(1) A financial adviser is a person who provides a financial adviser service.

(2) See section 16 for the types of financial advisers and sections 20D to 20F for how the Act's requirements apply in the case of a person who provides a financial adviser service on behalf of another person's business.

(1) A person (A) provides a financial adviser service if, in the ordinary course of a business, A provides any of the services listed in subsection (3) to a client.

(2) A person (A) also provides a financial adviser service if, in the course of business of a financial service provider registered under the FSP Act, A provides any of the services in subsection (3) to a client.

(3) The services are—

• (a) giving financial advice (see section 10):

• (b) providing an investment planning service (see section 11):

• (c) providing a discretionary investment management service (see section 12).

(4) A person does not provide a financial adviser service for the purposes of this Act if exempted under section 13, 14, or 148 or in the regulations.

(1) A person (A) gives financial advice if A makes a recommendation or gives an opinion in relation to acquiring or disposing of (including refraining from acquiring or disposing of) a financial product.

(2) Whether or not advice is financial advice for the purposes of this Act is not affected by how the advice is given or communicated.

(3) However, a person does not give financial advice for the purposes of this Act merely by—

• (a) providing information (for example, the cost or terms and conditions of a financial product); or

• (b) making a recommendation or giving an opinion relating to a class of financial products; or

• (c) making a recommendation or giving an opinion about the procedure for acquiring or disposing of a financial product; or

• (d) transmitting the financial advice of another person (unless A gives A's own financial advice in doing so or holds out the transmitted financial advice as A's own financial advice); or

• (e) recommending that a person consult a financial adviser.

(1) A person (A) provides an investment planning service if A designs, or offers to design, a plan for an individual that—

• (a) is based on, or purports to be based on, an analysis of the individual's current and future overall financial situation (which must include his or her investment needs) and identification of the individual's investment goals; and

• (b) includes 1 or more recommendations or opinions on how to realise those goals (or 1 or more of them).

(2) A service may be an investment planning service regardless of whether the analysis and identification is of the individual's particular financial situation and goals or of the financial situations and goals attributable to the class of persons that the individual is identified as coming within.

(1) A person (A) provides a discretionary investment management service if A—

• (a) decides which financial products to acquire or dispose of on behalf of a client (B); and

• (b) in doing so is acting under an authority granted to A (or A's employer or principal) to manage some or all of B's holdings of financial products.

(2) In determining whether A has that authority, it does not matter if B has the right to be consulted on, or to countermand, A's decisions.

(1) A service is not a financial adviser service for the purposes of this Act if the service is provided only as an incidental part of another business that is not otherwise a financial service or does not have, as its principal activity, the provision of another financial service.

(2) In addition, a service is not a financial adviser service if—

• (a) it is provided in connection with providing credit under a credit contract; and

• (b) both the service and the credit are provided as an incidental part of another business that is not otherwise a financial service or does not have, as its principal activity, the provision of another financial service.

(3) In this section, a service is incidental to another business if it is carried on to facilitate the carrying out of another business, or is ancillary to another business.

(4) Regulations may declare a class of service provided in the course of a class of business to be incidental, or that a class of business is not a financial service, for the purposes of subsection (1).

(1) None of the following is a financial adviser service for the purposes of this Act:

• Other occupations

• (a) a teacher, lecturer, journalist, or State services employee providing a relevant service in the course of that occupation:

• (b) a Minister of the Crown providing a relevant service in the course of his or her duties as a Minister of the Crown:

• (c) a member of Parliament providing a relevant service in the course of his or her duties as a member of Parliament:

• (d) a lawyer, incorporated law firm, conveyancing practitioner, chartered accountant, tax agent, real estate agent, registered legal executive, registered valuer, or any other exempted class of service provider (as specified in the regulations) providing a relevant service in the ordinary course of business of that kind:

• Crown-related organisations and other statutory officers and organisations

• (e) a statutory officer, a Crown organisation (other than Public Trust), or the Reserve Bank of New Zealand—

  • (i) discharging any duties or exercising any powers of the statutory officer, the Crown organisation, or the Reserve Bank of New Zealand under any enactment; or

  • (ii) doing anything that is incidental to the discharge of the functions of the statutory officer, the Crown organisation, or the Reserve Bank of New Zealand under any enactment:

• Non-profit organisations, workplace financial products, and trustee corporations

• (f) a non-profit organisation providing a relevant service if the relevant service is provided, without charge, in the course of the organisation's activities:

• (g) an employer providing a relevant service to an employee in connection with a financial product made available through the employee's workplace:

• (h) a trustee corporation providing a relevant service in the ordinary course of providing—

  • (i) legal or financial services relating to the preparation or drafting of a will; and

  • (ii) estate management and administration services (and associated legal, financial, and other services carried out under the relevant enactment governing the trustee corporation):

• Activities governed by other regulatory frameworks

• (i) a principal officer of any entity providing a relevant service in the person's capacity as a principal officer:

• (j) the offeror or target company providing a relevant service in the course of a takeover offer under the Takeovers Code:

• (k) an independent adviser providing a relevant service in the course of that person's functions under the Takeovers Code:

• (l) an approved rating agency providing a relevant service in connection with a rating given or to be given by it:

• (m) any form of communication made by or on behalf of an issuer that is contained in, or given in connection with, an offer of securities that—

  • (i) does not constitute an offer of securities to the public under section 3 of the Securities Act 1978; or

  • (ii) is exempt from Part 2 (other than sections 38B and 58) of that Act under section 5(2CB) or 5(2CBA) of that Act:

• (n) a person providing a relevant service in the course of carrying on a business of dealing in futures contracts within the scope of an authorisation under section 38(1)(a) of the Securities Markets Act 1988 or an approval under section 38(1)(b) of that Act:

• Documents required by law

• (o) providing or making available to a person any of the following documents or information:

  • (i) a prospectus, an investment statement, or an advertisement within the meaning of section 2A of the Securities Act 1978:

  • (ii) a document or information that is required by law to be provided or made available (for example, an annual report of a company), whether directly or as a condition of carrying out any activity or as a condition of an exemption from any enactment:

  • (iii) any other exempted document or information (as specified in the regulations):

• Services provided to product provider

• (p) a person providing a relevant service to a product provider in connection with a financial product of that provider in the course of an appointment by, or under a contract for services with, the product provider:

• Other exemptions in regulations

• (q) any other person providing a relevant service in circumstances exempted under the regulations.

(2) If subsection (1) applies to a person (A), it applies equally to any controlling owner, director, employee, agent, or other person acting in the course of, and for the purposes of, A's business to the same extent as it applies to A.

(3) In this section, relevant service means a service that, but for subsection (1), would be a financial adviser service.

(1) A financial adviser service is a personalised service if—

• (a) it is given to, or in respect of, a named client or a client that is otherwise readily identifiable by the financial adviser; and

• (b) either—

  • (i) the financial adviser has taken into account the client's particular financial situation or goals (or any 1 or more of them) in providing the service; or

  • (ii) a client would, in the circumstances in which the service is provided, reasonably expect the financial adviser to take into account the client's particular financial situation or goals (or any 1 or more of them).

