NEW ZEALAND Law and Practice Contributed by: Ashton Goatley, Henry Willis, Sarah Keene and Erin Hickey, Webb Henderson
5. Capital Markets 5.1 Capital Markets Overview
• the Takeovers Act and the Takeovers Code (where the target is a “Code company”, which includes a listed company) – see 3.1 Transaction Structures ; • the OI Act and the accompanying regulations (dis - cussed in greater detail in 7. Foreign Investment/ National Security ); and • the Listing Rules (where either a relevant party or the target is listed on a licensed market operated by the NZX) – see 4.1 Corporate Governance Framework . 5.3 Investment Funds A foreign investor structured as an investment fund would not be subject to any additional regulatory review by reason of being an investment fund. Equally, however, investment funds are subject to the same FDI regulation as other investors (there is no general exception from the requirement for OIO consent by reason of the investor being an investment fund). 6. Antitrust/Competition 6.1 Applicable Regulator and Process Overview New Zealand’s merger control regime is governed by the Commerce Act. The relevant regulator is the New Zealand Commerce Commission (the “Commis - sion”). The Commerce Act generally prohibits mergers or acquisitions that have, or would be likely to have, the effect of substantially lessening competition in a market in New Zealand. The Commerce Act also provides for: • a voluntary clearance regime under which buyers and/or sellers can submit a clearance application seeking confirmation from the Commission that it agrees the transaction would not have, or be likely to have, the effect of substantially lessening com - petition in a market in New Zealand; • an authorisation regime under which a transac - tion that would (or would be likely to) have such an effect (and so would be prohibited) may none - theless be approved, if the Commission is satis - fied that it will in all circumstances result, or be likely to result, in a benefit to the public that would outweigh the lessening in competition that would
In New Zealand there are both public capital markets, operating through the NZX and other exchanges, and private sources of capital, spanning private equity, venture capital and angel investment. Besides the more traditional bank financing, private credit funds are also sources of debt financing. The FMCA also provides for peer-to-peer lending services and crowdfunding. 5.2 Securities Regulation The offer, promotion, issue and sale of financial prod - ucts (equity securities, debt securities, managed investment products and derivatives) in New Zealand is primarily regulated by the FMCA, which covers: • fair dealing in financial products and services, including prohibitions on engaging in conduct that is misleading or deceptive or likely to mislead or deceive – or making representations that are false or misleading, or unsubstantiated, in respect of financial products or services (Part 2 of the FMCA); • disclosure by way of a “Product Disclosure State - ment” (similar to a prospectus) in relation to offers of financial products for issue (unless an exclusion applies), and offers for sale in specified circum - stances (Part 3 of the FMCA); • governance of regulated offers of managed invest - ment products and debt securities, and record- keeping duties for all issuers of financial products under regulated offers (Part 4 of the FMCA); and • dealing in quoted financial products on licensed markets – eg, the NZX Main Board/Debt Market (Part 5 of the FMCA prohibits insider trading and market manipulation, and requires disclosure of rel - evant interests by substantial product holders, and directors and senior managers of listed issuers). Any person can trade quoted financial products (via an NZX-accredited broker) on the NZX. The following key acts and legislative instruments may also be relevant to a foreign investor investing in New Zealand:
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