New Zealand Legislation: Regulations

Explanatory note

This note is not part of the regulations, but is intended to indicate their general effect.

These regulations, which come into force on the 28th day after the date of their notification in the Gazette, amend regulation 33 of the Overseas Investment Regulations 2005. Regulation 33 provides that certain specified transactions are exempt from the requirements in the Overseas Investment Act 2005 to obtain consent to a transaction that will result in an overseas investment in sensitive land, significant business assets, or fishing quota. The amendments made by these regulations change one of the existing exemptions in regulation 33 and create 3 new exemptions.

The exemption in regulation 33(1)(a) is amended in order to increase its application. It currently only applies to intra-group transactions where the companies concerned are wholly owned by the overseas person. As a result of the amendment, it will apply to intra-group transactions where the companies are at least 95% owned by the overseas person. Regulation 33(2) is consequentially revoked.

The 3 new exemptions are—

• the insertion of a new regulation 33(1)(ja), which permits an overseas person to acquire 2 or more security arrangements if they are acquired together as a portfolio or bundle and the total value of consideration provided for that portfolio or bundle does not exceed $100 million:

• the addition of a new regulation 33(1)(o), which permits the temporary acquisition of securities for underwriting or subunderwriting purposes:

• the addition of a new regulation 33(1)(p), which permits an overseas person who has previously been granted consent to acquire securities to acquire more of those securities provided that the subsequent acquisitions increase the overall holding by less than 5% and occur within 5 years of the date on which the overseas person was granted consent for the initial acquisition of the securities.

Each of the 3 new exemptions is subject to specified conditions.