistics for NZX Main Board companies released NZX has released gender diversity statistics relating to issuers listed on the NZX Main Board for the 12 month period ending 30 June 2017.

The report shows that there has been little change in both the percentage of women directors and women senior management officers from the 2015/16 figures.

This latest NZX Diversity Report marks a change in the way NZX has previously reported diversity statistics, following industry feedback that the NZX’s quarterly reports were not presenting enough meaningful information to the market. NZX will now release diversity statistics on a six month frequency and the reporting period has been extended to cover 12 months to present a fuller picture. The report also reflects changes to reporting requirements that will be introduced as part of changes to the NZX Corporate Governance Code relating to

https://fma.govt.nz/assets/Consultations/_versions/9672/FMC-KiwiSaver-Confirmation-Information-Methodology-Notice-2017.1.pdfhttps://fma.govt.nz/assets/Guidance/_versions/8886/160526-Guidance-Note-Fee-Disclosure-For-Managed-Funds.2.pdfhttp://www.legislation.govt.nz/regulation/public/2017/0160/latest/DLM7339946.html?search=ad_regulation__Financial+Markets+Conduct+(Unit+Trusts+and+Group+Investment+Funds+Being+Wound+up%e2%80%94Securities+Allotted+under+Securities+Act+1978)+Exemption+Notice+2017____25_an%40bn%40rc%40dn%40apub%40aloc%40apri%40apro%40aimp%40bgov%40bloc%40bpri%40bmem%40rpub%40rimp_rc%40ainf%40anif%40bcur%40rinf%40rnif_a_aw_se&p=1#d56e24http://www.legislation.govt.nz/regulation/public/2017/0161/latest/DLM7339159.html?search=ad_regulation__Financial+Markets+Conduct+(Superannuation+Schemes+and+Workplace+Savings+Schemes+Being+Wound+up%e2%80%94Securities+Allotted+under+Securities+Act+1978)+Exemption+Notice+2017____25_an%40bn%40rc%40dn%40apub%40aloc%40apri%40apro%40aimp%40bgov%40bloc%40bpri%40bmem%40rpub%40rimp_rc%40ainf%40anif%40bcur%40rinf%40rnif_a_aw_se&p=1#d56e24


diversity policies and disclosures, which come into effect for reporting periods ending 31 December 2017. As such this report includes summaries relating to:

• NZX Main Board listed issuers which reported having a diversity policy,

• directors and officers listed on the NZX Main Board,

• the diversity of directors and officers listed on the S&P/NZX 50,

• directors and officers by market capitalisation, and

• directors and officers by sector.

A copy of the latest report is available here. Previous reports are also available to view on NZX’s website here.

NZX Regulation clarifies use of default proxy mechanisms Under the NZX’s listing rules for its Main Board, Debt, NZAX and NXT markets, proxy forms (which must be sent with the notice of meeting of security holders) may not be sent with the name of a person or office filled in as proxy holder. However, NZX Regulation (NZXR) has confirmed that issuers who wish to provide a default proxy mechanism may provide in their proxy forms (subject to certain conditions) that:

“a. if, in appointing a proxy, a shareholder completes the proxy form in full but does not name a person as their proxy; or

b. a shareholder’s named proxy does not attend the meeting,

a named person or office will act as that shareholder’s proxy and vote in accordance with their express direction”.

One of the conditions is that where issuers use this default proxy mechanism they must provide clear and prominent disclosure of that intention to shareholders and to the market in both the notice of meeting and proxy form related to that meeting.

For further details of NZXR’s decision and the conditions see the full ruling here.

New round of NZX practice notes released NZX Regulation has published a further round of practice notes since the last issue of Corporate Reporter, taking the total to 17 since the beginning of this year.

These practice notes sit alongside NZX’s existing guidance notes, and provide practical guidance on various aspects of NZXs listing rules. The latest practice notes include guidance on:

• applications for quotation,

• conversions of securities,

• delisting applications,

• how to manage disclosure obligations in different contexts, and

https://nzx.com/files/static/cms-documents/NZX%20Diversity%20Statistics%20July%202017_FINAL%20for%20MAP.pdfhttps://www.nzx.com/regulation/diversity_statisticshttps://nzx.com/files/static/cms-documents/Ruling%20on%20NZX%20Main%20Board-Debt%20Market%20Listing%20Rule%206.2.6(b),%20NZAX%20Listing%20Rule%206.2.5(b)%20&%20NXT%20Market%20Listing%20Rule%2065.pdf


• accelerated entitlement offers.

