Finance companies report compliance

News release

30 August 2007

Finance companies report compliance

All except one of the finance companies that were asked to report to the Commission by yesterday have confirmed that their current prospectuses comply with the law and are not false or misleading. The exception is Five Star Consumer Finance Limited which announced this morning that it has been placed in receivership.

Finance companies are required to keep their prospectus, including the financial information in it, up to date at all times while they are offering securities. If there has been a material adverse change they must not take any further investment money until the prospectus has been amended.

Given recent failures of finance companies, the Commission wrote to remind all finance companies of their ongoing obligations and to request confirmation from their directors of compliance with those obligations.

“It is important to investors that the information they receive from finance companies is up to date and accurate, so that they can assess the risks and returns of the investment before they make decisions about investing”, said Commission acting chairman Colin Beyer.

49 companies were asked to respond by the end of yesterday. Another 18 have been asked to respond by the end of tomorrow. The Commission will provide an update once all responses have been received.

ENDS

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