1 Title
2 Commencement
Part 1
Preliminary provisions
3 Purpose of Act
4 Overview of Act
5 Interpretation
5A Who are clients
5B Who are retail clients
5C Who are wholesale clients
5D Who are eligible investors
5E Acceptance of certification
5F Revocation of certification
5G How to opt out of being wholesale client
5H Giving revocation of certification or notification of opt out
5I Meaning of acting on behalf of B's business and acting through A
6 Act binds the Crown
Part 2
Financial advisers and their disclosure and conduct obligations
7 Outline
Subpart 1—Key definitions for financial adviser services
What are financial adviser services
8 Who is financial adviser
9 What is financial adviser service
10 When person gives financial advice
11 When person provides investment planning service
12 When person provides discretionary investment management service
13 Exemption for incidental service
14 Other exemptions
When financial adviser service is personalised service or class service
15 When financial adviser service is personalised service or class service
Subpart 1A—Restrictions on providing financial adviser services
16 Types of financial adviser
Restrictions on providing financial adviser services
17 Who may provide financial adviser service
18 Who is permitted to provide personalised service to retail clients
19 Who is permitted to provide class service to retail clients
20 Who is permitted to provide financial adviser service to wholesale clients
Restrictions on holding out
20A Who may hold themselves out as authorised financial adviser
20B Who may hold themselves out as financial planner or investment planner
20C Who may hold themselves out as QFE or having QFE status
Persons acting in course of business of employers and principals
20D Application of FSP Act to employees, etc
20E Who must be member of dispute resolution scheme
20F Who is responsible for financial adviser obligations
Subpart 2—Financial advisers’ disclosure and conduct obligations
Disclosure obligations for personalised services for retail clients
21 What is disclosure obligation and when does it apply
22 Financial adviser must make disclosure before providing personalised service to retail client
23 What financial adviser must disclose
24 Disclosure statement
25 QFE must make disclosure before personalised service provided to retail client
26 Disclosure by qualifying financial entity [Repealed]
27 Disclosure must not be misleading, deceptive, or confusing
28 Disclosure of additional information
29 No compliance with disclosure obligations if disclosure out of date
30 Advertisement advertising financial adviser services by authorised financial adviser must refer to disclosure statement
31 Disclosure by 2 or more financial advisers in joint disclosure statement
Conduct obligations
32 What is conduct obligation and when does it apply
Conduct obligations that apply to all financial advisers
[Repealed]
33 Financial adviser must exercise care, diligence, and skill
34 Financial adviser must not engage in misleading or deceptive conduct
35 Advertisement by financial adviser must not be misleading, deceptive, or confusing
36 Regulations may impose specific conduct obligations for class services to retail clients
Conduct obligations that apply to authorised financial advisers only
37 Authorised financial adviser must comply with code
38 Authorised financial adviser must not recommend acquisition of securities if offer for subscription illegal
39 Authorised financial adviser must pay client’s money into separate trust account [Repealed]
40 Authorised financial adviser must account for client’s money or property [Repealed]
41 Authorised financial adviser must keep records of client’s money and other property [Repealed]
42 Restrictions on use of client’s money or property [Repealed]
43 Protection of client’s money or property held on trust [Repealed]
44 Meaning of received or held [Repealed]
45 Authorised financial adviser must comply with terms and conditions of his or her authorisation
45A Authorised financial adviser may report breach of Act to FMA
Conduct obligations related to QFEs
46 QFE must comply with terms and conditions of grant of QFE status
47 QFE or member of QFE group must not engage in misleading or deceptive conduct in relation to financial adviser service by employee, agent, or nominated representative
48 Advertisement by QFE or member of QFE group in relation to financial adviser service must not be misleading, deceptive, or confusing
FMA's direction in respect of breach of disclosure or conduct obligation
49 FMA may give financial adviser direction in respect of breach of disclosure or conduct obligation
Part 3
Authorised financial advisers and qualifying financial entities
50 Outline of this Part
Subpart 1—Authorised financial advisers
51 Who is authorised financial adviser
52 Who may apply to be authorised
53 Application to be authorised
54 Eligibility to be authorised
55 FMA must approve or decline application for authorisation
55A Variation of terms and conditions and period of authorisation
56 FMA must notify Registrar of authorisation
57 Termination of authorisation
58 Renewal of authorisation
FMA's powers in relation to default by authorised financial adviser
59 FMA's powers in relation to default by authorised financial adviser
60 Reasonable opportunity to be heard
61 FMA may give authorised financial adviser direction
62 Other provisions concerning FMA's powers in relation to default by authorised financial adviser
Subpart 2—Qualifying financial entities
63 What is qualifying financial entity (QFE)
64 Who may apply for QFE status
65 Application for QFE status