(2) A service is not personalised merely because the client comes within a class of persons having predefined characteristics and the financial adviser takes the fact that the client comes within that class into account.

(3) A financial adviser service is a class service if it is not a personalised service.

Under this Act, there are the following types of financial adviser:

• (a) an authorised financial adviser:

• (b) an individual who is registered but not authorised:

• (c) a QFE adviser:

• (d) a QFE or any other entity that is registered but does not have QFE status:

• (e) any other person (whether an individual or an entity) who is an exempt provider.

(1) A person must not provide a financial adviser service unless—

• (a) the person is permitted to provide that service under sections 18 to 20; or

• (b) the person is—

  • (i) registered or an exempt provider; and

  • (ii) acting through a person to whom paragraph (a) applies (other than a QFE adviser); or

• (c) the person is a QFE or a member of a QFE group acting through a QFE adviser to whom paragraph (a) applies.

(2) Contraventions of this section may give rise to an offence (see section 114).

(1) The following individuals are permitted to provide a personalised service to a retail client:

• (a) if giving financial advice or providing a discretionary investment management service in relation to a category 1 product,—

  • (i) an authorised financial adviser:

  • (ii) a QFE adviser (but only if the QFE or a member of the QFE group is the product provider (or, in the case of a security, a promoter) of the relevant category 1 product):

• (b) if providing an investment planning service, an authorised financial adviser:

• (c) if giving financial advice or providing a discretionary investment management service in relation to a category 2 product,—

  • (i) an authorised financial adviser:

  • (ii) a registered individual:

  • (iii) a QFE adviser.

(2) Subsection (1)(a)(ii) is subject to any limitation on the scope of services that may be provided by the QFE adviser under the terms and conditions for the QFE under section 67A or a determination under section 75B(4).

The following persons are permitted to provide a class service to a retail client:

• (a) an authorised financial adviser:

• (b) a QFE adviser:

• (c) a registered person (whether an individual or an entity):

• (d) an exempt provider (whether an individual or an entity), other than an overseas financial adviser (see paragraph (a) of the definition of exempt provider in section 5).

The following persons are permitted to provide a financial adviser service to a wholesale client:

• (a) an authorised financial adviser:

• (b) a QFE adviser:

• (c) a registered person (whether an individual or an entity):

• (d) an exempt provider (whether an individual or an entity).

(1) A person (A) must not hold out (whether directly or indirectly) that A or any other person (B) is an authorised financial adviser unless A or B (as applicable) is an authorised financial adviser.

(2) Contraventions of this section may give rise to an offence (see section 115).

(1) A person (A) must not hold out (whether directly or indirectly) that A or any other person (B) is—

• (a) a financial planner or an investment planner unless A or B (as applicable) is an authorised financial adviser who is authorised to provide investment planning services under section 55:

• (b) offering a financial or an investment planning service unless A or B (as applicable) is—

  • (i) an authorised financial adviser who is authorised to provide investment planning services under section 55; or

  • (ii) acting through an authorised financial adviser who is so authorised.

(2) Contraventions of this section may give rise to an offence (see section 115).

(1) A person (A) must not hold out (whether directly or indirectly) that A or any other person (B) is a QFE or has QFE status unless A or B (as applicable) is a QFE or a partner entity.

(2) Contraventions of this section may give rise to an offence (see section 115).

Any person required, by this Act, to register to provide a financial adviser service must be treated, under the FSP Act, as being in the business of providing a financial service for the purposes of that Act (even if the person does not carry on that business).

A person (A) who provides a financial adviser service on behalf of the business of another person (B) is exempt from the obligation under section 48 of the FSP Act to be a member of an approved dispute resolution scheme for the purposes of registration if—

• (a) B is a member of an approved dispute resolution scheme; and

• (b) A's obligation to be a member of an approved dispute resolution scheme arises only by virtue of the financial adviser services provided on behalf of B's business.

(1) If a financial adviser service is provided by a person (A) on behalf of the business of another person (B), the following persons are treated as the financial adviser having the financial adviser obligation under this Act:

• (a) if it is a personalised service provided to a retail client (unless paragraph (b) applies), both A and B:

• (b) if A is a QFE adviser and B is the QFE or a member of a QFE group, B only:

• (c) in any other case, B only.

(2) If B has a financial adviser obligation under subsection (1),—

• (a) any act or omission by A is also treated as being done by B; and

• (b) if it is necessary to show the state of mind of B, it is sufficient to show that A had that state of mind.

(3) However, subsection (1) does not apply to the financial adviser obligations in sections 37 and 45 (which apply to A only).

(4) Subsections (1) to (3) do not affect the liability of A or B under any other Act or rule of law for A's actions.

(1) A disclosure obligation under this Part is an obligation to make disclosure under or in accordance with sections 22 to 31.

(2) A disclosure obligation applies only to a personalised service provided to a retail client.

(3) Contravention of a disclosure obligation may give rise to an offence (see section 117).

(1) A financial adviser who provides a personalised service to a retail client must disclose prescribed information to the client, in accordance with this Act and the regulations,—

• (a) before providing the service; or

• (b) if not practicable before, as soon as practicable after providing the service.

(2) Subsection (1) does not apply to a QFE adviser acting in that capacity.

(1) Regulations for the purposes of prescribing disclosure for financial advisers under section 22 may require disclosure,—

• (a) for authorised financial advisers, in relation to any or all of the matters referred to in subsection (2).

• (b) for other financial advisers, in relation to any or all of the matters referred to in subsection (2)(a) to (g).

(2) The matters are—

• (a) contact details:

• (b) the type of financial adviser:

• (c) financial adviser services provided (including financial products in relation to which a financial adviser service is provided):

• (d) fees:

• (e) material interests, relationships, or associations:

• (f) remuneration:

• (g) dispute resolution arrangements:

• (h) professional or business experience relevant to performance of a financial adviser service:

• (i) criminal convictions:

• (j) disciplinary proceedings:

• (k) adverse findings by a court or the FMA:

• (l) bankruptcy or other insolvency proceedings:

• (m) indemnity insurance:

• (n) matters required to be disclosed by the authorised financial adviser's terms and conditions of authorisation.

(1) Disclosure under section 22(1) must be made by 1 or more disclosure statements in accordance with the regulations.

(2) A disclosure statement must—

• (a) be in writing; and

• (b) state when it was prepared; and

• (c) state the name, address, trading name (if any), telephone number, fax number, and email address of the financial adviser; and

• (d) be—

  • (i) provided to the client; or

  • (ii) delivered or sent to the client at the client's last known address or an address (including an electronic address) specified by the client for that purpose.

(3) Regulations may provide for the form that a disclosure statement must take.

(1) A QFE or a member of a QFE group that, acting through a QFE adviser, provides a personalised service to a retail client must ensure that prescribed information is disclosed to the client, in accordance with this Act and the regulations,—

• (a) before the service is provided; or

• (b) if not practicable before, as soon as practicable after the service is provided.