Practice note 07/2017, addressing ‘notices of meetings’, has also been updated.

All of NZX’s practice notes are available here.

NZX to review its equity markets and listing rules NZX has announced that it will commence a formal consultation process on its equity market structure and a review of its Main Board Listing Rules at the end of September 2017. This will include discussion on the consolidation of NZX’s equity markets (NZX Main Board, NZAX and NXT) into a single board, in response to market feedback that the present structure is not effectively meeting the needs of New Zealand’s smallest listed companies.

In the context of this review, NZX Regulation is proposing to issue two class waivers to clarify the process for existing NZAX or NXT companies who wish to migrate to the NZX Main Board, and how various parts of the rules will apply to smaller issuers (market capitalisation of NZ$100 million or less) applying to list, before the consultation process is completed. NZX is now seeking feedback in relation to the proposed class waivers and practice note. To view copies of the consultation paper and accompanying documents click on the following links: • Consultation Paper, • Draft waiver for migrating issuers, • Draft waiver for new issuers, • Draft practice note.

The consultation closes on 22 August 2017.

COMMERCIAL


Reminder that the Contract and Commercial Law Act 2017 is in force on 1 September As noted in the previous issue of the Corporate Reporter, the Contract and Commercial Law Act 2017 (CCL Act) comes into force on 1 September 2017, and will modernise 11 New Zealand statutes relating to contracts, the sale of goods, electronic transactions, the carriage of goods, and various other commercial matters, including mercantile agents and bills of lading.

From 1 September 2017, where applicable, new contracts should incorporate the changes introduced under the the CCL Act. This includes replacing references to statutes repealed under the CCL Act with the new reference in the CCL Act. The most common changes are likely to be the following:

Repealed Act New Reference

Contracts (Privity) Act 1982 Contract and Commercial Law Act 2017, Part 2, Subpart 1

Electronic Transactions Act 2002 Contract and Commercial Law Act 2017, Part 4, Subpart 1

Carriage of Goods Act 1979 Contract and Commercial Law Act 2017, Part 5, Subpart 1

https://www.nzx.com/regulation/practice-noteshttps://nzx.com/files/static/cms-documents/Consultation%20document%20-%20Rulings%20and%20waivers%20for%20NXT%20and%20NZAX%20migration%20(final)%20-%209%20August%202017.pdfhttps://nzx.com/files/static/cms-documents/Dated_Draft_Class_waiver_migration_NZXR_MASTER%20-%20(appendix%201)%20for%20feedback%20-%208%20Aug.pdfhttps://nzx.com/files/static/cms-documents/Dated_Draft_Class_waiver_new%20applicant_NZXR_MASTER%20-%20(appendix%202)%20for%20feedback%20-%208%20Aug.pdfhttps://nzx.com/files/static/cms-documents/Practice%20Note%20-%20Main%20Board%20Migration%20-%20(appendix%203)%20for%20consultation%20feedback%20-%208%20Aug.pdfhttp://www.legislation.govt.nz/act/public/2017/0005/latest/DLM6844033.html?src=qs


For further guidance on the CCL Act see Bell Gully's Guide to the Contract and Commercial Law Act 2017.

The Contract and Commercial Law (Electronic Transactions) Regulations 2017 also come into force on 1 September 2017. These regulations are an adjunct to the electronic transaction provisions in Part 4 of the CCL Act and they continue the requirements that are in place under the Electronic Transactions Regulations 2003, which will be revoked on the same date. The regulations include provisions which set out conditions that must be complied with if certain steps are taken electronically (such as making disclosure or giving written notice) under specified legislation.

Bill to update the law governing trusts introduced Earlier this month the Government introduced the Trusts Bill which will replace the out-dated Trustee Act 1956 and the Perpetuities Act 1964, and update the general law governing trusts in New Zealand. A copy of the Bill is available here.

