Quota Shares
Quota shares are a property right that represents the quota owner’s share of a fishery. There are 100 million shares allocated for each fishstock. Please note: There are restrictions in the Fisheries Act 1996 which controls the ownership of New Zealand quota by overseas persons or companies.
Owning quota shares does not allow you to take fish. The amount of quota shares owned determines the amount of Annual Catch Entitlement (ACE) that is generated each year. ACE is allocated at the start of each fishing year.
Scroll down to find out more, or select a topic from the list below.
Contents
- Generating ACE
- TACC Variations
- Preferential Allocation Rights
- Allocation of Quota
- Mortgages and Caveats
- Transfers of Quota Shares
- Aggregation Limits
- Frequently Asked Questions
Generating ACE
Each quota share has a value determined by the Quota Weight Equivalent (QWE). The QWE is calculated by dividing the Total Allowable Commercial Catch (TACC) for a stock by 100,000,000.
The following example shows how the TACC is used to calculate the Quota Weight Equivalent for quota shares:
So if you own 10,000 SNA1 quota shares, you will be allocated 450KG of SNA1 ACE at the start of each fishing year (unless there is a variation in the TACC).
4,500,000KG / 100,000,000 = 0.045KGs
QWE x Quota shares owned = ACE
0.045KGs x 10,000 = 450KGs of ACE
You can also use our Quota Share/ACE Converter to calculate the amount of ACE your Quota shares will generate or the number of quota shares you need to own in order to generate a specific amount of ACE.
TACC Variations
A TACC variation is where the Total Allowable Commercial Catch for a stock changes at the start of a fishing year. These decisions are made by the Minister for Primary Industries who may increase or decrease the TACC.
When the TACC for a stock changes, the Quota Weight Equivalent of shares for the stock will also change. This change may also affect the number of shares that you own.
TACC Decreases
When the TACC for a stock decreases, the quota weight equivalent of all shares for the stock will decrease. This decrease will result in a reduction in the ACE that each share generates. If the Crown owns shares for a stock it is able to minimise the impact of a TACC decrease. The Crown will do this by transferring shares for that stock to all quota share owners who are affected by the decrease.
For example, if the TACC for a stock is decreased from 250,000,000KG to 200,000,000KG:
When the Crown owns shares in that stock, those shares will be transferred to all other quota share owners to minimise the impact of the TACC decrease. Each share that you own will generate less ACE but you will own more shares than before the TACC decrease.
It is important to note that following the TACC decrease, the amount of ACE generated by your quota will not be greater than the amount generated before the TACC decrease.
If the Crown does not hold quota shares for that stock, quota share owners will not receive additional shares after the TACC decrease.
TACC Increase
When the TACC increases, the quota weight equivalent of all shares for the stock will increase. This will result in an increase in the ACE that each share generates.
Preferential Allocation Rights
Some quota share owners have preferential allocation rights. Preferential allocation rights are a weight of quota that an individual is entitled to receive when the TACC increases. If there is a TACC increase, the benefits of the increase will be applied to those with preferential allocation rights first.
How Does This Work?
First the total number of preferential allocation rights is determined. The Crown will then proportionately reduce the number of shares that every quota share owner has. These shares will then be proportionately allocated to those quota share owners who have preferential allocation rights. Those quota share owners that do not hold preferential allocation rights will have fewer shares but the value of each share will be greater.
For example, if the TACC for a stock is increased from 250,000,000KG to 300,000,000KG:
The weight value of all shares that are transferred to those with preferential allocation rights may not be greater than the TACC increase itself. Each individual with preferential allocation rights may only receive an amount of shares with a weight value equal to their preferential allocation right. Once all preferential allocation rights have been satisfied any benefits from a TACC increase will be divided between all quota share owners for that stock.
If no preferential allocation rights exist for a fishstock the number of shares that each quota share owner owns will not change. The amount of ACE that each share generates will, however, be higher.
Allocation of Quota
FishServe is contracted by the Ministry for Primary Industries to undertake the administration required to allocate new stocks into the Quota Management System (QMS).
