Statement of reasons

This notice, which comes into force on the day after the date of its notification in the Gazette, amends the Securities Act (Charitable and Religious Purposes) Exemption Notice 2003 (the principal notice).

The Securities Commission considers that it is appropriate to amend the principal notice to include Manawatu Golf Club Incorporated in the Schedule of the principal notice because—

• the exemptions for debt securities in the principal notice recognise that prospective investors in debt securities offered by a charitable organisation (as defined in the principal notice) are commonly motivated by a desire to support the goals of that organisation; they may or may not be making an investment for financial purposes. The exemptions for debt securities in the principal notice are granted on the basis that the attention of prospective investors is drawn to the exemption, and that investment advice is recommended for investors for whom financial returns are important:

• the exemptions for debt securities in the principal notice also restrict a charitable organisation from having more than $2 million worth of debt securities outstanding at any one time or, unless named in the Schedule of the principal notice, from allotting more than $500,000 worth of securities in any 12-month period:

• it is consistent with the policy of the principal notice to permit Manawatu Golf Club Incorporated to allot debt securities in excess of the annual cap to fund a one-off construction project that promotes the recreational purposes for which the club was established.