Monday 31st of December 2007

Changes to Investment Statements - Important information about Investment Adviser disclosure The "Important Information" section of investment statements prepared under the Securities Act 1978 will need to be changed to take account of new disclosure requirements for investment advisers that come into force on 29 February 2008, under a Regulations amendment proposed by the Securities Commission. The changes to investment adviser disclosure arise from the Securities Markets Amendment Act 2008. That Act, when it comes into force, will repeal the Investment Advisers (Disclosure) Act 1996, and will replace this with new disclosure rules for investment advisers, to be located in Parts 4 & 5 of the Securities Markets Act 1988. Existing Investment Statements In a letter received from the Securities Commission, dated 19 December 2007, they have said: "Although the changes to investment adviser disclosure laws are significant, the change needed to reflect these in investment statements is relatively minor, and in our view is not, in and of itself, material to the offer of securities by an issuer. For this reason the Commission is of the opinion that existing stocks of investment statements can still be used after the new law comes into force. We propose that the amendment to regulations apply only to investment statements prepared after the amendment comes into force. Issuers who distribute existing investment statements after that date can take steps to ensure that the information about investment advisers in their investment statements is not inaccurate by distributing a copy of the new investment adviser statement with each investment statement (or they could amend an existing investment statement by placing the new statement over the old). The Commission encourages issuers to take steps such as these to inform investors about their rights under the new investment adviser law, but does not have any objection to issuers continuing to use existing stocks of investment statements." The Securities Commission is seeking comments on the proposed new statement and timing of the changes by 22 January 2008. Please feel free to email your thoughts to us so that we can accurately inform the Securities Commission of our member's views.