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Investing in a Non-Profit

During the development of the Ruapehu Skifield Stakeholders Association proposal to acquire the skifields several parties (commentators, critics and former RAL Directors) objected that investment into a non-profit company (the proposed structure) would not be allowed by the Financial Markets Conduct Act.


Financial Markets Authority

To address those concerns the RSSA has sought independent legal advice and also took the step of writing to the Financial Markets Authority requesting guidance or feedback on anything we might have missed.

The FMA wrote back with a surprisingly helpful letter. (Possibly because the FMA has a mandate to encourage investor education and transparency in the NZ financial markets as well as their role as the regulator.) Their letter of 19 April 2023 was helpful as another data-point in the decision making to structure the RSSA bid for the skifields. As such, we recently wrote to the FMA asking permission to release their letter publicly to help any parties (such as MBIE, PwC, RAL creditors or potential investors) who are evaluating the credibility and feasibility of the community-ownership proposal for the skifields.

The FMA's response to the request to release the 19 April 2023 email was received on 4 May 2023. Their 4 May and 19 April correspondence was as follows (partially redacted and edited for interpretation). A PDF of the 19 April email is also available for download below.


FMA: 4 May 2023

We have decided to treat your request pursuant to the Official Information Act 1982. The information is released subject to the following conditions:

  • Highlighting to all recipients that the FMA can’t provide legal advice;

  • The name and contact details of FMA staff are redacted.

  • The information is copied below.

Please note that the FMA cannot provide you with legal / professional advice, we recommend that you speak to a qualified legal adviser about the specific circumstances.

FMA: 19 April 2023

Based on the information available, it appears that the [life] passes were not offered by Ruapehu Alpine Lifts (RAL) as a regulated financial product, and therefore this matter falls outside of the remit of the FMA. We understand that the [life] passes will be governed by contractual agreements between RAL and the [life] pass holders.

In response to your question about a non-dividend paying equity raise, we note the following:

  1. There are examples in the market where a company’s board has no intention to declare dividends as part of an equity offer (for example: Ordinary shares offer in Truscreen Group Ltd - OFR12990).

  2. It is common for an equity offer to be made with a non-financial dividend, such as where co-operatives and irrigation companies offer shares in exchange for access to the pooled assets and/or facilities (for example: Shares offer by Amuri Irrigation company Ltd - OFR12762).

For both situations described above, the equity offers provide shareholders with voting rights on certain entitlements depending on the company’s constitution, and the issuers are required to comply with the relevant financial markets legislation (including the requirement to provide retail investors with a Product Disclosure Statement).

Please note that the FMA cannot provide you with legal / professional advice, we recommend that you speak to a qualified legal adviser about the specific circumstances.

FMA Email Non Dividend Paying Shares April 2023
Download PDF • 509KB


The RSSA has since sought independent legal advice and the result was the proposed Incorporated Society and Skifield Governance Structure to provide (1) governance representation to Life Pass Holders, along with (2) a normal regulated Equity Crowdfunding investment process, and (3) representation for any strategic debt holders.



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