Predatory investors in the New Zealand stock market were warned Monday that new penalties for undervalued and unsolicited stock offers are now in force.

Welcoming the new regulations, Commerce Minister Craig Foss said they aimed to protect shareholders and contribute to growing confidence in New Zealand's capital markets.

"Unsolicited or 'low ball' offers are a predatory tactic that damages the health and confidence of our capital markets," Foss said in a statement.

Lowball offers are unsolicited approaches to shareholders offering to buy their shares or other securities. Offer letters put pressure on people to sell their shares quickly, often with little information and using unconventional business practices.

"The new regulations will require greater disclosure requirements from a person or company that makes an offer, and introduce stronger rights and remedies for shareholders," said Foss.

Offenders were liable on summary conviction to a fine of up to 30,000 NZ dollars (24,562 U.S. dollars) under the new regulations, which included minimum information requirements, including stating the market price or a fair estimate of the value of the shares.

They also required people making unsolicited offers to give notice of a minimum of five to a maximum of 10 working days prior to the offer in a letter listing all the other recipients of the offer.

The Financial Markets Authority, New Zealand's securities regulator, has previously warned investors to check carefully before accepting unsolicited offers.

According to the FMA, the common traps are offers for much less than the stocks are worth and offers where the seller is not paid in full for a long time.