According to a press release by Justice Minister Amy Adams, some of the key changes include:

• mandatory and default trustee duties (based on established legal principles) to help trustees understand their obligations,

• requirements for managing trust information and disclosing it to beneficiaries (where appropriate), so they are aware of their position,

• flexible trustee powers, allowing trustees to manage and invest trust property in the most appropriate way, • provisions to support cost-effective establishment and administration of trusts (such as clear rules on the

variation and termination of trusts), and • more options for removing and appointing trustees without having to go to court.

The Bill will apply to all legacy express trusts, subject to an 18-month transition period from the date of commencement.

While the provisions of the Bill are clearly tailored to family trusts, the Bill’s application extends to all express trusts, including trading trusts, commercial trusts and security trusts, as well as retail and wholesale investment funds, securitisation trusts, bond trusts and other trusts used in capital markets transactions. Any court will also be able to deem the new statute to apply to any non-express trust - including resulting trusts or constructive trusts – where "necessary or appropriate".

Limited exceptions apply for 'specified commercial trusts' (see our earlier article here). In addition, certain provisions of the Bill, such as the default duties, can be expressly modified or excluded by the trust instrument. Accordingly, financial markets participants will want to investigate whether appropriate amendments are required - and whether they are permitted - to existing trust deeds, and will need to factor the reforms into any proposed new transactions.

The Bill was developed in response to the Law Commission’s 2013 report Review of the Law of Trusts: A Trusts Act for New Zealand, and is largely based on 48 of the Commission’s 51 recommendations set out in that report. An exposure draft of the bill was consulted on at the end of last year, and a number of improvements have been made as a result of the submissions on the draft bill.

Although the Bill will officially lapse on 22 August when the House is dissolved for the general election, it is expected to be reinstated by the new House regardless of which parties form the government. After the Bill has been reinstated and read for the first time, public consultation on the Bill will be available during the select committee process.

https://www.bellgully.com/Shared%20Documents/Contract-and-Commercial-Law-Act-2017.pdfhttp://www.legislation.govt.nz/regulation/public/2017/0216/latest/whole.html?search=ts_act%40bill%40regulation%40deemedreg_Contract+and+Commercial+Law+(Electronic+Transactions)+Regulations+2017_resel_25_a&p=1#DLM7393903http://www.legislation.govt.nz/bill/government/2017/0290/latest/DLM7382815.htmlhttps://www.beehive.govt.nz/release/bill-update-new-zealand-trust-law-introducedhttps://www.bellgully.com/publications/trusts-bill-will-impact-on-financial-markets-structureshttp://www.lawcom.govt.nz/sites/default/files/projectAvailableFormats/NZLC%20R130.pdfhttp://www.lawcom.govt.nz/sites/default/files/projectAvailableFormats/NZLC%20R130.pdfhttps://consultations.justice.govt.nz/policy/trusts-bill-exposure-draft/


Phase II of the AML/CFT Act regime in place The Anti-Money Laundering and Countering Financing of Terrorism Amendment Act 2017 (the Amendment Act) was enacted on 10 August 2017. This extends the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the AML/CFT Act) regime to the Phase II sectors and makes a number of amendments that will also apply to existing Phase I reporting entities.

The Amendment Act provides that the AML/CFT Act will apply to the Phase II sectors as follows:

• lawyers and conveyancers on 1 July 2018,

• accountants on 1 October 2018,

• real estate agents on 1 January 2019, and

• the New Zealand Racing Board and high-value dealers (such as those trading in cars, boats, jewellery, bullion, art and antiquities) on 1 August 2019,

although there is scope for the Government to bring those dates forward through an Order in Council.

Trust and company service providers are also subject to the AML/CFT Act on 1 July 2018, if they are not already a reporting entity under regulation 17 of the Anti-Money Laundering and Countering Financing of Terrorism (Definitions) Regulations 2011.

The Financial Transactions Reporting Act 1996 will cease to apply to the relevant Phase II reporting entity at the time they come under the AML/CFT regime, and the Act will be repealed on 1 August 2019.