(2) Regulations for the purposes of this section may require disclosure in relation to any or all of the following matters:

• (a) contact details:

• (b) the type of financial adviser:

• (c) dispute resolution arrangements:

• (d) matters required to be disclosed by the QFE's terms and conditions of a grant of QFE status:

• (e) whether the QFE or member of the QFE group provides any other licensed service.

(3) Regulations may provide for the form that the disclosure must take.

Disclosure under a disclosure obligation must not be misleading, deceptive, or confusing at the time that the disclosure is made.

(1) Disclosure of the matters that must be disclosed under a disclosure obligation may be accompanied by disclosure of additional information.

(2) Additional disclosure that accompanies disclosure under a disclosure obligation must not be deceptive, misleading, or confusing at the time that it is made.

(1) Previous disclosure does not discharge a person’s disclosure obligation if the previous disclosure is out of date when the financial adviser service is performed.

(2) The previous disclosure is out of date if—

• (a) since the date of the disclosure there has been a material change in any matter that must be disclosed; and

• (b) a reasonable person in the position of the person for whom the financial adviser service is performed (A) would consider that the change would materially affect any of the following decisions by A:

  • (i) to proceed with a financial adviser service by the financial adviser in question (B):

  • (ii) to proceed with financial advice already given by B:

  • (iii) about the weight that A gives to financial advice by B:

  • (iv) to postpone or countermand the performance of a financial adviser service.

(3) Subsection (1) does not apply if—

• (a) the previous disclosure was by way of a disclosure statement; and

• (b) before the financial adviser service is performed, B gives A—

  • (i) a new disclosure statement that is up to date; or

  • (ii) additional written information that, when read with the original disclosure statement, updates the disclosure statement.

Any advertisement advertising financial adviser services by an authorised financial adviser must state that a disclosure statement is available, on request and free of charge.

(1) Subject to regulations being made under subsection (3), disclosure may be made by 2 or more financial advisers in a joint disclosure statement.

(2) A joint disclosure statement must—

• (a) comply with section 24(2)(a) to (c); and

• (b) comply with regulations prescribing the form of the joint disclosure statement; and

• (c) be—

  • (i) provided to the client; or

  • (ii) delivered or sent to the client at the client's last known address or an address (including an electronic address) specified by the client for that purpose.

(3) Regulations may prescribe—

• (a) when, and subject to what terms and conditions, disclosure may be made in a joint disclosure statement; and

• (b) the form of a joint disclosure statement.

(1) A conduct obligation under this Part is an obligation under sections 33 to 48.

(2) The conduct obligations in—

• (a) sections 33 to 35 apply to all financial adviser services:

• (b) section 36 applies to a class service provided to a retail client:

• (c) sections 37, 38, 45, and 45A apply to an authorised financial adviser, irrespective of the type of service:

• (d) sections 46 to 48 apply to a QFE and (in some cases) members of a QFE group, irrespective of the type of service.

(1) A financial adviser, when providing a financial adviser service, must exercise the care, diligence, and skill that a reasonable financial adviser would exercise in the same circumstances.

(2) In determining the degree of care, diligence, and skill that a reasonable financial adviser would exercise, the following matters must be taken into account (without limitation):

• (a) the nature and requirements of the financial adviser's client or (if it is a class service) of the clients intended to receive the service; and

• (b) the nature of the service provided and the circumstances in which the service is provided; and

• (c) the type of financial adviser.

(1) A financial adviser must not engage in conduct in relation to the provision of a financial adviser service that is misleading or deceptive or likely to mislead or deceive.

(2) A person who knowingly or recklessly contravenes subsection (1) commits an offence (see section 118).

(1) A financial adviser must not advertise a financial adviser service in a way that is misleading, deceptive, or confusing.

(2) A person who knowingly or recklessly contravenes subsection (1) commits an offence (see section 119).

A financial adviser must, when providing a class service to a retail client, comply with any 1 or more of the following requirements that apply under the regulations (if any):

• (a) ensure that the prescribed warning is given in the prescribed manner that the class service is not personalised:

• (b) ensure compliance with the prescribed requirements relating to the competency of, or the use of adequate care, diligence, and skill by, the persons involved in providing the service (for example, a requirement to obtain a certificate from the principal officers of the adviser or a requirement to obtain the approval of financial advice by an authorised financial adviser or individual registered financial adviser):

• (c) comply with any prescribed record-keeping or procedural requirements relating to those matters.

An authorised financial adviser must comply with the code.

(1) An authorised financial adviser (A) must not recommend to a person that that person acquire securities if—

• (a) when the securities were or are offered for subscription, the offer was or is illegal; and

• (b) the illegality has not been remedied; and

• (c) A knows or ought to know that, when the securities were or are offered for subscription, the offer was or is illegal.

(2) A person who contravenes subsection (1) commits an offence (see section 121).

(1) An authorised financial adviser must comply with the terms and conditions of his or her authorisation.

(2) A person who contravenes subsection (1) commits an offence (see section 126).

(1) If an authorised financial adviser (A) reasonably believes that a person has breached this Act or an obligation imposed under this Act (including the code) in a material respect, A may, as soon as practicable, report the breach to the FMA.

(2) If A makes a report under subsection (1) in good faith,—

• (a) no civil, criminal, or disciplinary proceedings may be brought against A in respect of the report:

• (b) no person may terminate the appointment or employment of A by reason of the report:

• (c) no tribunal, body, or authority that has jurisdiction in respect of the professional conduct of A may make an order against, or do any act in relation to, A in respect of the report:

• (d) the FMA must not disclose information that might identify A unless—

  • (i) A consents in writing to the disclosure of the information; or

  • (ii) the FMA believes that disclosure of the information is essential to the effective investigation of the alleged breach or is otherwise essential, having regard to the principles of natural justice.

(3) If A makes a report under subsection (1) (whether or not in good faith), the FMA must not disclose information that might identify a client of A unless—

• (a) the client consents in writing to the disclosure of the information; or

• (b) the FMA believes that disclosure of the information is essential to the effective investigation of the alleged breach or is otherwise essential, having regard to the principles of natural justice.

(1) Every QFE and every partner entity of a QFE must comply with the terms and conditions of the QFE's grant of QFE status.

(2) Contraventions of this section give rise to the offences described in section 129.

(1) A QFE or a member of a QFE group must not, in acting through an employee, agent, or nominated representative, engage in conduct in relation to a financial adviser service that is misleading or deceptive or likely to mislead or deceive.

(2) Contraventions of this section give rise to the offences described in section 130.

(1) A QFE or a member of a QFE group must not advertise a financial adviser service in a way that is misleading, deceptive, or confusing.

(2) Contraventions of this section give rise to the offences described in section 131.

(1) This section applies if the FMA has reason to believe that a financial adviser is in breach of a disclosure or conduct obligation.