If you are a new client and you wish to fish for quota species you will need to contact current ACE or Quota Share owners to purchase the quota or ACE. Lists of Quota and ACE owners are available from the registers. Charges will apply for these reports.
You will need to ensure you acquire sufficient ACE to cover your target species as well as any by-catch.
Mortgages over Quota Shares
You are able to register a mortgage over quota shares. The registration of a mortgage over quota shares prevents the transfer of those shares or the further registration of another mortgage over those shares.
If you wish to register a mortgage over your quota shares you will need to complete an application and pay the fee.
We suggest you seek legal advice if you are considering registering a mortgage under the Fisheries Act 1996.
Caveats over Quota Shares
A caveat over your shares will restrict your ability to transfer or mortgage the shares. There are 3 types of caveats that can be registered over quota shares.
- A consensual caveat that can be registered by any person with the consent of the owner of the shares.
- A court may order a caveat be lodged upon application to the court.
- A Crown caveat can be registered over quota shares by the Ministry for Primary Industries for either:
- an alleged breach of foreign ownership provisions;
- an alleged breach of aggregation limit provisions;
- failure to pay cost recovery levies; or
- an alleged commission of an offence for which one of the penalties is forfeiture of quota.
FishServe will notify you if a caveat is registered over your quota shares. All caveats, including the name and address of the person who registered the caveat will appear on the Quota register.
If you wish to register a caveat over your quota shares you will need to complete an application form and pay the required fee.
While a caveat is registered over your shares this does not prevent a mortgagee exercising a power of sale or the crown forfeiting your shares.
Transfers of Quota Shares
Quota shares may be transferred from one individual to another. Any transfer of quota shares must be registered on an approved quota share transfer form.
A quota share transfer will not be accepted if there is a mortgage or caveat restricting the shares or if the transferee is a foreign person.
Any transfer of quota shares will not entitle the purchaser of the shares to any catch rights until ACE is generated at the beginning of the next fishing year. The only way to obtain catch rights when buying quota shares, is to enter into a separate ACE transfer.
Aggregation Limits
No Quota Owner may hold more than a certain percentage of quota in any particular stock/species. The following limits apply (current as of January 2017);
Species Aggregation Limits
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
Stock Aggregation Limits
| Stock | Aggregation Limits |
|---|---|
| CRA1 | 10% |
| CRA10 | 10% |
| CRA2 | 10% |
| CRA3 | 10% |
| CRA4 | 10% |
| CRA5 | 10% |
| CRA6 | 10% |
| CRA7 | 10% |
| CRA8 | 10% |
| CRA9 | 10% |
| PAU1 | 20% |
| PAU10 | 20% |
| PAU2 | 20% |
| PAU3A | 20% |
| PAU3B | 20% |
| PAU4 | 20% |
| PAU5A | 20% |
| PAU5B | 20% |
| PAU5D | 20% |
| PAU6 | 20% |
| PAU6A | 20% |
| PAU7 | 20% |
Public Register
Quota share ownership is maintained on a public register. This register shows the number of quota shares that each person owns.
Your Obligations
As a quota share owner you are not required to submit any Catch Returns unless you also hold a fishing permit.
Frequently Asked Questions
Q. Why do I have to write the total amount of ACE or quota shares that I am transferring?
A. The 'Transfer Total' section records the total amount of ACE or quota shares that are being transferred in the application. Its purpose is to reduce the risk of errors made when completing the form, and errors being introduced at the point of data entry. When this information is data-entered, the system will perform a check to ensure the sum of all the lines entered equals the total transfer amount on the form.
Q. Why is the 'Total Price' collected on the ACE and quota share transfer forms?
A. The ACE transfer and quota share transfer forms have a ‘Total Price Per Line’ column. This is required by the Ministry for Primary Industries and is used to calculate average market prices for ACE and quota shares of each stock.
Q. Why don't both parties have to sign the ACE and quota share transfer forms?
A. ACE and quota share transfers require only the signature of the person that is selling the ACE or quota shares. This is because ACE and quota transfer applications are not designed to be a contract between the two parties to the transaction, but are simply an application to have a transfer placed on the appropriate register.