The amendments that will also affect Phase I reporting entities include:

• expanding the current suspicious transaction reporting requirement to include ‘suspicious activities’ in line with one of the recommendations of the recent Government Inquiry into Foreign Trust Disclosure Rules by John Shewan,

• changes to the identity and verification requirements for customer due diligence (CDD), and

• modifications to the class of customers that apply for each type of CDD,

as well as several other changes which will reduce compliance costs for reporting entities.

Emission Trading Scheme proposals for 2020 and beyond The Government has completed the second phase of a two-part review of the New Zealand Emissions Trading Scheme (NZ ETS) and has made in-principle decisions on a package of four proposals to improve the operation of the scheme.

The NZ ETS is the Government’s principal policy response to climate change. It puts a price on greenhouse gas emissions from all sectors of the New Zealand economy, except biological emissions from agriculture. Since the NZ ETS came into effect in 2008, several adjustments have been made to its operation. This includes extending the transitional phase under which measures were put in place that:

• allow non-forestry participants to surrender only one emission unit for every two tonnes of emissions (although this is now being phased out across relevant sectors following decisions made after the first phase of the review),

http://www.legislation.govt.nz/act/public/2017/0035/latest/DLM7161207.htmlhttp://www.treasury.govt.nz/publications/reviews-consultation/foreign-trust-disclosure-rules/pdfs/report-giftdr-27jun2016.pdf


• provide participants with the option to buy New Zealand Units (NZUs) from the Government for a fixed price of NZ$25, limiting the potential costs faced by emitters,

• indefinitely delay the introduction of surrender obligations for the agriculture sector, and

• indefinitely delay reductions in the level of free allocation of NZUs to protect the competitiveness of businesses involved in emissions-intensive and trade-exposed activities.

The NZ ETS also moved to being a domestic-only scheme in June 2015.

The latest in-principle decisions will require further work and consultation over the next 12 to 18 months before they are implemented, so there will not be immediate changes to how the NZ ETS operates.

In brief, the proposals arising from the latest review are to:

• introduce auctioning of units to align the NZ ETS to the Government’s climate change targets,

• limit participants’ use of international units when the NZ ETS reopens to international carbon markets,

• develop a different price ceiling to eventually replace the current NZ$25 fixed price option, and

• co-ordinate decisions on the supply settings in the NZ ETS over a rolling five-year period.

For Bell Gully commentary on these proposals, see our earlier client update: 2020 a key year for the Emissions Trading Scheme.

Further information is available at: www.mfe.govt.nz/nzets/2015-16-review-outcomes and in the Climate Change Minister’s press release which includes a Q&A section here.

COMPANY LAW

Recent developments

Revised fees for Companies Office registrations The Companies Act 1993 Amendment Regulations 2017, which came into force on 1 July 2017, have amended the Companies Act 1993 Regulations 1994 to adjust certain fees payable to the Registrar of Companies. The adjusted fees include: • the fee for an application to register a company (reduced from NZ$130 to NZ$103.50), and • the fee for registration of documents to effect an amalgamation (increased from NZ$300 to NZ$402.50).

The regulations also replace the NZ$25 fee for registration of an annual return with a fee of NZ$20.70 for users of a Government to Business (G2B) service and NZ$24.15 in all other cases.

The principal regulations have also been amended to ensure that there are no additional fees payable where a company registers its financial statements, group financial statements, and auditor’s reports under section 207E of the Companies Act and has already paid a fee to the Registrar of Financial Service Providers under regulation 9 of the Financial Markets Conduct (Fees) Regulations 2014 for registration of those statements and reports under section 461H of the Financial Markets Conduct Act 2013.

https://www.bellgully.com/publications/2020-a-key-year-for-the-emissions-trading-schemehttps://www.bellgully.com/publications/2020-a-key-year-for-the-emissions-trading-schemehttp://www.mfe.govt.nz/nzets/2015-16-review-outcomeshttps://www.beehive.govt.nz/release/new-tools-help-meet-climate-change-targetshttp://www.legislation.govt.nz/regulation/public/2017/0140/latest/DLM7297513.html#d56e30


Data Futures Partnership releases Guidelines for Trusted Data Use The Data Futures Partnership has released ‘A Path to Social Licence: Guidelines for Trusted Data Use’ to help organisations build trust around their data use. A copy of the guidelines is available here.