(2) The FMA may give the financial adviser notice of his or her alleged breach and, if the FMA does give a notice of breach, the FMA must also give the financial adviser a reasonable opportunity to respond.

(3) If the FMA concludes, after considering the financial adviser's response, that the financial adviser is in breach, the FMA may give the financial adviser a direction in writing.

(4) The direction may—

• (a) direct the financial adviser to comply with the conduct or disclosure obligation:

• (b) stipulate any steps that the financial adviser must take in order to comply with the obligation:

• (c) require the financial adviser to report to the FMA within 28 days of the date of the direction stating how and when the FMA's direction will be implemented.

(5) A financial adviser who fails to comply with a direction by the FMA commits an offence (see section 135).

(6) Nothing in this section precludes the FMA from exercising any of its other powers under this Act against a financial adviser.

An authorised financial adviser is an individual who is—

• (a) registered; and

• (b) authorised.

Any individual may apply to the FMA to be authorised.

An application to be authorised must be—

• (a) in the prescribed form (if any); and

• (b) accompanied by the prescribed fee (if any).

A person (A) is eligible to be authorised if—

• (a) the FMA is satisfied that—

  • (i) A is registered or complies with section 13(a) and (b) of the FSP Act; and

  • (ii) A is a person of good character; and

  • (iii) A meets the levels of competency, knowledge, and skills specified in the code for an authorised financial adviser; and

  • (iv) A is not debarred from applying for authorisation; and

• (b) the FMA—

  • (i) is not aware, after making any inquiries that it considers appropriate, that A has been convicted by a court in New Zealand or elsewhere of an offence punishable by imprisonment for a term of 6 months or more; or

  • (ii) if the FMA is so aware, is satisfied that the commission of the offence does not reflect adversely on A’s fitness to act as an authorised financial adviser.

(1) If an applicant for authorisation is eligible, the FMA must authorise that person in respect of 1 or more of the following for a specified period:

• (a) providing any financial adviser service, or specified kinds of financial adviser services, in relation to any category 1 product, specified category 1 products, or specified classes of category 1 product:

• (b) providing a discretionary investment management service on behalf of clients, generally or in specified cases, in relation to any category 1 product, specified category 1 products, or specified classes of category 1 product:

• (c) providing investment planning services generally or in specified cases:

• (d) providing, in any case that is specified in the regulations for the purposes of this paragraph, services of the kind referred to in paragraph (a) or (b) or both, but in relation to any category 2 product, specified category 2 products, or specified classes of category 2 products.

(2) The authorisation may be subject to terms and conditions relating to financial adviser services or broking services or to both.

(3) If the FMA approves the application, the FMA must notify the applicant in writing of—

• (a) the authorisation; and

• (b) the terms and conditions (if any); and

• (c) the period of authorisation.

(4) The FMA may incorporate, with any modifications it considers appropriate, the standard conditions.

(5) If an applicant for authorisation is not eligible, the FMA must—

• (a) decline the application; and

• (b) notify the applicant in writing of—

  • (i) the decision and the reasons for it; and

  • (ii) the applicant’s right of appeal against the decision.

(6) Subsection (1)(d) does not limit or affect anything in section 18.

(1) An authorised financial adviser may apply to the FMA for a variation of the terms and conditions of the adviser’s authorisation.

(2) The FMA may grant or decline the application.

(3) The FMA may, by notice to an authorised financial adviser, propose a variation of the terms and conditions of the adviser’s authorisation or the period of the adviser’s authorisation, or both, on either or both of the following grounds:

• (a) the business of the adviser has changed in a way that poses a material risk to consumers:

• (b) the adviser has been involved in market practices that are, in material respects, inconsistent with the purpose of this Act.

(4) The FMA must specify in the notice a reasonable period for the adviser to respond in writing.

(5) After considering any response received within the period specified in the notice, the FMA may, by notice to the adviser, vary the terms and conditions of the adviser’s authorisation or the period of the adviser’s authorisation, or both.

(6) The FMA may, in the notice under subsection (5), vary terms and conditions on a provisional basis and, if it does so, must, in the light of any changes in risk posed by the adviser’s business or market practices, review those terms and conditions by a date stated in the notice.

(7) On completion of the review, the FMA may do any of the following:

• (a) confirm 1 or more of the variations effected by subsection (5):

• (b) cancel 1 or more of the variations effected by subsection (5):

• (c) propose further terms and conditions by giving the authorised financial adviser a notice under subsection (3).

(8) The FMA must give the authorised financial adviser notice of any decision taken under subsection (7)(a) or (b).

(1) If the FMA authorises the applicant, the FMA must notify the Registrar in writing of—

• (a) the name and business address of the applicant; and

• (b) the terms and conditions (if any) of the authorisation; and

• (c) the period of authorisation.

(2) The FMA may publicly notify the authorisation and the other matters referred to in subsection (1) as it thinks fit.

(1) A person’s authorisation as an authorised financial adviser terminates when—

• (a) the period of authorisation (including any extension under section 58(5)) expires; or

• (b) the FMA receives a written request from the person requesting the FMA to cancel his or her authorisation; or

• (c) the person ceases to be registered; or

• (d) the FMA cancels his or her authorisation under section 59(2).

(2) The FMA must notify the Registrar in writing of termination of authorisation under subsection (1)(a), (b), or (d).

(1) An authorised financial adviser may apply for renewal of authorisation.

(2) An application for renewal of authorisation must be—

• (a) made in the prescribed form (if any); and

• (b) accompanied by the prescribed fee (if any).

(3) Subject to subsection (4), sections 52 to 56 apply, with any necessary modifications, to an application for renewal of authorisation.

(4) In addition to the matters specified in section 54, the FMA must be satisfied that—

• (a) the applicant for renewal of authorisation has complied with the Act, the terms and conditions of authorisation, and the minimum professional standards for authorised financial advisers prescribed by the code; or

• (b) any failure, on the part of the applicant, to comply is not sufficiently serious or recent to preclude the renewal of the applicant’s authorisation.

(5) If an application for renewal of authorisation has been made but not determined before the date on which the authorisation is due to expire, the authorisation continues in force until the application is determined.

(6) The renewal of authorisation takes effect from the date of expiry of the previous authorisation.

(1) This section applies if the FMA is satisfied that an authorised financial adviser (A)—

• (a) has ceased to be eligible for authorisation; or

• (b) has breached or is in breach of this Act (excluding section 37) or the regulations; or

• (c) has breached or is in breach of a term or condition of his or her authorisation; or

• (d) is the subject of a recommendation by the disciplinary committee under section 101(3)(a), (b), or (c); or

• (e) has failed to pay a fee as required by this Act or the regulations or a levy as required by section 68 of the Financial Markets Authority Act 2011 or regulations made under that section.

(2) In any case to which this section applies, the FMA may, after following the procedure set out in section 60 and subject to subsection (3),—

• (a) cancel the authorisation; or

• (b) cancel the authorisation and debar A for a specified period from re-applying for authorisation; or

• (c) suspend the authorisation for a specified period or until A does any thing that the FMA may specify; or

• (d) amend the terms and conditions of the authorisation; or

• (e) make no order.

