Securities Markets Act 1988

  • repealed
  • Securities Markets Act 1988: repealed, on 1 December 2014, by section 4(1)(b) of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).
  • Previous title has changed

Reprint as at 1 December 2014

Securities Markets Act 1988

Public Act1988 No 234
Date of assent21 December 1988
Commencementsee section 1
  • Securities Markets Act 1988: repealed, on 1 December 2014, by section 4(1)(b) of the Financial Markets (Repeals and Amendments) Act 2013 (2013 No 70).

  • Act name: substituted, on 1 December 2002, by section 4(1) of the Securities Markets Amendment Act 2002 (2002 No 44).


Note

Changes authorised by subpart 2 of Part 2 of the Legislation Act 2012 have been made in this official reprint.

Note 4 at the end of this reprint provides a list of the amendments incorporated.

This Act is administered by the Ministry of Business, Innovation, and Employment.


Contents

Title [Repealed]

1 Short Title and commencement

2 Interpretation

3 What is material information in relation to public issuer

3A What is material information in relation to futures contract

4 What information is generally available to the market

5 Relevant interests in securities (basic rule)

5A Extension of basic rule to powers or controls exercisable through trust, agreement, etc

5B Extension of basic rule to interests held by other persons under control or acting jointly

6 Situations not giving rise to relevant interests

6A Application of Part 1 to Reserve Bank of New Zealand [Repealed]

6B Act binds the Crown

Part 1
Dealing misconduct

Subpart 1Insider conduct and market manipulation prohibitions

Insider conduct prohibited

7 Liability of insider who deals in securities of a public issuer [Repealed]

8 Prohibition of insider conduct

8A Who is information insider

8B Meaning of inside information

8C Information insider must not trade

8D Information insider must not disclose inside information

8E Information insider must not advise or encourage trading

8F Criminal liability for insider conduct

When prohibition on insider conduct does not apply

9 Exception for trading required by enactment

9A Exception for disclosure required by enactment

9B Exceptions in respect of underwriting agreements

9C Exception in case of knowledge of person's own intentions or activities

9D Exception for agent executing trading instruction only

9E Exceptions for takeovers

9F Exception for redemption of units in unit trust

9G Exception for Reserve Bank

Affirmative defences

10 Absence of knowledge of trading

10A Inside information obtained by independent research and analysis

10B Equal information

10C Options and trading plans

10D Chinese wall defence

Market manipulation

11 False or misleading statement or information

11A Criminal liability for false or misleading statement or information

11B False or misleading appearance of trading, etc

11C Presumption as to false or misleading appearance of trading, etc

11D Criminal liability for false or misleading appearance of trading, etc

Futures contracts

11E Application of subpart 1 to insider conduct in relation to futures contract

Subpart 2General dealing misconduct prohibition

General dealing misconduct prohibition

12 Exceptions to section 11 [Repealed]

13 Misleading or deceptive conduct generally (for dealings in listed and non-listed securities)

Exceptions

14 Exceptions for takeovers

15 Exception for repurchase of shares by company

16 Exception for offers of securities to public

17 Exception for disclosure by investment advisers or brokers [Repealed]

Territorial scope

18 Territorial scope of general dealing misconduct prohibition

18A Commission may exercise public issuer's right of action [Repealed]

18B Requirements for Commission exercising public issuer's right of action [Repealed]

18C Procedural requirements for leave to exercise public issuer's right of action [Repealed]

18D Powers of court for proceedings exercising public issuer's right of action [Repealed]

18E Proceedings must not be settled, compromised, or discontinued without approval [Repealed]

Liability under Fair Trading Act 1986

19 No liability under Fair Trading Act 1986 if not liable under this Part

Part 2
Disclosure

Subpart 1Continuous disclosure by public issuers

Purpose of this subpart

19A Purpose of this subpart

Continuous disclosure obligation

19B Public issuers must disclose in accordance with listing rules if continuous disclosure listing rules apply

19C Public issuers must disclose in accordance with regulations if continuous disclosure regulations apply

19D What are continuous disclosure provisions

19E What is material information [Repealed]

