In accordance with section 157(6)(b) of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (“Act”), the Associate Minister of Justice hereby gives notice that he has granted the following exemption from the Act:
Ministerial Exemption: Spark Finance Limited
- In this exemption, unless the context otherwise requires:
Company means Spark Finance Limited.
Specified Securities means debt securities issued by the company.
Spark Group means Spark New Zealand Limited (Spark) and its subsidiaries.
- In my capacity as the Associate Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (“the Act”), I exempt the company from the provisions of this Act that would otherwise apply in respect of Specified Securities.
- This exemption is made subject to the following conditions:
- The company must at all times be a wholly owned subsidiary of Spark.
- The company must at all times use at least 95% of the subscriptions raised from the issue of Specified Securities to lend funds to, or to subscribe for or purchase securities in, any member of the Spark Group.
- The issue of debt securities, whether by the company or by other members of the Spark Group, is not a financial activity carried on in the ordinary course of business of the Spark Group taken as a whole.
- Having regard to the matters set out in section 157(3) of the Act, the exemption has been granted for the following reasons:
- As a matter of legal form the company is an entity established with a main purpose of raising funding for the Spark Group, including by issuing debt securities to the public, therefore it would be subject to anti-money laundering and financing of terrorism compliance obligations but for the exemption. However, as a matter of substance, the company is an administrative vehicle that the Spark Group uses for occasional issues of debt securities that are not in the ordinary course of the business of the Spark Group. The last time that the company issued debt securities to the public was in 2008. Having regard to the risk of money laundering and financing of terrorism, it is more appropriate to treat the company as a one-off or occasional issuer of debt for regulatory purposes than it would be to treat it as an entity that issues to the public in the ordinary course of business.
- Given the frequency with which the company issues debt securities, the regulatory burden of requiring ongoing compliance as though it were a debt issuer in the ordinary course of business would be disproportionate to the benefits.
- The conditions ensure:
- It continues to be appropriate to treat the company as an administrative funding vehicle for the Spark Group in that it must continue to be wholly owned by the Spark Group and 95% of subscriptions raised are for on-lending to the Spark Group; and
- The risk profile of the company remains consistent with that of an occasional or one-off issuer in that the issue of debt securities, whether from within the company or from other parts of the Spark Group, is not a financial activity carried on in the ordinary course of business of the Spark Group taken as a whole.
- This exemption comes into force on the day after the date I grant this exemption (9 November 2015).
- This exemption will expire on 30 June 2018.
Any person wishing to provide comment on this notice should contact the Criminal Law Team at the Ministry of Justice by emailing firstname.lastname@example.org