The guidelines are intended to assist lawful data use and do not affect existing legal requirements. However, a key focus of the guidelines is transparency of data use. Transparency has been a core theme of recent updates to consumer law and we expect it to be a guiding principle of upcoming changes to the Privacy Act.

The guidelines list the eight questions that the Data Futures Partnership concluded matter most to New Zealanders, with guidance on how to answer those questions in a manner that is best suited to building trust.

The Data Futures Partnership is an independent ministerial advisory group created to “drive trusted data use and strengthen New Zealand's data ecosystem”. The partnership will work with organisations to test and refine the guidelines over the next three months.

If you have any questions about the guidelines or upcoming reform to the Privacy Act, please contact your usual Bell Gully adviser or our privacy and data protection team.

In the courts

Supreme Court widens concept of ‘due debts’ in voidable transactions The Supreme Court has ruled in David Browne Contractors v Petterson that a disputed claim against a company for damages may be a ‘due debt’ for the purposes of section 292(2)(a) of the Companies Act 1993, if a reasonable and prudent business person would be satisfied that there is sufficient certainty that such a claim would become a legally due debt at a temporally proximate point.

Under section 292, a transaction is deemed to be an insolvent transaction, and therefore voidable, if, among other things, it is entered into at a time when a company is unable to pay its due debts.

Click here for a full summary of the case and its implications.

COMPETITION AND CONSUMER LAW


Passing of Cartels Bill marks new era in New Zealand competition law After almost six years before Parliament, the Commerce (Cartels and Other Matters) Amendment Act 2017 has finally been enacted.

The Act was first introduced into the House in October 2011 with the primary aim of criminalising cartel conduct. While criminalisation has been removed, the amendments make significant changes to New Zealand's competition law.

The primary change is the new prohibition on "cartel provisions", which replaces the pre-existing "per se" prohibition on price-fixing. The new definition of "cartel provisions" expressly catches price fixing, "market

http://datafutures.co.nz/https://trusteddata.co.nz/wp-content/uploads/2017/08/Summary-Guidelines.pdfhttps://www.bellgully.com/expertise/privacy-and-data-protectionhttps://www.courtsofnz.govt.nz/cases/david-browne-contractors-limited-and-david-browne-mechanical-limited-v-david-ross-petterson-as-liquidator-of-polyethylene-pipe-systems-limited-in-liquidation/@@images/fileDecisionhttps://www.bellgully.com/publications/supreme-court-widens-concept-of-due-debts-in-voidable-transactionshttp://www.legislation.govt.nz/act/public/2017/0040/latest/DLM4090009.html


allocation" and "output restriction" arrangements between competitors. While the broader express prohibition will require businesses to take extra precautions, the amendments also contain much improved exemptions to ensure that the prohibitions do not catch pro-competitive conduct. The new exemption for collaborative activities that replaces the current joint venture defence is, in particular, a welcome improvement.

Other key changes include:

• Shipping: a new regime covering the international shipping industry, which was previously exempt from the Commerce Act sections dealing with anti-competitive arrangements between competitors,

• Enforcement powers: new powers for the High Court, on application by the Commerce Commission, to make orders against New Zealand companies including an order to cease trading or divest shares or assets. These particular orders can only be made where an overseas entity has acquired a controlling interest in the New Zealand entity and that acquisition is likely to substantially lessen competition in a market, and

• Cartel provision clearance regime: introduction of a clearance regime (much like the existing merger clearance regime) for entities considering entering into arrangements which include cartel provisions. If the Commerce Commission grants clearance, this provides certainty to the entities involved that the arrangements benefit from the collaborative activities exemption and do not substantially lessen competition in the market.

The amendments include a nine month transition period to allow businesses to ensure that their existing arrangements are compliant with the new cartel prohibition, although this will not apply to arrangements that would have breached the pre-existing provisions, or to new arrangements entered into following the amendments passing.

These new rules govern agreements between potential, as well as actual competitors, which can in some instances include customers and suppliers. Accordingly, even common arrangements, such as territorial allocations in distribution agreements, have the potential to raise issues under the new prohibitions. Most arrangements with customers and suppliers, if properly structured, should fall within the new exemptions. Nevertheless, businesses should take advantage of the nine month grace period to carefully review any such arrangements and ensure compliance with the new laws.

