FMA Consults On Class Exemption For Buy-Backs Of Quoted Debt Securities
If granted, the exemption would allow listed issuers to buy back their own quoted debt securities off-market, without needing to prepare certain information in a disclosure document or adhere to certain timing requirements.
The Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko – is seeking feedback on a proposed class exemption for listed issuers from certain unsolicited offer regulations for buy-backs of their own quoted debt securities.
FMA Executive Director, Evaluation and Oversight Liam Mason said: 'One of our key priorities is to support innovation and growth by removing unnecessary regulatory burden. This consultation responds to feedback from the market that this is an area where changes could be made to make it easier for firms while still ensuring appropriate investor protection.'
The purpose of the unsolicited offer regulations in the Financial Markets Conduct Act 2013 (FMC Act) is to provide a comprehensive and robust framework to protect against 'low-ball' unsolicited offers, as well as to allow the FMA, as the regulator, to take both a proactive and reactive approach to monitoring and enforcement.
However, where an issuer is seeking to buy back its own quoted debt securities, the regulations' prescriptive disclosure and timing requirements may limit the flexibility of issuers to manage their debt efficiently.
If granted, the exemption would allow listed issuers to buy back their own quoted debt securities off-market, without needing to prepare certain information in a disclosure document or adhere to certain timing requirements. The exemption would be subject to conditions that the issuer must make available information about the offer to buy back the debt securities.
'Issuers are already subject to ongoing disclosure and governance obligations under the FMC Act, as well as the listing rules of the relevant licensed market, and already have a relationship with their debt security holders. Therefore, the risks may be substantially lower compared to other unsolicited, potentially low-ball, offers.'
The consultation is open until 25 July 2025
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