An acceptable investment means an investment that:
- is capable of a commercial return under normal circumstances; and
- is not for the personal use of the applicant(s); and
- is invested in New Zealand in New Zealand currency; and
is invested in lawful enterprises or managed funds that comply with all relevant laws in force in New Zealand: and
- has the potential to contribute to New Zealand's economy: and
- is invested in either one or more of the following:
- bonds issued by the New Zealand government or local authorities, or
- bonds issued by New Zealand firms traded on the New Zealand Debt Securities Market (NZDX), or
- bonds issued by New Zealand firms with at least a BBB- or equivalent rating from internationally recognised credit rating agencies (for example, Standard and Poor's); or
- equity in New Zealand firms (public or private including managed funds); and
Note: For the purposes of this policy convertible notes are considered to be an equity investment.
- is not (directly or indirectly) invested in residential property development or deposit taking financial institutions (e.g. banks or finance companies).
Personal use of investment funds
Personal use includes investment in assets such as a personal residence, car, boat or similar.
Managed funds
For the purposes of this policy managed funds are defined as either:
- a managed fund investment product offered by a financial institution; or
- funds invested in equities that are managed on an investor's behalf by a fund manager or broker.
In order to be acceptable as a form of investment managed funds must be invested only in New Zealand companies. Managed fund investments in New Zealand with international exposure are acceptable only for the proportion of the investment that is invested in New Zealand companies.
Example: Only 50% of a managed fund that equally invests in New Zealand and international equities would be deemed to be an acceptable investment as set out above.
Residential property development
For the purposes of this policy, residential property development includes:
- building or arranging to build a household unit for the purpose of selling it; or
- acquiring a household unit from a person who built it or arranged for it to be built for the purpose of selling it; or
- acquiring and subdividing land for the purposes of residential property development; or
- acquiring and/or selling an existing household unit.
Deposit taking financial institutions
A deposit taking financial institution is an institution that carries on the business of borrowing and lending money, or providing financial services, or both.