66 Eligibility for QFE status
67 FMA must approve or decline application for QFE status
67A Associated entities may be subject to special terms and conditions in certain cases
68 Determination of application
69 Name of QFE group
70 FMA must notify Registrar of grant of QFE status
Commission’s powers in relation to default by QFE
[Repealed]
71 Addition of associated entities
72 Termination of status of associated entity
73 Certification of QFE group
74 Nominated representatives of QFEs or partner entities
Liability of employee or agent
[Repealed]
75 Variation of terms and conditions and period of grant of QFE status
75A Termination of QFE status
75B FMA may designate certain QFE products as beyond scope of QFE advisers
75C Renewal of QFE status
FMA's powers in relation to default by QFE or by members of QFE group
75D FMA's powers in relation to QFE default
75E Reasonable opportunity to be heard
75F FMA may give QFE direction
75G Other provisions concerning FMA's powers in relation to QFE default
QFE’s obligations
76 Ongoing obligations of QFEs and of partner entities
77 QFE must provide annual report to FMA
Part 3A
Brokers' disclosure and conduct obligations
Who is broker and what is broking service
77A Who is broker
77B What is broking service
77C Other exemptions
Disclosure obligations for services for retail clients
77D What is disclosure obligation and when does it apply
77E Broker must make disclosure before receiving client money or client property from retail client
77F What broker must disclose and form of disclosure
77G Disclosure must not be misleading, deceptive, or confusing
77H Disclosure of additional information
77I No compliance with disclosure obligation if disclosure out of date
Brokers' conduct obligations
77J What is conduct obligation and when does it apply
77K Broker must exercise care, diligence, and skill
77L Broker must not engage in misleading or deceptive conduct
77M Advertisement of broking services must not be misleading, deceptive, or confusing
77N Restriction on use of term sharebroker
77O Broker must not receive client money if offer for subscription illegal
Trust accounting obligations for services for retail clients
77P Broker must pay client money into separate trust account
77Q Broker must account for client money and client property
77R Broker must keep records of client money and client property
77S Restrictions on use of client money and client property
77T Protection of client money and client property held on trust
Persons acting in course of business of employers or principals
77U Who is responsible for broker obligations
FMA's direction in respect of breach of disclosure or conduct obligation
77V FMA may give broker direction in respect of breach of disclosure or conduct obligation
Part 4
How financial advisers and brokers are regulated
78 Outline of this Part
Subpart 1—Code of professional conduct and code committee
Commissioner for Financial Advisers
[Repealed]
79 Commissioner for Financial Advisers [Repealed]
80 Functions of Commissioner [Repealed]
Code committee
81 Establishment of code committee
82 Functions of code committee
83 Membership of code committee
84 Proceedings of code committee
85 Certain provisions of Crown Entities Act 2004 apply to members of code committee
85A Funding of code committee
Code of professional conduct for authorised financial advisers
86 Content of code
87 Code committee must prepare code
88 FMA's approval of draft code
89 FMA may require revision or consultation
90 FMA's approval of revised draft code
91 Deadline for FMA's approval of draft code
92 Minister’s approval required
93 Deadline for Minister's approval of draft code
94 Code comes into force by Gazette notice
Changes to code
95 Changes to code
Subpart 2—Complaints and disciplinary proceedings
Who deals with complaints
96 Complaint about financial adviser
97 Investigation by FMA
Complaint about authorised financial adviser
98 Reference of complaint to disciplinary committee
99 Disciplinary committee must give notice of complaint to financial adviser concerned
100 Content of disciplinary committee's notice of complaint
101 Disciplinary committee may discipline authorised financial adviser for breach of code
102 Reasonable opportunity to be heard
Disciplinary committee
103 Minister must establish disciplinary committee
104 Functions of disciplinary committee
105 Membership of disciplinary committee
106 Proceedings of disciplinary committee
107 Disciplinary committee may hear evidence in disciplinary proceeding
108 District Court may authorise disciplinary committee to summon witnesses on disciplinary matters
109 Issuing of summons by disciplinary committee
110 Serving of summons
111 Witnesses' fees, allowances, and expenses
112 Protection for witnesses and counsel in disciplinary proceeding
113 Certain provisions of Crown Entities Act 2004 apply to members of disciplinary committee
113A Funding of disciplinary committee
Subpart 3—Offences
Offences: Restrictions on providing services and holding out
114 Offence of providing financial adviser service without being permitted to do so
115 Offence of holding out as authorised financial adviser, financial planner, investment planner, or QFE
116 Offences in relation to employer or principal failing to maintain registration [Repealed]
Disclosure offences: Financial advisers, QFEs, and brokers
117 Failure to make disclosure under or in accordance with disclosure obligation
Conduct offences: Financial advisers and brokers
118 Offence of misleading or deceptive conduct by financial adviser or broker
119 Offence of misleading, deceptive, or confusing advertisement by financial adviser or broker
