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FMA highlights issues for KiwiSaver offer documents
FMA has recently released a report which highlights potential compliance issues for KiwiSaver offer documents in
relation to current market practices. Particular reference is made to the changes that will need to be made to
these documents in light of FMA’s Effective Disclosure Guidance Note issued in June 2012 (which only applied to
offer documents issued by continuous issuers after 1 January 2013) and the new KiwiSaver (Periodic Disclosure)
Regulations 2013.
Consistency between periodic disclosure statements and offer documents necessary
FMA points out that the new periodic disclosure statements required by the KiwiSaver (Periodic Disclosure)
Regulations are “advertisements” for the purposes of the Securities Act 1978 and, therefore, must be consistent
with the KiwiSaver scheme’s investment statement and prospectus. FMA notes that given the highly prescriptive
nature of the periodic disclosure statements, it is likely that for consistency purposes it will be the investment
statement and the prospectus that will need to be aligned with the periodic disclosure statement. FMA has
highlighted in the report some instances where it considers the additional disclosures required in the periodic
disclosure statements may be inconsistent with current disclosures in offer documents. These include instances
relating to the disclosure of investment returns, risk disclosures, disclosures of key personnel, and disclosure of
performance and fund fees.
Trustee statements in prospectuses
FMA also notes that it is concerned with trustee statements in a number of KiwiSaver schemes. Trustees of nonrestricted
KiwiSaver schemes are required to make a statement in the scheme’s prospectus confirming whether
or not in the trustee’s opinion the manager of the scheme has complied with the trust deed and the offer of
interests in the scheme. However, it is common practice for trustees to add a disclaimer to the effect that the
trustee has assumed that the factual information contained in the prospectus and all information given to the
trustee by the manager is correct and that the trustee has not carried out an independent check of that
information. In FMA’s view, trustees should be doing sufficient work to satisfy themselves of the accuracy of the
information provided by the manager to make the trustee statement without such a disclaimer.
The “Monitoring of KiwiSaver Offer Documents” report is available here.
FMA releases its annual Investigations and Enforcement Report
FMA has released its Investigations and Enforcement Report which highlights the key issues and themes that
have emerged through FMA’s investigations and enforcement activities from July 2012 to June 2013.
The report includes details of FMA’s investigations into the failed finance companies which it inherited from the
Securities Commission and certain parts of the former Ministry of Economic Development. Over the last
12 months failed finance company matters only accounted for 15 percent of FMA’s investigations. This reflects
FMA’s move away from legacy issues and focus on current issues impacting the market.
The Investigations and Enforcement Report is available here.
CORPORATE REPORTER – 29 July 2013 10