(3) The FMA may only take 1 of the actions specified in subsection (2).

(4) If the FMA cancels or suspends the authorisation of an authorised financial adviser, the FMA must notify the Registrar in writing of the cancellation or suspension, and, in the case of suspension, the period of suspension.

(5) The FMA may publicly notify the action it takes under subsection (2) as it sees fit.

The FMA must not take any of the actions specified in section 59(2) unless it has first—

• (a) informed the person concerned in writing as to why it may take any of those actions; and

• (b) given that person or his or her representative a reasonable opportunity to make written submissions and be heard on the question.

(1) This section applies if the FMA has reason to believe that an authorised financial adviser is in breach of the terms and conditions of his or her authorisation (the terms and conditions).

(2) The FMA may give the financial adviser notice of his or her alleged breach and, if the FMA does give a notice of breach, the FMA must also give the financial adviser a reasonable opportunity to respond.

(3) If the FMA concludes, after considering the financial adviser’s response, that the financial adviser is in breach, the FMA may give the financial adviser a direction in writing.

(4) The direction may—

• (a) direct the financial adviser to comply with the terms and conditions:

• (b) stipulate any steps that the financial adviser must take in order to comply with the terms and conditions:

• (c) require the financial adviser to report to the FMA within 28 days of the date of the direction stating how and by when the FMA's direction will be implemented.

(5) An authorised financial adviser who fails to comply with a direction by the FMA commits an offence (see section 127).

(6) Nothing in this section precludes the FMA from exercising any of its other powers under this Act against an authorised financial adviser.

(1) At the end of a period of suspension of authorisation, the person’s authorisation is immediately revived, unless his or her authorisation has been further suspended or has been cancelled.

(2) Suspension or cancellation under section 59(2) is effective when a written notice of the suspension or cancellation is sent to the person concerned by the FMA.

(1) A QFE is—

• (a) an entity that is registered and has QFE status; or

• (b) a number of partner entities that are each registered and jointly have QFE status.

(2) For the purposes of any powers or rights conferred, or obligations or liabilities imposed, on QFEs by this Act, a QFE described in subsection (1)(b) is taken to be a separate entity and a person.

(3) Subsection (2) does not limit any obligation or liability imposed on a partner entity.

An application may be made to the FMA by—

• (a) a single entity for QFE status; or

• (b) 2 or more related bodies corporate for joint QFE status.

(1) An application for QFE status must—

• (a) be in the prescribed form (if any); and

• (b) be accompanied by the prescribed fee (if any).

(2) If the applicant or applicants seek to have 1 or more entities approved as associated entities of the proposed QFE, the application must state the name of each entity sought to be approved as an associated entity and how that entity is connected to the applicant or applicants.

(3) The application must set out the procedures that the applicant or applicants have for—

• (a) training employees and nominated representatives; and

• (b) setting standards for employees and nominated representatives; and

• (c) monitoring those standards.

(1) The FMA may confer QFE status on a single entity applying under section 64(a) or on 2 or more entities applying under section 64(b) if it is satisfied that—

• (a) each entity is registered or is entitled to be registered; and

• (b) no entity is debarred from applying for QFE status; and

• (c) on the grant of QFE status and at all times while a QFE, the single entity that will be the QFE has, or the partner entities that will be the QFE together have, the capacity to, and will,—

  • (i) discharge its or their ongoing compliance obligations under section 76 and all other obligations on it under this Act or the regulations (other than any broker obligations); and

  • (ii) comply with the terms and conditions (if any) of the grant of QFE status; and

  • (iii) maintain procedures to ensure that retail clients of the QFE receive adequate consumer protection.

(2) In determining under subsection (1)(c) whether clients receive adequate consumer protection, the FMA must, in relation to QFE advisers who provide personalised services that relate to category 1 products,—

• (a) consider whether the clients will receive protection of a similar standard to that provided by advisers who are subject to the code; and

• (b) in doing so, take into account the scope of category 1 products in respect of which those QFE advisers provide financial adviser services.

(1) If an applicant under section 64(a) is eligible, or if applicants under section 64(b) are eligible, for QFE status, the FMA must approve the application and grant the applicant or the applicants QFE status.

(2) The grant of QFE status is subject to the terms and conditions specified or incorporated in the grant.

(3) The FMA may incorporate, with any modifications it considers appropriate, the standard conditions.

(4) If the application also asks for the approval of 1 or more entities as associated entities of the QFE, the FMA may approve an entity as an associated entity of the QFE if that entity—

• (a) is registered or is entitled to be registered; or

• (b) is, under the FSP Act, an affiliated entity of one of the applicants; or

• (c) is an exempt provider.

(5) Even though an entity is eligible under subsection (4), the FMA may decline to approve the entity for any reason, including, without limitation,—

• (a) the absence of a direct connection between the entity and the QFE or any of its partner entities; or

• (b) concerns specified under section 67A(2) that cannot be adequately addressed by the imposition of terms and conditions under section 67A(4).

(6) The FMA is not precluded from approving an entity as an associated entity of a QFE merely because the entity is, or is proposed to be, the associated entity of another QFE.

(1) This section applies if—

• (a) an application for QFE status asks for the approval of an entity as an associated entity; but

• (b) the FMA has concerns about the provision of personalised services in relation to certain category 1 products by individuals who would, following the approval of the entity, be the entity's QFE advisers.

(2) The FMA may specify its concerns in a notice to the applicant or applicants.

(3) The FMA must specify in the notice a reasonable period for the applicant or applicants to respond in writing and must ask the applicant or applicants to satisfy the FMA that the QFE advisers of the proposed associated entity are able to, and will, provide financial adviser services in relation to the category 1 product concerned with the appropriate level of professionalism and competence.

(4) After considering the entity's response, the FMA may make its approval of the entity as an associated entity subject to special terms and conditions, which form part of the terms and conditions specified under section 67(2).

(5) The terms and conditions referred to in subsection (4) may, without limitation, relate to—

• (a) the kinds of financial adviser services that may be provided by or on behalf of the associated entity:

• (b) any conditions and restrictions that are to apply to the provision of those services:

• (c) the way in which the QFE is to supervise the associated entity.

(1) If the FMA approves an application for a grant of QFE status, the FMA must notify the entity or entities in writing of—

• (a) the grant of QFE status; and

• (b) the terms and conditions; and

• (c) the period for which QFE status has been granted.

(2) If an applicant under section 64(a) is not, or 1 or more of the applicants under section 64(b) are not, eligible for QFE status, the FMA must—

• (a) decline the application; and

• (b) notify the entity or entities of—

  • (i) the decision and the reasons for it; and

  • (ii) the right of an applicant under section 64(a) to appeal, and the right of applicants under section 64(b) jointly to appeal, against the decision.

(1) A QFE group has the name that is approved by the FMA and chosen by the applicant or applicants for QFE status that results in the formation of the group.