19F What information is generally available to the market [Repealed]

Enforcement by Commission

[Repealed]

19G Commission may make orders requiring disclosure or corrective statements [Repealed]

19H Notice and submissions on Commission's orders [Repealed]

19I Limited notice and submissions for urgent orders [Repealed]

19J Offence for failure to comply with Commission orders [Repealed]

Enforcement—Civil remedies

[Repealed]

19K Court may make orders requiring disclosure or corrective statements [Repealed]

19L Court may impose pecuniary penalties [Repealed]

19M Court may make compensatory orders [Repealed]

19N Court may order payment of costs [Repealed]

19O General provisions as to court's orders [Repealed]

19P Persons entitled to appear before court [Repealed]

19PA No contravention of continuous disclosure provisions by person who takes reasonable steps to ensure public issuer complies

Regulations requiring continuous disclosure

[Repealed]

19Q Regulations requiring continuous disclosure [Repealed]

19R Requirements for regulations replacing continuous disclosure listing rules [Repealed]

19S Ongoing requirements for continuous disclosure regulations [Repealed]

Subpart 2Disclosure of relevant interests by directors and officers of public issuers

Directors' and officers' disclosure obligations

19SA Purpose of subpart

19T Directors and officers of public issuers must disclose relevant interests and dealings in relevant interests

19U What disclosure required

19V Form and method of disclosure

19W Disclosure obligation applies for 6 months after ceasing to hold office

Exemptions

19X Exemptions for directors or officers of co-operative companies

19Y Exemptions granted by FMA or regulations

Interests register

19Z Public issuer must keep interests register

19ZA Inspection and copying of interests register

Enforcement—Civil remedies

[Repealed]

19ZB Commission may make orders requiring disclosure [Repealed]

19ZC Notice, submissions, and opportunity to be heard and represented on Commission's orders [Repealed]

Offences

19ZD Offence for failure to comply with directors' and officers' disclosure obligation

19ZE Offence for failure to comply with Commission orders [Repealed]

19ZF Offences relating to interests register

Subpart 3Disclosure of interests of substantial security holders in public issuers

20 Purpose of subpart

21 Meaning of substantial security holder, substantial holding, and percentage

Event disclosure obligations

22 Persons must disclose if begin to have substantial holding

23 Substantial security holders must disclose if subsequent movement of 1% in holdings

24 Substantial security holders must disclose if subsequent changes in nature of relevant interests

25 Persons must disclose if cease to have substantial holding

26 What disclosure required

27 Form and method of disclosure

28 Public issuer must give acknowledgment of disclosure

29 How to ascertain total voting securities in class of public issuer's voting securities for purposes of disclosure

30 Exemption for persons with interest in other substantial security holders who comply

31 Exemption for trustee corporations and nominee companies

32 Conditions of exemption for trustee corporations and nominee companies

32A Exemption for persons under control or acting jointly with trustee corporations and nominee companies

33 Extended time for disclosure for trustees, executors, and administrators

Required disclosure obligations

34 FMA may require persons to disclose to market relevant interests and powers to get relevant interests

35 Public issuer may require registered holder to disclose relevant interests to it

35A Public issuer may require person who has relevant interest to disclose information to it

35B Form and method of notice requiring disclosure

Offence

35BA Offence for failure to comply with substantial holding disclosure obligation

Register and publication of substantial holdings

35C Public issuers must maintain register of disclosures of substantial holdings

35D Inspection and copying of substantial holdings register

35E Offences relating to substantial holdings register

35F Public issuers must publish information on substantial holdings

35G Registered exchange must publish disclosures

35H Offence for failing to publish information on substantial holdings or disclosures

35I No liability for publication of substantial holdings

35J Notice under this subpart not to affect incorporation of public issuer or constitute notice of trust

36 Regulations for purpose of this subpart [Repealed]

Part 2B
Registered markets

Subpart 1Registration of markets

Restrictions on activities relating to securities exchanges unless registered under this subpart

36A No holding out as securities exchange unless registered under this subpart

36B No operation of securities markets unless registered under this subpart (if restriction applies)

