New Zealand government announces next step in capital markets reform

The Ministry of Business, Innovation and Employment (MBIE) is progressing the next stage of reforms to New Zealand’s capital markets.

A discussion document released 14 July 2026 details “Phase Two” of the two-phased plan for capital markets reform. “Phase One” began in December 2024, with key changes including removing mandatory prospective financial information for IPOs (now optional, as of June 2025), and reducing the scope and cost of climate-related disclosures, including lowering liability exposure for directors (the bill implementing these changes is currently before Parliament).

Phase Two seeks feedback on the overall direction of reform, as well as eight regulatory areas where change could make a difference. These include product disclosure statements, director and issuer liabilities, Catalist market settings, USX audit requirements, crowdfunding and peer-to-peer lending, wholesale investor settings, auditor liability settings, and broker activity and visibility of offers.

The key Phase Two reform initiatives relevant to our practice are summarised below.

 

Product disclosure statements

MBIE is seeking feedback on whether existing product disclosure statement (PDS) requirements remain proportionate and are achieving their intended purpose as they relate to equity and debt IPOs. The consultation focuses on the extent to which current disclosure requirements for issuers, including NZX-listed companies, are appropriate and whether the current format requirements remain fit for purpose.

The review reflects broader concerns that disclosure obligations can be costly and complex to prepare, slow offers coming to market, and are often too long and complex. Feedback suggests increasingly lengthy disclosure documents may not always assist investors to identify the information most relevant to their investment decisions, with some stakeholders arguing that PDS requirements may even be discouraging public listings and reducing investment opportunities for retail investors.

To address these concerns, MBIE is seeking feedback on a range of reform options. These include:

• Reducing the amount of information required in full PDSs for listed equity and debt IPOs, including removing specific sections or reducing the whole PDS to the “Key Information Summary”, and moving additional information to the Disclose Register.
• Reducing or removing simplified disclosure PDS requirements for certain debt and equity offers, by removing specific sections or removing the PDS requirement altogether and replacing it with a short-form term sheet.

The Government is also considering a more flexible “digital-first” approach to disclosure, allowing information to be presented through websites, apps, and layered digital content rather than a traditional PDF-style document.

 

Director and issuer liability

The consultation also revisits director and issuer liability settings, an area that stakeholders have identified as a potential barrier to public market participation. MBIE is seeking feedback as to whether the FMC Act’s civil liability settings remain appropriately calibrated, particularly in relation to continuous disclosure obligations for listed issuers and deemed director liability for disclosure and financial reporting contraventions.

The discussion document notes concerns that current liability settings may influence decisions about whether companies choose to list, remain listed, or instead raise capital in overseas or private markets. It also references observations that New Zealand’s director liability settings are viewed by some stakeholders as onerous and make public markets less attractive relative to private capital raising or overseas exchanges. Concerns have also been raised that deemed liability exposes directors to significant personal risk even where they are not personally at fault, which may affect director recruitment and board decision-making.

The Government is considering a range of options to reduce these perceived barriers while maintaining appropriate accountability. For continuous disclosure obligations, options include:

• For directors and other persons: narrowing the requirements for being “involved” in a contravention, and adjusting the statutory defences available to directors and others who may have been involved in an issuer’s contravention.
• For issuers: moving to a fault-based standard and adjusting available statutory defences.

For deemed director liability, the Government is considering whether it should be retained in its current form, refined, or replaced with fault-based liability. Options for refinement include treating disclosure and financial reporting contraventions differently, narrowing the contraventions to which deemed liability applies, modifying directors’ statutory defences, or changing the consequences of deemed liability. Alternatively, deemed liability could be removed for disclosure contraventions, financial reporting contraventions, or both, and replaced with fault-based liability.

 

Wholesale investor settings

MBIE is also seeking feedback on whether the wholesale investor regime remains fit for purpose, with a particular focus on the eligible investor category. The discussion document notes that the current self-certification process may allow some inexperienced investors to access wholesale offers without fully understanding the associated risks. Stakeholders have also argued that the existing framework can create unnecessary barriers and costs, particularly through the requirement for investors to recertify every two years and the limited recognition of investment groups in supporting investment decisions.

The Government is considering a range of options to better balance access to wholesale investment opportunities with investor protection. These include:

• introducing more objective experience-based eligibility criteria for eligible investors, to help ensure that individuals understand their investment capabilities;
• prescribing additional content for eligible investor certificates, to support the individual’s understanding of their capability and consequences of receiving a wholesale offer;
• requiring independent financial advice, or more responsibility on the professional confirmer to have reasonable grounds to confirm the eligible investor certificate; and
• introducing an investment cap on the amount that could be invested under the eligible investor category.

The consultation also seeks feedback on extending the validity of eligible investor certificates from two to five years, or removing renewal requirements altogether, while retaining certification on a per-offer basis. In addition, the Government is considering restrictions on the public promotion of wholesale offers to reduce the risk of retail investors being exposed to wholesale-only investments, and whether existing wholesale investor thresholds should be updated to reflect inflation or other market developments.

 

Our view

Although the reforms are being advanced as targeted measures to reduce the cost of capital and improve access to funding, they raise broader questions about the balance between capital formation, investor protection, and regulatory accountability. Market participants may wish to consider whether current disclosure, liability, and wholesale investor settings are operating as intended and whether changes in these areas could improve participation in New Zealand’s capital markets.

 

Next steps

MBIE is interested in hearing from anyone with an interest in capital markets, including investors, issuers, businesses, fund managers, financial advisers, economists, legal analysts, or other interested parties.

Stakeholders are invited to provide feedback on the issues raised in the discussion document by 17:00 on 25 August 2026. Submissions can be made via the MBIE website.

Please let us know if you have any questions regarding the discussion document or would like assistance drafting a submission.