(2) Every application for QFE status that would, if approved, result in the formation of a QFE group must submit a name for the proposed group.

(3) The FMA may ask the applicant or applicants to submit another name.

(1) If the FMA grants an entity or entities QFE status, the FMA must notify the Registrar in writing of—

• (a) the name of the entity, or the names of the partner entities, granted QFE status:

• (b) the period for which QFE status has been granted:

• (c) if a QFE group has been formed, the name of the group:

• (d) if associated entities of the QFE have been approved, the names of those entities.

(2) The FMA may publicly notify the grant of QFE status and the other matters referred to in subsection (1) as it thinks fit.

(1) The QFE of a QFE group may apply to the FMA to approve the addition of 1 or more entities as associated entities of the QFE.

(2) The application must—

• (a) be in the prescribed form (if any); and

• (b) be accompanied by the prescribed fee (if any); and

• (c) name the entities sought to be added as associated entities.

(3) Sections 67(3) to (5) and 67A apply with any necessary modifications.

(4) The QFE may withdraw the application at any time before it is determined.

(5) If the FMA approves an entity as an associated entity under this section, the FMA—

• (a) must notify the Registrar in writing of the name of the entity; and

• (b) may publicly notify the inclusion of the associated entity in the QFE group as it thinks fit.

The status of an associated entity terminates when—

• (a) the entity ceases to be registered; or

• (b) the FMA receives a written request from the entity or from the relevant QFE or any partner entity to cancel its status as associated entity; or

• (c) the QFE status of the relevant QFE is terminated.

(1) The FMA may issue a certificate stating that named entities are, as at the date of the certificate, a QFE group or that named entities were, during a specified period, a QFE group.

(2) A certificate issued under subsection (1) is, in the absence of proof to the contrary, evidence of its contents.

(1) A QFE or a partner entity may nominate an individual as one of its nominated representatives by—

• (a) complying with the method (if any) prescribed for that purpose in the terms and conditions of the relevant grant of QFE status; or

• (b) if those terms and conditions do not prescribe a method for that purpose, recording the nomination in a written instrument that—

  • (i) nominates the individual as a nominated representative of the QFE or of the partner entity; and

  • (ii) is dated and, if the nomination is to take effect on a later date, specifies that later date.

(2) An individual may not be the nominated representative of 2 or more entities unless the entities are related bodies corporate.

(3) The nomination of an individual as nominated representative is terminated if the entity that nominated the individual—

• (a) gives written notice to the individual and to the FMA to that effect; or

• (b) as a result of the termination of QFE status, ceases to be a QFE or part of a QFE.

(4) Every QFE must keep an up-to-date record of its nominated representatives.

(1) A QFE may apply to the FMA for a variation of the terms and conditions of the grant of QFE status.

(2) The FMA may grant or decline the application.

(3) The FMA may, by notice to a QFE, propose a variation of the terms and conditions of the QFE’s grant of QFE status or the period of the grant on either or both of the following grounds:

• (a) the business of the QFE or of the QFE group has changed in a way that poses a material risk to consumers:

• (b) the QFE or any member of the QFE group has been involved in market practices that are, in material respects, inconsistent with the purpose of this Act.

(4) The FMA must specify in the notice a reasonable period for the QFE to respond in writing.

(5) After considering any response received within the period specified in the notice, the FMA may, by notice to the QFE, vary the terms and conditions of the QFE’s grant of QFE status or the period of the grant, or both.

(6) The FMA may, in the notice under subsection (5), vary terms and conditions on a provisional basis and, if it does so, the FMA must, in the light of any changes in risk posed by the business or market practices of the QFE or any member of the QFE group, review those terms and conditions by a date stated in the notice.

(7) On completing the review, the FMA may do any of the following:

• (a) confirm 1 or more of the variations effected by subsection (5):

• (b) cancel 1 or more of the variations effected by subsection (5):

• (c) propose new terms and conditions or a new period of grant by giving the QFE a further notice under subsection (3).

(1) The QFE status of an entity or of partner entities terminates when—

• (a) the period of a grant of QFE status expires and the QFE fails for 60 clear days after that expiry to apply for renewal of QFE status; or

• (b) the FMA receives a written request from the QFE or from any partner entity requesting the FMA to cancel the QFE status; or

• (c) the entity that forms, or any of the partner entities that jointly form, the QFE ceases to be registered; or

• (d) the FMA cancels its QFE status under section 75D(2).

(2) The FMA must notify the Registrar in writing of the termination of QFE status under subsection (1)(a), (b), or (d).

(1) If, because of the complexity of a particular category 1 product, the FMA has concerns about the provision of personalised services in relation to that product by QFE advisers, the FMA may specify those concerns in a notice to the QFE or the partner entity whose QFE advisers provide those services.

(2) A notice under subsection (1) may be given only in exceptional circumstances.

(3) The FMA must specify in the notice a reasonable period for the relevant entity to respond in writing and must ask the entity to satisfy the FMA that the QFE advisers are able to, and will, provide financial adviser services in relation to the category 1 product concerned with the appropriate level of professionalism and competence.

(4) After considering the entity's response, the FMA may, by notice to the entity, determine that the QFE advisers may not provide personalised services to retail clients in relation to the specified category 1 product.

(5) A determination under subsection (4) has effect according to its tenor despite anything in section 18.

(6) The FMA may at any time, by notice to the entity, revoke a determination under subsection (4).

(1) A QFE may apply for renewal of QFE status.

(2) An application for renewal of QFE status must be—

• (a) made in the prescribed form (if any); and

• (b) accompanied by the prescribed fee (if any).

(3) Sections 64 to 70 apply, with any necessary modifications, to an application for renewal of QFE status.

(4) If an application for renewal of QFE status has been made but not determined before the close of the 60th day after the date on which the period for which QFE status has been granted expires, the QFE status continues until the application is determined.

(5) The renewal of QFE status takes effect from the date of expiry of the previous grant of QFE status.

(1) This section applies if the FMA is satisfied that—

• (a) a QFE or any partner entity of a QFE has ceased to be eligible for QFE status; or

• (b) the QFE or any member of the QFE group has breached or is in breach of this Act or the regulations; or

• (c) the QFE or any member of the QFE group is in breach of a term or condition of the grant of QFE status; or

• (d) the QFE or any partner entity of the QFE has failed to comply with a direction given to it by the FMA under section 75F; or

• (e) the QFE or any partner entity of the QFE has failed to pay a fee as required by this Act or the regulations or a levy as required by section 68 of the Financial Markets Authority Act 2011 or regulations made under that section.

(2) In any case to which this section applies, the FMA may, after following the procedure set out in section 75E and subject to subsections (3) and (4),—

• (a) cancel the QFE’s status; or

• (b) cancel the QFE’s status and debar, for a specified period, the entity, any partner entity, and any associated entity of the former QFE from re-applying for QFE status; or

• (c) suspend the QFE’s status for a specified period or until the suspended QFE or any partner entity, or any associated entity of the suspended QFE, does any thing that the FMA requires; or

• (d) amend the terms and conditions of the QFE’s grant of status; or

• (e) order that the QFE pay a fine not exceeding $50,000; or

• (f) censure the QFE; or

• (g) take no further action.