120 Offence of contravening restrictions on use of term sharebroker
Offences: Authorised financial advisers only
121 Offence of recommending offer of securities when subscription illegal
122 Offence of contravening requirement that authorised financial adviser pay client’s money into separate trust account [Repealed]
123 Offence of failing to account for client’s money or other property [Repealed]
124 Offence in relation to records of client’s money or property [Repealed]
125 Offence of breaching restrictions on use of client’s money or property [Repealed]
126 Offence of failing to comply with terms and conditions of authorisation
127 Offence of failing to comply with FMA's direction
128 Offence of contravening condition of disciplinary committee’s order
Offences: QFEs and QFE groups only
129 Offence of failing to comply with terms and conditions of QFE status
130 Offence of misleading or deceptive conduct in relation to financial adviser service by employee, agent, or nominated representative
131 Offence of misleading, etc, advertisement of financial adviser service by employee, agent, or nominated representative
132 Offence of failing to comply with FMA's direction
133 Offence of failing to comply with obligations in relation to authorised financial advisers
134 Offence of failing to provide annual report
134A Defence to offences relating to entities in QFE groups
Offences: Broking services only
134B Offence of receiving client money if offer for subscription illegal
134C Offence of contravening requirement to pay client money into separate trust account
134D Offence of failing to account for client money and client property
134E Offence in relation to records of client money and client property
134F Offence of breaching restrictions on use of client money and client property
134G Offence of failing to comply with FMA's direction
135 Offence of failing to comply with FMA's direction in respect of breach of disclosure or conduct obligation
Miscellaneous offences
[Repealed]
136 Offence of false declaration, etc, in support of application for authorisation or grant of QFE status
137 Failure to comply with summons to attend disciplinary committee hearing
Subpart 4—Injunctions, banning orders, and other remedies
Injunctions
137A Injunctions against contraventions
137B Undertaking as to damages not required by FMA
137C When court may make banning order
137D Terms of banning orders
137E Offence of contravening banning order
Orders to preserve assets to satisfy claims
137F When High Court may prohibit payment or transfer of money, securities, or other property
137G What orders may be made
137H Interim orders
137I Relationship with other law
137J Offence of breaching orders
Pecuniary and compensatory orders for contravening wholesale certification requirement
137K Pecuniary order for contravening wholesale certification requirement
137L Compensation for contravention of wholesale certification requirement
Temporary banning orders against financial adviser and broker
137M When FMA may make temporary banning orders for financial adviser services or broking services
137N Terms of temporary banning order
Process for FMA's orders
137O FMA must follow steps before making orders
137P FMA may shorten steps for specified orders
137Q FMA must give notice after making orders
137R General provisions on temporary banning orders
137S Offence of failing to comply with FMA's orders
Part 5
General provisions
Appeal of decisions
138 Right of appeal
139 Notice of right of appeal
140 Decision to have effect pending determination of appeal
141 Procedure on appeal
142 Court's decision final
143 Court may refer matter back for reconsideration
144 Orders as to costs
145 Orders as to publication of names
146 Appeal on question of law
Securities Commission: General powers
[Repealed]
147 Commission may exercise powers under Securities Act 1978 [Repealed]
Standard conditions for incorporation in authorisation and grants
147A Approval of standard conditions for incorporation in authorisations and grants of QFE status
147B Requirement to consult on proposal to incorporate material by reference
147C Variation or revocation of standard conditions
147D When standard conditions come into force
147E Incorporation of changed standard conditions into existing authorisations or grants
Exemptions
148 FMA may grant exemptions
148A FMA may vary or revoke exemption
148B Status of exemptions, variations, or revocations
149 FMA must notify reasons for exemption other than class exemption
150 Commission may vary or revoke exemption [Repealed]
Information sharing
151 Information sharing
Fees
152 FMA's fees, charges, and costs
153 Levy [Repealed]
Regulations
154 General regulations
155 Regulations relating to fees, charges, and costs
Other matters
156 No contracting out
157 Territorial scope
158 Breach of exemption conditions
159 Exemption or regulation in respect of specified overseas jurisdictions [Repealed]
160 Time for laying information for summary offences
161 Ministry must review and report on operation of Act
Other legislation affected
161A Financial Service Providers (Registration and Dispute Resolution) Act 2008 amended [Repealed]
162 KiwiSaver Act 2006 amended
163 Securities Act 1978 amended
164 Securities Markets Act 1988 amended
165 Sharebrokers Act 1908 repealed
166 Securities Markets (Investment Advisers and Brokers) Regulations 2007 revoked
Transitional provisions
167 Transitional provisions for existing offences and contravention under Securities Markets Act 1988
168 Grant of authorisations in transitional period without prior inquiry into convictions
Financial Advisers Amendment Act 2011
Reprint notes