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Real Property Developments Exemption Notice Update
The Financial Markets Authority (FMA) has extended the Securities Act (Real Property Developments) Exemption Notice 2007 (Notice) to the close of 30 November 2016.
The Notice applies to participatory securities offered in the form of membership of an incorporated society, or a shareholding in a company, that owns, leases, licenses, maintains, administers, or operates communal facilities in a real property development. The Notice provides relief from the requirement to appoint a statutory supervisor, the prospectus and investment statement requirements, the restrictions on statements in advertisements by experts, and the requirement to produce certificates evidencing securities. The Notice requires developers to give purchasers information about their interests in the society or company and the intended communal facilities including the likely levies or fees.
The extension to 30 November 2016 is in line with the two year transition period in the Financial Markets Conduct Act 2013 (FMCA).
In light of the enactment of FMCA and prior to the disclosure provisions of the FMCA coming into force (which we understand is intended to be 1 December 2014), FMA will conduct a review of such offers of participatory securities with a view to indicating FMA’s approach to such offers under the new FMCA regime.
A copy of the Securities Act (Real Property Developments) Exemption Amendment Notice (No 2) 2013 is available here.
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