(3) The FMA may take only 1 of the actions specified in subsection (2), except that it may order the QFE to pay a fine not exceeding $50,000 in addition to taking an action under subsection (2)(d) or (f).

(4) All partner entities of a QFE are jointly and severally liable for the payment of a fine that the QFE is ordered to pay under subsection (2)(e).

(5) The FMA must not order the QFE to pay a fine in relation to an act or omission that constitutes an offence for which the QFE or any partner entity of the QFE has been convicted by a court.

(6) If the FMA cancels or suspends the QFE status of an entity, the FMA must notify the Registrar in writing of the cancellation or suspension, and, in the case of suspension, the period of suspension.

(7) The FMA may publicly notify the action it takes under subsection (2) as it sees fit.

The FMA must not take any of the actions specified in section 75D(2) unless it has first—

• (a) informed the QFE and any partner entities of the QFE in writing of the reasons for taking any of those actions; and

• (b) given the QFE and any partner entities of the QFE or their representatives a reasonable opportunity to make written submissions and be heard on the question.

(1) This section applies if the FMA has reason to believe that a QFE is in breach of a disclosure or conduct obligation or any obligation under section 76 or 77 (the obligation).

(2) The FMA may give the QFE, and every partner entity of the QFE, notice of its alleged breach and, if the FMA does give a notice of breach, the FMA must also give the QFE a reasonable opportunity to respond.

(3) If the FMA concludes, after considering the QFE’s response, that the QFE is in breach, the FMA may give the QFE a direction in writing.

(4) The direction may—

• (a) direct the QFE or any partner entity, or both, to comply with the obligation:

• (b) stipulate any steps that the QFE or any partner entity, or both, must take in order to comply with the obligation:

• (c) require the QFE to report to the FMA within 28 days of the date of the direction stating how and by when the FMA's direction will be implemented.

(5) A QFE or a partner entity that fails to comply with a direction by the FMA commits an offence (see section 132).

(6) Nothing in this section precludes the FMA from exercising any of its other powers under this Act against a QFE.

(1) A fine imposed by the FMA under section 75D(2)(e) is recoverable in any court as a debt due to the FMA.

(2) At the end of a period of suspension of QFE status, a QFE's status is immediately revived, unless its QFE status has been further suspended or has been cancelled.

(3) Suspension or cancellation is effective when a written notice of the suspension or cancellation is sent to the QFE by the FMA.

(1) A QFE, and every partner entity of a QFE, must—

• (a) ensure compliance by the QFE and, where the QFE is part of a QFE group, by every member of that group, and by each employee and nominated representative of the QFE and of every member of that group, with the terms and conditions of the grant of QFE status; and

• (b) where an associated entity is the associated entity not only of the QFE but also of another QFE, ensure compliance by the associated entity and by each employee of the associated entity with the terms and conditions of the grant of QFE status of that other QFE; and

• (c) in relation to QFE advisers who are employees of the QFE or of a member of the QFE group, ensure compliance by each of those persons with his or her financial adviser obligations; and

• (d) in relation to QFE advisers who are nominated representatives of the QFE or of a partner entity, ensure compliance by each of those persons with his or her financial adviser obligations, whether or not the nominated representative acts for the QFE or for the partner entity or for any related body corporate of the QFE or the partner entity; and

• (e) in relation to advisers of the QFE or of a member of the QFE group who perform a financial adviser service that, by virtue of sections 17 and 18 only an authorised financial adviser is permitted to perform, ensure that each of those persons is authorised; and

• (f) provide the FMA, whenever reasonably required by the FMA and in any case in accordance with any requirements specified in the terms and conditions of its grant of QFE status, with an up-to-date list of the names of—

  • (i) the authorised financial advisers of the QFE and of any members of the QFE group; and

  • (ii) the nominated representatives of the QFE and of any partner entity; and

• (g) provide an annual report to the FMA in accordance with section 77; and

• (h) comply with a direction by the FMA given under section 75F; and

• (i) comply with its other obligations under this Act and the regulations.

(2) A contravention of subsection (1)(e) gives rise to the offences described in section 133.

(1) Within 5 months after the end of its financial year, a QFE must send to the FMA a written report in respect of that year (the reporting year)—

• (a) certifying that the QFE and every member of the QFE group has complied with its obligations under this Act and the regulations, and with the terms and conditions of the grant of QFE status; and

• (b) if the QFE or any member of the QFE group has not complied with its obligations under this Act and the regulations, and with the terms and conditions of the grant of QFE status, stating those respects in which it has failed to comply; and

• (c) if the QFE is aware of any breach of a financial adviser obligation by an employee, agent, or nominated representative of the QFE or of a member of the QFE group, stating—

  • (i) the name of that person; and

  • (ii) the nature of that person’s breach or breaches; and

• (d) containing any other information required by the regulations; and

• (e) containing the information (if any) that is required to be contained in the report by the terms and conditions of the grant of QFE status.

(2) The report may be submitted by any partner entity of the QFE.

(3) The report must be signed by either—

• (a) a principal officer of the QFE; or

• (b) a principal officer of a partner entity of the QFE.

(4) Contraventions of subsection (1) give rise to the offences described in section 134.

The code committee is established.

The functions of the code committee are—

• (a) first, to produce a draft code for approval by the FMA; and

• (b) subsequently, to review the code from time to time; and

• (c) to recommend to the FMA changes to the code as the code committee thinks fit.

(1) The FMA may at any time—

• (a) appoint a member of the code committee; or

• (b) discharge a member of the code committee.

(2) The appointment of a member of the code committee must be for a specified period, but a member may be discharged under subsection (1)(b) before his or her period of appointment has expired.

(3) The code committee must have not less than 7 members and not more than 11 members, and the FMA must ensure that the number of current members does not fall below 7.

(4) The FMA must appoint as members of the code committee—

• (a) 1 person who, in the FMA's opinion, is qualified for appointment by virtue of his or her knowledge of, and experience and competency in relation to, consumer affairs; and

• (b) other persons who, in the FMA's opinion, are each qualified for appointment by virtue of their individual knowledge of, and experience and competency in relation to, the financial adviser industry.

(5) A member of the code committee may resign by notice in writing to the FMA.

(1) Meetings of the code committee must be held at the times and places as the code committee or the chairperson from time to time decides.

(2) The code committee must elect 1 of its members as chairperson.

(3) The quorum for a meeting of the code committee is 5 members.

(4) Every question before the code committee must be determined by a majority of the votes of the members present or otherwise.

(5) The chairperson of the code committee has a deliberative vote and, in the case of an equality of votes, a casting vote.

(6) Except as provided in this section and in any regulations made under this Act, the code committee may regulate its own procedure.