36C Power to apply and remove restriction on operating securities markets

36D Criteria and process for applying restriction on operating securities markets

36E Power to exempt securities markets and futures markets from Part 2 and this Part

How to obtain registration of market

36F Application for market registration

36FA Notification of market registration

Restrictions on registered exchanges

36FB No operation by registered exchange of unregistered market

Subpart 1AMarket rules

36FC Purpose and criteria applying under this subpart

Key requirements

36G Registered markets must be operated under market rules that comply with this subpart

36H Required matters for market rules

36I When market rules have effect

Process for approving proposed market rules and changes to market rules

36IA Application of process for approving proposed market rules and changes

36J Registered exchange must provide proposed changes to FMA

36K Approval process for proposed market rules and changes

36L Approval of proposed market rules and changes

Power to request changes to market rules

36M Power for FMA to request changes to market rules on certain matters

Miscellaneous provisions on market rules

36N Market rules must be available for public inspection

36O Application of Acts relating to regulations to contractual market rules

36P Registered exchange must not operate new market if proposed conduct rules or changes not approved [Repealed]

36Q Conduct rules must be available for public inspection [Repealed]

36R Application of Acts relating to regulations to conduct rules [Repealed]

Subpart 1BControl limits for registered exchanges

36S Power to impose control limits on registered exchanges

36T Control limit not to be exceeded

36U Effect of exceeding control limit

36V Application for approval to exceed control limit

36W Revocation or amendment of approval

Overseas exchanges

[Repealed]

36X Overseas exchanges [Repealed]

Subpart 2Obligations and oversight in respect of registered markets

General obligations in respect of registered markets

36Y General obligations in respect of registered markets

36YA Registered exchange must give annual report to FMA

36YB FMA may carry out general obligations review

36YC FMA must make written report on general obligations review

36YD FMA may require registered exchange to submit action plan on failure to meet general obligations

36YE Approval, amendment, or rejection of action plan

36YF Minister may give general obligation direction to registered exchange

36Z Offence for breach of terms or conditions of authorisation [Repealed]

Enforcement of prohibition of certain statements relating to exchanges

[Repealed]

36ZA Commission may make orders prohibiting statements relating to exchanges or requiring corrective statements [Repealed]

36ZB Notice, submissions, and opportunity to be heard and represented on Commission's orders [Repealed]

36ZC Offence for contravening prohibition order [Repealed]

Notification of disciplinary actions and suspected contraventions

36ZD Registered exchange must notify FMA of disciplinary actions and suspected contraventions

36ZE When notification required

36ZF Details and method of notification

Real-time surveillance information

36ZFA Registered exchange must ensure FMA has access to real-time trading and other information

Disclosure of material information

36ZG Registered exchange must give FMA material information given to market participants

36ZH When disclosure of material information required

36ZI Form and method of disclosure

Waiver of notification and disclosure obligations

36ZJ Waiver of notification and disclosure obligations

General information and assistance provisions

36ZK Registered exchange must give FMA or Takeovers Panel other information and assistance on request

36ZL Power to disclose further information

Notice and submissions on continuous disclosure determinations

36ZM Registered exchange must give notice and have regard to submissions on continuous disclosure determinations

36ZN Limited notice and submissions for urgent determinations

Directions to exchanges

36ZO FMA may give directions to registered exchanges

36ZP Grounds for continuous disclosure direction

36ZQ Grounds for other directions

36ZR Notice, opportunity for exchange to act, and submissions before FMA gives directions

36ZS Limited notice and submissions for urgent continuous disclosure directions

36ZT Notice and opportunity to be heard and represented after FMA gives direction

36ZU Effect of directions to exchanges

36ZV Provisions as to directions

Contracting out or modification of continuous disclosure process requirements

36ZW Contracting out or modification of continuous disclosure process requirements

Offence

36ZX Offence

Subpart 3Overseas exchanges

36ZY Overseas exchanges

36ZYA Revocation or amendment of authorisation

36ZYB Offence for breach of terms or conditions of authorisation

Part 3
Dealing in futures contracts

37 Interpretation of terms used in this Part

37A No holding out as futures exchange unless authorised under this Part

37B No operation of futures markets unless authorised under this Part (if restriction applies)

