Reprint as at 28 July 2009

Financial Advisers Act 2008

Public Act	2008 No 91
Date of assent	27 September 2008
Commencement	see section 2

Note

Changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in this reprint.

A general outline of these changes is set out in the notes at the end of this reprint, together with other explanatory material about this reprint.

This Act is administered by the Ministry of Economic Development.

1 Title

2 Commencement

Part 1
Preliminary provisions

3 Purpose of Act

4 Overview of Act

5 Interpretation

6 Act binds the Crown

Part 2
Financial advisers and their disclosure and conduct obligations

7 Outline of this Part

Subpart 1—Who are financial advisers and what they can do

8 Who is financial adviser

9 Types of financial adviser

10 What is financial adviser service

11 When person gives financial advice

12 When advice or transaction by certain persons is not performing financial adviser service

13 Meaning of financial advice clarified

Restriction on performing financial adviser service

14 Who may perform financial adviser service

15 Individual who is authorised financial adviser

16 Individual who is registered

17 Individual who is QFE employee or agent

Provisions relating to employer or principal of financial adviser

18 Employer or principal of financial adviser must be registered

19 No requirement to be member of approved dispute resolution scheme if employer is member

20 Client’s rights preserved against employer or principal of financial adviser

Subpart 2—Financial advisers’ disclosure and conduct obligations

Disclosure obligations

21 What is disclosure obligation

22 Financial adviser must make disclosure before performing financial adviser service

23 Disclosure by authorised financial adviser

24 How disclosure must be made by authorised financial adviser

25 Disclosure by financial adviser performing financial adviser service in relation to category 2 product

26 Disclosure by qualifying financial entity

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29 No compliance with disclosure obligations if disclosure out of date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

Conduct obligations that apply to all financial advisers

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 Restriction on use of term sharebroker

Conduct obligations that apply to authorised financial advisers only

37 Authorised financial adviser must comply with code

38 Authorised financial adviser must not recommend or receive money for acquisition of securities if offer for subscription illegal

39 Authorised financial adviser must pay client’s money into separate trust account

40 Authorised financial adviser must account for client’s money or property

41 Authorised financial adviser must keep records of client’s money and other property

42 Restrictions on use of client’s money or property

43 Protection of client’s money or property held on trust

44 Meaning of received or held

45 Authorised financial adviser must comply with terms and conditions of his or her authorisation

Conduct obligations that apply to QFEs only

46 QFE must comply with terms and conditions of grant of QFE status

47 QFE must not engage in misleading or deceptive conduct in relation to financial adviser service by employee or agent

48 Advertisement by QFE of financial adviser service must not be misleading, deceptive, or confusing

Commission's direction in respect of breach of disclosure or conduct obligation

49 Commission 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 Commission must approve or decline application for authorisation

56 Commission must notify Registrar of authorisation

57 Termination of authorisation

58 Renewal of authorisation

Commission’s powers in relation to default by authorised financial adviser

59 Commission’s powers in relation to default by authorised financial adviser

60 Reasonable opportunity to be heard

61 Commission may give authorised financial adviser direction

62 Other provisions concerning Commission’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 Commission must approve or decline application for QFE status

68 Commission must notify Registrar of grant of QFE status

69 Termination of QFE status

70 Renewal of QFE status

Commission’s powers in relation to default by QFE

71 Commission’s powers in relation to QFE default

72 Reasonable opportunity to be heard

73 Commission may give QFE direction

74 Other provisions concerning Commission’s powers in relation to QFE default

Liability of employee or agent

75 Exemption from liability for employee or agent of QFE

QFE’s obligations

76 QFE’s ongoing compliance obligations

77 QFE must provide annual report to Commission

Part 4
How financial advisers are regulated

78 Outline of this Part

Subpart 1—Commissioner for Financial Advisers, code of professional conduct, and code committee

Commissioner for Financial Advisers

79 Commissioner for Financial Advisers

80 Functions of Commissioner

Code committee

81 Commissioner must establish 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

Code of professional conduct for authorised financial advisers

86 Content of code

87 Code committee must prepare code

88 Commissioner’s approval of draft code

89 Commissioner may require revision or consultation

90 Commissioner’s approval of revised draft code

91 Deadline for Commissioner’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 Commission

Complaint about authorised financial adviser

98 Complaint about authorised financial adviser

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

Subpart 3—Offences

Offences: registration and authorisation

114 Offence of performing financial adviser service without being registered

115 Offence of performing financial adviser service without being authorised

116 Offences in relation to employer or principal failing to maintain registration

Disclosure offences: financial advisers and QFEs

117 Failure to make disclosure under or in accordance with disclosure obligation

Conduct offences: financial advisers

118 Offence of misleading or deceptive conduct by financial adviser

119 Offence of misleading, deceptive, or confusing advertisement by financial adviser

120 Offence of contravening restriction on use of term sharebroker

Offences: authorised financial advisers only

121 Offence of recommending or receiving money in connection with offer of securities when subscription illegal

122 Offence of contravening requirement that authorised financial adviser pay client’s money into separate trust account

123 Offence of failing to account for client’s money or other property

124 Offence in relation to records of client’s money or property

125 Offence of breaching restrictions on use of client’s money or property

126 Offence of failing to comply with terms and conditions of authorisation

127 Offence of failing to comply with Commission’s direction

128 Offence of contravening condition of disciplinary committee’s order

Offences: QFEs 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 or agent

131 Offence of misleading, etc, advertisement of financial adviser service by employee or agent

132 Offence of failing to comply with Commission’s direction

133 Offence of failing to comply with obligations in relation to authorised financial advisers

134 Offence of failing to provide annual report

135 Offence of failing to comply with Commission's direction in respect of breach of disclosure or conduct obligation

Miscellaneous offences

136 Offence of false declaration, etc, in support of application for authorisation or grant of QFE status

137 Failure to comply with summons by Commissioner to attend disciplinary committee hearing

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

147 Commission may exercise powers under Securities Act 1978

Exemptions

148 Commission may grant exemptions

149 Commission must notify reasons for exemption

150 Commission may vary or revoke exemption

Information sharing

151 Information sharing

Fees and levies

152 Commission's fees, charges, and costs

153 Operational levy

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

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

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

Reprint notes

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Financial Advisers Act 2008 No 91 (as at 28 July 2009), Public Act

Financial Advisers Act 2008

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