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Confusion about a complex rights offer 

Mia participated in a renounceable rights offer a company made to raise capital. The terms of the offer were complex but, put simply, investors could exercise their rights to purchase a certain number of shares in the company or they could sell their rights to someone else.

If an investor did not sell their rights or exercise them by a certain date, their rights would lapse. It was possible an investor would receive value for their lapsed (unexercised) rights if another investor applied to purchase the shares that had been attributable to the lapsed rights, but there was no guarantee of this. 

Mia purchased 20,000 rights through an NZX participant (the broker), but she only exercised 4,700 of her rights. Fortunately for Mia, she received value for her unexercised rights.  

Mia thought she had exercised all of the rights she had purchased so she contacted the broker to ask questions about what had happened. Mia did not understand why only some of her rights had been exercised. She also had questions about the payment she had received for the unexercised rights. She was concerned the wrong amount had been paid to her.

The broker was unable to resolve Mia’s concerns and she wanted someone independent to review the transactions. Mia was going to approach the Financial Markets Authority or the Commerce Commission but the broker explained to her that FSCL was the best place to raise her concerns. Mia then contacted us and we took her complaint up for investigation.


Mia still did not understand why all of her rights were not exercised, and she remained concerned that she had received less than she should have for the unexercised rights.

Mia also raised concerns about information she was given by the broker. She believed the terms of the offer were convoluted and that the broker had not made the process to exercise rights clear.

The broker confirmed that Mia had received the correct amount for her unexercised rights. The broker gave us information about the terms of the offer and calculations explaining the amount paid to Mia.

The broker also gave us information about the process investors had to follow to exercise their rights. Investors had to enter the number of rights they wanted to exercise, or they could select to exercise all of their rights.


After reviewing the broker’s transaction records and the terms of the offer, we concluded that Mia had received the correct amount for the unexercised rights she was left with.

We did not doubt that Mia had intended to exercise all of her rights, or that she thought she had done this, but we could not determine how Mia had not exercised all of her rights. We did not know why Mia had entered 4,700 as the number of rights she wanted to exercise, but this is what she had done.

We agreed with Mia that the terms of the offer were complex, but the broker was not responsible for the offer. We could only consider the broker’s information about the offer and its communications with Mia. The process information the broker gave us about how to exercise rights seemed clear.


After our initial review of the complaint, we spoke with Mia about our views and she agreed to discontinue her complaint.

Insights for consumers

We can help consumers who are worried something has gone wrong with a transaction. Mia did not want to label her concerns a complaint, but she did want a third party to review what had happened.

Dispute resolution schemes, like FSCL, are usually the best place to consider consumers’ concerns about financial service providers. If we receive a complaint that would be better dealt with by a government regulator or in a different dispute resolution process, we will discuss this with the consumer and, with their permission, refer the complaint on.