Government releases ‘Promoting Competition’ paper The Government has outlined new measures to promote a more competitive economy in its recent Business Growth Agenda Paper, Promoting Competition.

The paper sets out three broad areas of focus:

• maintaining the effectiveness of New Zealand’s competition laws and institutions, which includes the recent proposal that the Commerce Commission be given market studies powers (click here for details),

• identifying barriers to competition, and opportunities to promote competition, in specific sectors and across the economy, and

• actively seeking open trade and investment policies which can mitigate the disadvantages of New Zealand’s small size and distance from major markets.

http://www.mbie.govt.nz/info-services/business/business-growth-agenda/pdf-and-image-library/2017-documents/promoting-competition.pdfhttps://www.bellgully.com/publications/government-announces-proposed-changes-to-the-commerce-act


New Zealand Commerce Commission (NZCC)

Media releases The NZCC has issued the following media releases:

NZCC reports and publications

Commission releases 2017/18 priorities Last year, the NZCC released its new organisational strategy and as part of that made the commitment to publish its priorities annually. The first of the NZCC’s annual priority focus areas has been released for the 2017/18 year. Click here for more

Industry regulation and regulatory control

Vector to return NZ$13.9m to Auckland electricity consumers under settlement with the NZCC Electricity lines company Vector will return NZ$13.9 million to Auckland electricity consumers after it accepted it had breached its regulated price path by recovering more revenue than it was entitled to in the 2014 and 2015 financial years. Vector’s repayment takes the form of holding residential prices flat over two years starting in April 2018, which has the effect of consumers paying less and Vector earning less revenue than would be allowed under its price path. Click here for more

Draft report on review of Fonterra’s 2016/17 base milk price calculation The NZCC has released its draft report on Fonterra’s base milk price calculation for the 2016/17 dairy season, as required under the milk price monitoring regime in the Dairy Industry Restructuring Act. The base milk price is the price Fonterra pays farmers for raw milk, which is set at $6.15 per kilogram of milk solids for the 2016/17 season just ended. Click here for more

Mergers and acquisitions

Commission declines Vero Insurance clearance to acquire Tower The NZCC has declined to grant clearance to Vero Insurance New Zealand Limited to acquire up to 100% of the shares in Tower Limited. Click here for more

Trade Me seeks clearance to acquire Motorcentral The NZCC has received a clearance application from Trade Me Limited (Trade Me) to acquire up to 100% of the shares in Limelight Software Limited, trading as Motorcentral. Trade Me is an online marketplace and classified advertising platform based in New Zealand. Motorcentral supplies software and websites to motor vehicle dealers. Click here for more The NZCC’s Statement of Preliminary Issues relating to the application is available here.

Essilor and Luxottica seek clearance for global merger The NZCC has received a clearance application from Essilor International (Compagnie Générale d’Optique) S.A. and Luxottica Group S.p.A relating to the global merger of the two parties. The proposed merger brings together a supplier of prescription lenses (Essilor) with a supplier of prescription frames and sunglasses (Luxottica). Click here for more The NZCC’s Statement of Preliminary Issues relating to the application is available here.

http://www.comcom.govt.nz/the-commission/media-centre/media-releases/detail/2017/commission-releases-201718-prioritieshttp://www.comcom.govt.nz/the-commission/media-centre/media-releases/detail/2017/vector-to-return-13.9m-to-auckland-electricity-consumers-under-settlement-with-commerce-commissionhttp://www.comcom.govt.nz/the-commission/media-centre/media-releases/detail/2017/draft-report-on-review-of-fonterras-201617-base-milk-price-calculation-media-releasehttp://www.comcom.govt.nz/the-commission/media-centre/media-releases/detail/2017/commission-declines-vero-insurance-clearance-to-acquire-tower-http://www.comcom.govt.nz/the-commission/media-centre/media-releases/detail/2017/trade-me-seeks-clearance-to-acquire-motorcentralhttp://www.comcom.govt.nz/the-commission/media-centre/media-releases/detail/2017/statement-of-preliminary-issues-released-for-trade-me-limited-limelight-software-limited-http://www.comcom.govt.nz/the-commission/media-centre/media-releases/detail/2017/essilor-and-luxottica-seek-clearance-for-global-mergerhttp://www.comcom.govt.nz/the-commission/media-centre/media-releases/detail/2017/statement-of-preliminary-issues-released-for-essilorluxottica


