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HM 17: Same rights to all investment proceeds
or “Everyone gets equal rights to investment returns in a PIE”
You could also call this:

“Rules for unlisted companies to become listed PIEs”

If you have a company that’s not listed on a recognised stock exchange in New Zealand, you can still choose to become a listed PIE if you meet certain conditions. You need to have at least 100 shareholders and decide that you want to be listed on a recognised exchange in New Zealand. You also need to ask the Securities Commission or the FMA for permission to tell people in a product disclosure statement that you plan to become a listed company. Lastly, you have to convince the Commissioner that you would apply to be a listed company if you got all the necessary approvals.

If your company doesn’t get listed within 2 years of choosing to become a PIE, you’ll lose your PIE status on the last day of that 2-year period. However, there are some exceptions. If you met some of the conditions before 2 July 2009, you might have up to 4 years to get listed before losing your PIE status. The Commissioner can also give you more time if they think it’s reasonable.

Remember, if you want to know more about how to choose to become a listed PIE, you can look at section HM 71.

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Next up: HM 19: Requirements for listed PIEs: fully crediting distributions

or “Listed PIEs must give maximum tax credits when paying investors”
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Part H Taxation of certain entities
Portfolio investment entities: Requirements

HM 18Requirements for listed PIEs: unlisted companies

  1. A company that is not listed on a recognised exchange in New Zealand may choose under section HM 71 to become a listed PIE if it—

  2. has 100 shareholders or more; and
    1. has resolved to become a company listed on a recognised exchange in New Zealand if it were to obtain the required consents; and
      1. has applied to the Securities Commission or the FMA for an exemption to disclose in a product disclosure statement its intention to become a listed company; and
        1. satisfies the Commissioner that the company would apply to become a listed company if it were to obtain the required consents.

          1. If the company is not listed within 2 years of the election, it loses PIE status from the last day of that period.

          2. Despite subsection (2), a company does not lose PIE status at the end of the 2-year period if—

          3. the company has met the requirements of subsection (1)(b) and (c) before 2 July 2009; and
            1. a period of 4 years from the date on which the election takes effect has not expired.

              1. Despite subsections (2) and (3), the Commissioner may grant a further extension of time if it is reasonable in the circumstances.

              Compare
              • s HL 12
              Notes
              • Section HM 18: inserted, on (applying for the 2010–11 and later income years), by section 292(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
              • Section HM 18(1)(c): amended, on , by section 150 of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).
              • Section HM 18(1)(c): amended, on , by section 82 of the Financial Markets Authority Act 2011 (2011 No 5).
              • Section HM 18(3) heading: added, on (applying for the 2010–11 and later income years), by section 48(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
              • Section HM 18(3): added, on (applying for the 2010–11 and later income years), by section 48(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
              • Section HM 18(4) heading: added, on (applying for the 2010–11 and later income years), by section 48(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
              • Section HM 18(4): added, on (applying for the 2010–11 and later income years), by section 48(1) of the Taxation (Consequential Rate Alignment and Remedial Matters) Act 2009 (2009 No 63).
              • Section HM 18 list of defined terms apply: inserted, on , by section 74 of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).