Spark Finance Limited 

Date Made

Date signed: 2018-07-02

Sectors

Issuers of securities

Enacting statement

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 

Commencement date

This exemption comes into force on 2018-07-02

End date

This exemption will expire on 2023-06-30

Exemption

As the Associate Minister of Justice, and pursuant to section 157 of the Anti-Money Laundering and Countering Financing of Terrorism Act 2009, I exempt Spark Finance Limited (“SFL”) from the following provisions of the Act:

1. 1. Sections 10–71 inclusive.

This exemption applies in relation to debt securities issued by SFL.

Conditions

This exemption is made subject to the following conditions:

1. 1. SFL must continue to operate as an administrative funding vehicle for Spark New Zealand Limited and its subsidiaries (“Spark Group”);
   2. SFL must continue to be a wholly owned subsidiary of the Spark Group;
   3. SFL must ensure that at least 95% of subscriptions raised from the issue of debt securities are for on-lending to the Spark Group;
   4. the risk profile of SFL remains consistent with that of an occasional (or one-off) issuer, in that debt securities issued by SFL, whether from within SFL or from other parts of the Spark Group, are not a financial activity carried on in the ordinary course of business of the Spark Group taken as a whole; and
   5. SFL must inform the Ministry of Justice of any changes that may affect the exemption and/or conditions imposed by this written instrument within 14 days from when the change affecting the exemption occurs.

Statement of reasons

This exemption has been made for the following reasons

1. 1. the risk of money laundering and terrorist financing associated with SFL is low;
   2. an exemption would place SFL in substantially the same position as other corporate bond issuers of debt securities, which are not subject to the Act as reporting entities. The structure of the Spark Group is such that SFL issues debt securities to the public in the ordinary course of business because it operates as the treasury function of the Spark Group. If the Spark Group is looked at as a whole, then the issuance of debt securities would not be carried on in the ordinary course of the Spark Group’s business. In comparison, those other corporate bond issuers do not have a dedicated treasury subsidiary and therefore do not issue debt securities in the ordinary course of business;
   3. it is more appropriate to consider Spark Group as an occasional (or one-off) issuer of debt securities for regulatory purposes that is not subject to the Act as a reporting entity, rather than treat it as an issuer of debt securities to the public who issues securities in the ordinary course of business;
   4. an exemption is consistent with the Australian position where a person issuing or selling a security or derivative to another person on a prescribed financial market, is not subject to the Australian Anti-Money Laundering and Countering Financing of Terrorism Act for that transaction (Anti-Money Laundering and Counter-Terrorism Financing Rules Instrument 2007 (No. 1); and
   5. due to the low money laundering and terrorism financing risk associated with the issue of debt securities by SFL and the significant compliance costs to SFL that would arise from not granting this exemption, I consider that any benefits of requiring compliance with the Act are not justified by the associated costs.

Contact

Any person wishing to provide comment on this notice should contact the AML/CFT Team at the Ministry of Justice by emailing amlcft.exemptions@justice.govt.nz. 

Corrigendum

Previous exemptions

Spark Finance Limited

Spark Finance Limited

Spark Finance Limited