Disclosure extended to ACC staff

The ACC is to get staff to notify their investments in listed companies.

It has told investment staff they will have to file security holder notices when they hold stakes that, combined with ACC's investment, total 5 per cent of a listed company's shares.

ACC's move was welcomed by the Securities Commission yesterday and seems likely to encourage other fund managers to do the same.

AMP Capital Investors, the country's biggest fund manager, is considering the issue.

ACC, which has about $6 billion under management, said the move was based on further legal advice it had received on the 1988 Securities Markets Act.

It told investment staff they were legally obliged to file substantial security holder notices when their personal shareholdings plus shares held by ACC over which they had some element of control represented at least 5 per cent of a company's voting securities when combined.

"To avoid any misrepresentation, ACC wishes to emphasise the interest investment staff are deemed to have in ACC's shares is entirely non-beneficial," ACC said.

ACC subsequently filed notices to the stock exchange pointing out stakes its fund manager, Stephen Montgomery, holds in CDL Hotels and Turners & Growers and that his colleague, Nicholas Bagnell, owns shares in Mainfreight and Mooring Systems. The notices said that based on legal advice, the two had a relevant interest in ACC stakes in the same companies.

The commission's general counsel, Liam Mason, welcomed ACC's move and said he would like to see other fund managers do the same.

"It is going to depend on the circumstances of the fund manager. But if they do reach this conclusion - that the individual has the power - then they are obliged to do it. So it does become a legal obligation."

Walker Capital Management executive Stephen Walker said his firm might now look at putting out a couple of revised substantial security holder notices.

He said it was an issue for any fund that already had substantial security notices. But Walker suggested it could conceivably result in some takeover offers where a fund had a disclosed holding of close to 20 per cent of a company.

Roger Wallis, a Chapman Tripp partner specialising in corporate and securities law, said ACC appeared to have reassessed who controlled its investment decisions.

Where those same people also had their own investments in the same firms, ACC wanted to make sure those were also declared.

"If the individuals had their own holdings together with control over their employer's holdings, then if the individual doesn't file in relation to their own holdings, that could be a breach of the law."

Wallis said the issue would not apply to all fund managers as some outsourced parts of the investment decision-making process or allocated it to a committee. "The issue is highly fact-specific to the way each organisation manages its affairs and what policies they have for staff undertaking their own dealings."

Investment matters

* ACC has about $6 billion under management.
* Investment staff will have to file notices on companies if their private stakes and the ACC holdings over which they also have some control total 5pc.
* Other fund managers are likely to follow suit.