37C Power to apply and remove restriction on operating futures markets

37D Criteria and process for applying restriction on operating futures markets

37E No operation by authorised futures exchange of unauthorised futures market

38 Dealers in futures contracts to be authorised

39 Contravention of section 38 an offence

40 Effect of certain laws on authorised futures contracts and other contracts

Part 4
Investment advisers and brokers

Application of this Part

[Repealed]

41 When investment advice given to public, etc [Repealed]

Disclosure by investment advisers

[Repealed]

41A Investment advisers' disclosure obligation [Repealed]

41B Investment adviser must disclose experience, qualifications, professional standing, etc [Repealed]

41C Investment adviser must disclose certain criminal convictions, etc [Repealed]

41D Investment adviser must disclose fees [Repealed]

41E Investment adviser must disclose other interests and relationships [Repealed]

41F Investment adviser must disclose details of securities about which advice given [Repealed]

Disclosure by investment brokers

[Repealed]

41G Investment brokers' disclosure obligation [Repealed]

41H Investment broker must disclose certain criminal convictions, etc [Repealed]

41I Investment broker must disclose procedures for dealing with investment money or investment property [Repealed]

Method of disclosure

[Repealed]

41J How disclosure must be made [Repealed]

Other requirements relating to disclosure

[Repealed]

41K Disclosure must not be misleading [Repealed]

41L Disclosure of additional information [Repealed]

41M No compliance with disclosure obligations if disclosure statement out of date [Repealed]

41N Advertisement must refer to disclosure statement [Repealed]

41O Advertisement must not be deceptive, misleading, or confusing [Repealed]

Offences

[Repealed]

41P Offence for failure to comply with disclosure obligation [Repealed]

41Q Offence of deceptive, misleading, or confusing disclosure [Repealed]

41R Offence of deceptive, misleading, or confusing advertisement [Repealed]

41S Recommending, or receiving money for, acquisition of securities prohibited if offer for subscription illegal [Repealed]

41T Defence of immateriality [Repealed]

Territorial scope of this Part

[Repealed]

41U Territorial scope [Repealed]

Miscellaneous

[Repealed]

41V No contracting out [Repealed]

41W No liability under Fair Trading Act 1986 if not liable under this Part [Repealed]

Part 5
Enforcement and remedies

Subpart 1FMA's enforcement powers

Prohibition and corrective orders

42 When FMA may make prohibition and corrective orders

42A Terms of prohibition and corrective orders

Disclosure orders

42B When FMA may make disclosure orders

42C Terms of disclosure orders

Temporary investment adviser and broker banning orders

42D When FMA may make temporary banning orders for investment adviser or broker activities [Repealed]

42E Terms of temporary banning order for investment adviser and broker activities [Repealed]

Unsolicited offer orders

42EA When FMA may make unsolicited offer orders

42EB Terms of unsolicited offer orders

Process for FMA's orders

42F FMA must follow steps before making orders

42G FMA may shorten steps for specified orders

42H FMA must give notice after making orders

General provisions

42I General provisions on FMA's orders

42J Offence of failing to comply with FMA's orders

Subpart 2Court's enforcement powers

Injunctions

42K What court may injunct

42L When court may grant injunctions and interim injunctions

42M Undertaking as to damages not required by FMA

Corrective orders

42N When court may grant corrective orders

42O Terms of corrective orders

Disclosure orders

42P When court may make disclosure orders

42Q Terms of disclosure orders

Subpart 3Civil remedies

Overview of civil remedies

42R Overview of civil remedies

42S What are civil remedy provisions

Pecuniary penalty orders and declarations of contravention

42T When court may make pecuniary penalty orders and declarations of contravention

42U Purpose and effect of declarations of contravention

42V What declarations of contravention must state

42W Maximum amount of pecuniary penalty

42X Guidance for court on how to determine gains made or losses avoided for purposes of maximum amount

