Compliance Report ISSA Recommendations 2000

ISSA - International Securtities Services Association

Compliance to the ISSA Recommendations 2000

Market: New Zealand

Status: October 5, 2001

Recommendation 1
Recommendation 2
Recommendation 3
Recommendation 4

Recommendation 5
Recommendation 6
Recommendation 7
Recommendation 8

Market selection

Recommendation 7

Investor compliance with the laws and regulations in the home countries of their investments should be part of their regulators' due diligence process. They, in turn, should be treated equitably in the home country of their investments especially in respect to their rights to shareholder benefits and concessionary arrangements under double tax agreements.

1. Do domestic regulators monitor the procedures in place at their locally based cross-border custodians to assure compliance with the laws and regulations of the home countries of their investments? No, there is no domestic regulator in New Zealand with that specific function.

2. What are the areas (e.g. benefits, investor compensation) where foreign investors are not treated in the same way as local investors? Supplementary dividends are paid to foreign investors who are not eligible for Imputation credits.

Statutory controls on the investment of funds and purchase of assets in New Zealand apply at certain levels under the Overseas Investment Commission Act. The OIC controls and monitors overseas investment in New Zealand. Land attracts a limit of NZD 10 million for any purchase and the limit for non-land investment is NZD 50 million.

3. Can sales proceeds and income be repatriated without any restrictions? Yes.

4. Are double tax agreements simple to apply, and do foreign investors receive promptly their full entitlement to dividends and interest payments? Generally speaking the treaties are simple to apply and in 99.9% of all cases, foreign investors receive their full entitlement to dividends and interest payments promptly. However there have been some difficulties in the New Zealand market with regard to enhanced dividends. Where a company who pays an enhanced dividend and will only recognise the registered position and will not accept claims for enhancements on outstanding ‘cum’ trades, the international investor may nor receive their fully enhanced dividend entitlement.

1.	Do domestic regulators monitor the procedures in place at their locally based cross-border custodians to assure compliance with the laws and regulations of the home countries of their investments?	No, there is no domestic regulator in New Zealand with that specific function.
2.	What are the areas (e.g. benefits, investor compensation) where foreign investors are not treated in the same way as local investors?	Supplementary dividends are paid to foreign investors who are not eligible for Imputation credits. Statutory controls on the investment of funds and purchase of assets in New Zealand apply at certain levels under the Overseas Investment Commission Act. The OIC controls and monitors overseas investment in New Zealand. Land attracts a limit of NZD 10 million for any purchase and the limit for non-land investment is NZD 50 million.
3.	Can sales proceeds and income be repatriated without any restrictions?	Yes.
4.	Are double tax agreements simple to apply, and do foreign investors receive promptly their full entitlement to dividends and interest payments?	Generally speaking the treaties are simple to apply and in 99.9% of all cases, foreign investors receive their full entitlement to dividends and interest payments promptly. However there have been some difficulties in the New Zealand market with regard to enhanced dividends. Where a company who pays an enhanced dividend and will only recognise the registered position and will not accept claims for enhancements on outstanding ‘cum’ trades, the international investor may nor receive their fully enhanced dividend entitlement.