HealthCare NZ seeks clearance to acquire Geneva Healthcare Group The NZCC has received a clearance application from Healthcare of New Zealand Holdings Limited to acquire 100% of the shares in Geneva Healthcare Limited and its related companies: Geneva Clean Limited, My Skill Limited, Geneva Health Technology Limited and Geneva Care Limited (Geneva Healthcare Group). Click here for more The NZCC’s Statement of Preliminary Issues relating to the application is available here.

Tronox seeks clearance to acquire the titanium dioxide pigment business of Cristal The NZCC has received a clearance application from Tronox Limited (a public limited company incorporated in Australia) to acquire the titanium dioxide (TiO2) pigment business of National Titanium Dioxide Company Ltd (Cristal) (an international chemical company incorporated in Saudi Arabia). Both parties are suppliers of TiO2 pigment to New Zealand customers. Click here for more The NZCC’s Statement of Preliminary Issues relating to the application is available here.

Market behaviour

Hamilton real estate agency fined more than NZ$1 million for price fixing Hamilton real estate agency Online Realty Limited has been ordered to pay a penalty of NZ$1.05 million for its part in a national anti-competitive price fixing case. Click here for more

Consumer issues

NZCC issues warnings to GSK and AFT over Voltaren, Panadol and Maxiclear The NZCC has warned Glaxosmithkline Consumer Healthcare New Zealand Limited (GSK) and AFT Pharmaceuticals Limited (AFT) that the companies’ product packaging and marketing representations for some Voltaren, Panadol and Maxiclear products were likely to have breached the Fair Trading Act. Click here for more

Four telcos warned by the NZCC The NZCC has sent warning letters to four telecommunication companies about specific conduct that the Commission considers breached the Fair Trading Act. Click here for more

The NZCC issues credit fee guidelines The NZCC has released its Consumer Credit Fees Guidelines, to provide guidance for lenders in setting credit fees. The guidelines describe the NZCC’s view on how lenders should approach setting their fees in order to comply with the Credit Contracts and Consumer Finance Act 2003, which requires credit fees charged by lenders to be reasonable. Click here for more

Truck shop sentenced for “incomprehensible” contracts Auckland truck shop Zee Shop Limited (Zee Shop) has been fined NZ$108,000 for providing contracts which included “incomprehensible” clauses. Zee Shop pleaded guilty to seven charges under the Credit Contracts and Consumer Finance Act 2003, for failing to disclose key information and failing to express key information clearly and concisely. Click here for more

Fines reach nearly $900,000 in Commission mobile trader prosecutions Two mobile traders have been fined a total of more than NZ$183,000 and been ordered to return nearly NZ$71,000 in fees to their customers. The sentences bring to just under NZ$882,000 the total fines imposed by the courts so far in the NZCC’s prosecutions against mobile traders since the release of the Commission’s Mobile Trader 2014/15 report. Click here for more

http://www.comcom.govt.nz/the-commission/media-centre/media-releases/detail/2017/healthcare-nz-seeks-clearance-to-acquire-geneva-healthcare-grouphttp://www.comcom.govt.nz/the-commission/media-centre/media-releases/detail/2017/statement-of-preliminary-issues-released-for-healthcare-nzgeneva-healthcare-grouphttp://www.comcom.govt.nz/the-commission/media-centre/media-releases/detail/2017/tronox-seeks-clearance-to-acquire-the-titanium-dioxide-pigment-business-of-cristalhttp://www.comcom.govt.nz/the-commission/media-centre/media-releases/detail/2017/statement-of-preliminary-issues-released-for-tronoxcristal-mergerhttp://www.comcom.govt.nz/the-commission/media-centre/media-releases/detail/2017/hamilton-real-estate-agency-fined-more-than-1-million-for-price-fixinghttp://www.comcom.govt.nz/the-commission/media-centre/media-releases/detail/2017/commission-issues-warnings-to-gsk-and-aft-over-voltaren-panadol-and-maxiclearhttp://www.comcom.govt.nz/the-commission/media-centre/media-releases/detail/2017/four-telcos-warned-by-commissionhttp://www.comcom.govt.nz/the-commission/media-centre/media-releases/detail/2017/commission-issues-credit-fee-guidelineshttp://www.comcom.govt.nz/the-commission/media-centre/media-releases/detail/2017/truck-shop-sentenced-for-incomprehensible-contractshttp://www.comcom.govt.nz/the-commission/media-centre/media-releases/detail/2017/fines-reach-nearly-900000-in-commission-mobile-trader-prosecutions