42Y Considerations for court in determining pecuniary penalty

42Z Court must order that recovery from pecuniary penalty be applied to FMA's actual costs

Compensatory orders

42ZA When court may make compensatory orders

42ZB Terms of compensatory orders

Civil remedy order for investment advisers' or brokers' disclosure obligations

42ZC When court may make civil remedy order for investment advisers' or brokers' disclosure obligations [Repealed]

42ZD Terms of civil remedy order for investment advisers' or brokers' disclosure obligations [Repealed]

Other civil remedy orders

42ZE When court may make other civil remedy orders

42ZF Terms of other civil remedy orders

Interrelationship of civil remedies

42ZG More than 1 civil remedy order may be made for same conduct

42ZH Only 1 pecuniary penalty order may be made for same conduct

General

42ZI Standard of proof for civil remedies

42ZJ Time limit for applying for civil remedies

Subpart 4Criminal offences and penalties

Penalties for offences

43 Penalties for failing to comply with Part 1

43A Penalties for failing to comply with Part 2

43B Penalties for failing to comply with Part 2B

43C Penalties for failing to comply with Part 3

43D Penalties for failing to comply with Part 4 [Repealed]

43E Penalties for failing to comply with this Part

Subpart 5Other court orders

Management bans

43F When court may make management banning orders

43G Terms of management banning orders

43H Offence of contravening management banning order

43I Persons automatically banned from management

43J Only 1 management ban may be made for same conduct

Investment adviser or broker bans

43K When court may make banning orders for investment adviser or broker activities [Repealed]

43L Terms of investment adviser or broker banning orders [Repealed]

43M Offence of contravening investment adviser or broker banning order [Repealed]

43N Persons automatically banned from investment adviser or broker activities [Repealed]

43O General provisions for bans and banning orders

Orders to preserve assets to satisfy claims

43P When court may prohibit payment or transfer of money, securities, or other property

43Q What orders may be made

43R Interim orders

43S Relationship with other law

43T Offence

Subpart 6General

43U Time for filing charging document for certain offences

43V Evidence not otherwise admissible

43W Court may order payment of FMA's costs

43X Orders to secure compliance

43Y Giving notice of applications for court orders

43Z General provisions as to court's orders

43ZA Persons entitled to appear before court

43ZB Knowledge of matters presumed if employee or agent knows matters

43ZC No pecuniary penalty and fine for same conduct

Part 6
Miscellaneous

General provisions

44 Commission may exercise powers under Securities Act 1978 [Repealed]

45 Actions of other persons on behalf of registered exchanges

46 Protection for acting on FMA directions

47 Protection from liability for registered exchanges and others

47AA Protection from liability in connection with unsolicited offer obligations

Appeals

47A Appeals against decisions of FMA on questions of law only

Exemptions granted and removed by FMA

48 Exemptions granted by FMA

48A Status and publication of exemptions

48B Variation or revocation of exemptions

48C FMA may designate persons as not exempt from disclosure obligations

48D Requirements for FMA for designations of persons as not exempt

Regulations

48DA Definitions relating to unsolicited offer regulations and related provisions

48DB Regulations concerning unsolicited offer regulations

48DC Specific provisions for regulations concerning unsolicited offers

48E Regulations requiring continuous disclosure by public issuers

48F Requirements for regulations replacing continuous disclosure listing rules

48G Ongoing requirements for continuous disclosure regulations

49 Regulations concerning directors' and officers' disclosure obligations

49A Regulations concerning substantial holding disclosure

49B Regulations concerning dealing in futures contracts

49C Regulations concerning investment advisers and brokers [Repealed]

49D Other regulations

49E Breach of exemption conditions

49F Regulations or exemptions in respect of specified overseas jurisdictions

50 Disclosure of information relating to inspection [Repealed]

51 Regulations and Orders in Council [Repealed]

52 Fees and charges [Repealed]

Securities Markets Amendment Act 2006

Securities Markets Amendment Act 2011

Reprint notes


Title [Repealed]

  • Title: repealed, on 1 December 2002, by section 3 of the Securities Markets Amendment Act 2002 (2002 No 44).