In this episode of Data Room, host Mark Stuart is joined by Igor Drinkovic, both Partners in our Corporate and Commercial team. Igor, an expert in capital markets and OIO (Overseas Investment Office) regulations, discusses the upcoming regulatory changes in the OIO regime and the forthcoming corporate governance law reforms. The episode provides a comprehensive overview of the proposed changes, their implications, and the expected timelines.
[00:05] Mark provides an overview of the topics to be discussed: the upcoming OIO changes and corporate governance regime changes.
[00:27] Igor discusses the upcoming OIO reforms and the trends these reforms follow as the changes have been happening since last year, aimed at process applications faster.
[01:12] The key changes are expected to pass through Parliament by the end of 2025 and come into effect in the first half of next year. While the structure of the regime remains the same, significant changes include reducing the processing time for certain applications to 15 working days and introducing a new consolidated national interest test.
{02:12] The new national interest test, as explained by Igor, allows a willing buyer to proceed with the investment if there is no risk to the national interests of the country. If not risk is found the OIO has 15 working days to consent. However, if a risk is identified further approval is needed, likely taking around 55 working days.
[03:11] Igor highlights the efficiency gains formalised by these changes, which should improve the perception of the regime overseas and make investment easier.
[03:41] Igor addresses potential uncertainties due to the broad definition of national interest and mentions that the government plans to issue directive letters and guidance to mitigate this.
[05:04] The first phase aims to streamline corporate legislation to reflect modern business practices and deter poor practices. The proposals for this phase are expected to come through in a bill soon.
[06:34] Mark provides an overview of key changes in the first phase, including the introduction of a unique identifier for company directors, which allows directors to keep their residential addresses private and better control phoenix companies.
[07:59] Mark explains the proposed changes to major transaction rules, clarifying what constitutes a major transaction and adopting a similar approach to NZX listing rules. Mark also mentions the repeal of recent amendments to directors’ duties and various technical amendments, such as simplifying the process for share capital reduction and updating e-filing and financial thresholds.
[09:45] Mark summaries the expected changes and their benefits for the upcoming year, noting that the draft bill for both phases are awaited.
Information in this episode is accurate as at the date of recording, 27 February 2025.
Please contact Mark Stuart or Igor Drinkovic in our Corporate and Commercial team if you need legal advice and guidance on any of the topics discussed in this episode.
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