FMA proposes overhaul on property proportionate ownership

News release
31 August 2012

FMA proposes overhaul of rules around property proportionate ownership schemes

The Financial Markets Authority has today announced its proposal to overhaul the class exemption notice for Real Property Proportionate Ownership Schemes.

The current Securities Act exemption notice expires on 30 September and FMA does not propose to grant further similar exemptions.

Instead, all issuers will be required to register a prospectus and investment statement, and appoint a statutory supervisor. FMA intends to issue guidance to assist market participants with the disclosure requirements of the prospectus and investment statement as they relate to these schemes.

“There are significant risks particular to Real Property Proportionate Ownership Schemes that need to be better understood,” said FMA Head of Primary Regulatory Operations Sue Brown. “These changes will provide investors with the information they need to make informed decisions before investing in these schemes.”

The changes will come into effect on 1 October 2012.

Offers commencing before then will be able to use the existing notice.

FMA is seeking comments on the proposal and in particular on a new limited exemption to address two specific issues applying to proportionate ownership schemes relating to developments on real property.

A copy of the project update and consultation paper on exemptions for these schemes can be found here.

Submissions close on 24 September 2012.

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