Australian Competition and Consumer Commission (ACCC)

Selected ACCC media releases The ACCC has issued the following media releases:

Mergers and acquisitions

ACCC grants authorisation to Virgin Australia's mainland China and Hong Kong airline alliance The ACCC has granted authorisation to coordinate airline services (such as code-sharing, frequent flyer program participation, lounge access, route planning, and scheduling) for five years to Virgin Australia Airlines, the HNA Aviation Group, Hong Kong Airlines and Hong Kong Express Airways. The Alliance Framework Agreement may see additional airline services operate between Australia and mainland China, and Australia and Hong Kong. Since the ACCC granted interim authorisation in March, Virgin has commenced services between Australia and Hong Kong. Virgin also expects to launch services between Australia and mainland China. Click here for more

ACCC appeals Tribunal decision in Tabcorp-Tatts merger The ACCC has applied to the Federal Court for judicial review of the Australian Competition Tribunal’s decision to grant authorisation for Tabcorp Holdings Limited to acquire Tatts Group Limited. The ACCC is alleging the Tribunal made three reviewable errors. “We are seeking judicial review because we believe these legal principles are fundamental not only to the Tabcorp decision but to all future merger and non-merger authorisation assessments,” said ACCC Chairman Rod Sims. Click here for more

Market behaviour

NYK convicted of criminal cartel conduct and fined A$25 million The Federal Court has convicted Japanese shipping company Nippon Yusen Kabushiki Kaisha (NYK) of criminal cartel conduct and ordered it to pay a fine of A$25 million: the second-highest imposed in ACCC history. The judgment also marks the first successful prosecution under the criminal cartel provisions of the Competition and Consumer Act 2010. Click here for more

Consumer issues

Egg producer penalised A$750,000 for misleading 'free range' claims The Federal Court has ordered Snowdale Holdings Pty Ltd to pay penalties totalling A$750,000 for making false or misleading representations that its eggs were ‘free range’, in proceedings brought by the ACCC. This is the highest penalty that a Court has ordered in relation to misleading ‘free range’ egg claims. Click here for more

ACCC takes action against Ford The ACCC has instituted proceedings against Ford Motor Company of Australia Limited (Ford) alleging that it engaged in unconscionable and misleading or deceptive conduct, and made false or misleading representations in its response to customer complaints. The customer complaints were about Ford’s Focus, Fiesta and EcoSport vehicles supplied in Australia between 2011 and 2016, which featured a type of transmission known as PowerShift Transmission. Click here for more

https://www.accc.gov.au/media-release/accc-grants-authorisation-to-virgin-australias-mainland-china-and-hong-kong-airline-alliancehttps://www.accc.gov.au/media-release/accc-appeals-tribunal-decision-in-tabcorp-tatts-mergerhttps://www.accc.gov.au/media-release/nyk-convicted-of-criminal-cartel-conduct-and-fined-25-millionhttps://www.accc.gov.au/media-release/egg-producer-penalised-750000-for-misleading-free-range-claimshttps://www.accc.gov.au/media-release/accc-takes-action-against-ford


AUCKLAND

VERO CENTRE, 48 SHORTLAND STREET PO BOX 4199, AUCKLAND 1140, NEW ZEALAND DX CP20509 TEL +64 9 916 880 FAX +64 9 916 8801

WELLINGTON

171 FEATHERSTON STREET PO BOX 1291, WELLINGTON 6140, NEW ZEALAND DX SX11164 TEL +64 9 916 880 FAX +64 9 916 8801

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