Clause 15 of Schedule 5 of the Crown Entities Act 2004 (Schedule 5) applies as if the code committee were a committee appointed by the FMA under clause 14 of Schedule 5 and with all other necessary modifications.

The FMA must fund the code committee.

(1) The code must provide for minimum standards of professional conduct that must be demonstrated by authorised financial advisers, including minimum standards—

• (a) of competence; and

• (b) of knowledge and skills; and

• (c) of ethical behaviour; and

• (d) of client care.

(2) The code must also provide for continuing professional training for authorised financial advisers, including specification of minimum requirements that an authorised financial adviser must meet for the purpose of continuing professional training.

(3) The code may specify different standards for different classes of authorised financial adviser.

(4) The code may limit or modify standards, or provide for separate standards, for the duration of 1 or more periods of transition.

(5) Despite subsection (1), the code may provide for different minimum standards for individuals training to be authorised financial advisers.

(1) The code committee must prepare a draft code.

(2) In preparing the draft code, the code committee must—

• (a) consult any persons that it reasonably considers to be representative of the financial adviser industry; and

• (b) consult with interest groups within the financial adviser industry; and

• (c) allow an opportunity for any person affected by the code to make submissions to the code committee.

(1) After receiving the draft code prepared by the code committee, the FMA must—

• (a) approve it; or

• (b) decline to approve it.

(2) The FMA must approve the draft code prepared by the code committee if the FMA is satisfied that—

• (a) a majority of the code committee has approved the draft code; and

• (b) the code committee has complied with its obligations under section 87(2); and

• (c) the draft code is consistent with this Act.

(3) A failure by the code committee to comply with its obligations under section 87(2) does not affect the validity of the code.

(4) This section is subject to section 89.

(1) If the FMA is not satisfied as to a matter specified in section 88(2),—

• (a) the FMA must direct the code committee to revise the draft code or undertake further consultation or receive submissions, as necessary; and

• (b) the code committee must as soon as practicable comply with the FMA's direction.

(2) If the FMA considers that the draft code is not consistent with this Act, the FMA must, in directing the code committee to revise the draft code, state in what respects it considers that the draft code is not consistent.

(1) After receiving a revised draft code, the FMA must—

• (a) approve the revised draft code; or

• (b) if the FMA considers that the draft code requires further amendment to be consistent with this Act,—

  • (i) make any amendments to the draft code that the FMA considers necessary; and

  • (ii) approve the draft code as amended.

(2) Before making any amendment to the draft code under this section, the FMA must—

• (a) advise the code committee of the FMA's intention to do so; and

• (b) give the code committee a reasonable opportunity to make submissions on the matter; and

• (c) consider those submissions.

The FMA must approve the draft code within 90 days of receiving the draft code or, if section 89 applies, within 90 days of receiving the revised draft code.

(1) After approving the draft code or after the 90-day deadline for approval specified in section 91 has expired, the FMA must forward the draft code to the Minister for the Minister’s approval.

(2) The Minister must approve the draft code unless the Minister considers that it is not consistent with this Act.

(3) If the Minister is not satisfied that the draft code is consistent with this Act, the Minister must implement the procedure set out in sections 89 and 90 with necessary modifications.

(4) For the purposes of subsection (3), a reference in sections 89 and 90 to the FMA must be read as a reference to the Minister.

The Minister must approve the draft code within 90 days of receiving the draft code or, if section 92(3) applies, within 90 days of receiving the revised draft code.

(1) After the Minister has approved the draft code or after the 90-day deadline for approval specified in section 93 has expired, the FMA must give notice in the Gazette of the date or dates on which the provisions of the code come into force.

(2) The notice may state different dates for different provisions, but no date may be before the 28th day after the date on which the notice is published in the Gazette.

(3) Each provision in the code comes into force on the date stated in the notice that applies to the provision.

(4) The code and the notice are each regulations for the purposes of the Regulations (Disallowance) Act 1989 and the Acts and Regulations Publication Act 1989.

(1) A change to the code may be proposed by—

• (a) the code committee; or

• (b) the FMA; or

• (c) the Minister.

(2) The procedure for changing the code is the same as the procedure set out in sections 87 to 94 for the preparation and approval of the draft code.

(1) Any person may complain to the FMA about the conduct of another person in that second person’s capacity as a financial adviser.

(2) The FMA may initiate a complaint.

(1) After receiving a complaint, the FMA must investigate the complaint if it is practicable to do so having regard to—

• (a) the nature and number of complaints to be investigated; and

• (b) the FMA's regulatory priorities as reflected in its statement of intent; and

• (c) the FMA's available resources.

(2) The FMA need not investigate a complaint if it is satisfied that—

• (a) the complaint is vexatious; or

• (b) the complaint is not sufficiently serious to warrant investigation.

When the FMA has, under section 97, investigated a complaint about an authorised financial adviser, it must refer the complaint to the disciplinary committee if, in the FMA's opinion, the conduct complained of amounts to a breach of the code.

If the FMA refers a complaint about an authorised financial adviser to the disciplinary committee, and the disciplinary committee considers that a hearing is necessary to deal with the complaint, the disciplinary committee must serve a written notice of the complaint on the financial adviser.

The disciplinary committee's notice of complaint to the financial adviser concerned (A) must—

• (a) state that the disciplinary committee considers that there is reason to believe that A may have breached the code; and

• (b) contain the particulars that are reasonably necessary to clearly inform A of the nature of the contravention; and

• (c) specify a date, which must not be sooner than 20 working days after the date of service of the notice, on which the disciplinary committee intends to hear the matter.

(1) In this section, A is the person who is the subject of the complaint.

(2) The disciplinary committee may take any of the actions referred to in subclause (3) if it is satisfied that A has breached the code.

(3) In any case to which subsection (2) applies, the disciplinary committee may—

• (a) recommend that the FMA cancels A’s authorisation:

• (b) recommend that the FMA—

  • (i) cancels A’s authorisation; and

  • (ii) debars A for a specified period from applying to be re-authorised:

• (c) recommend that the FMA suspends A's authorisation for a period of no more than 12 months or until A meets specified conditions relating to the authorisation (but, in any case, not for a period of more than 12 months):

• (d) censure A:

• (e) order that A may, for a period not exceeding 3 years, perform a financial adviser service only subject to any conditions as to employment, supervision, or otherwise that the disciplinary committee may specify in the order:

• (f) order that A undertake training specified in the order:

• (g) order that A must pay a fine not exceeding $10,000:

• (h) take no action.

(4) No fine may be imposed under subsection (3)(g) in relation to an act or omission that constitutes an offence for which A has been convicted by a court.

(5) In any case to which subsection (2) applies, the disciplinary committee may order that A must pay costs and expenses of, and incidental to, the investigation by the FMA and the disciplinary committee’s proceeding.

(6) The disciplinary committee may publicly notify the action in any way that it thinks fit.

(7) This section applies whether or not A is an authorised financial adviser at the time of the complaint, the investigation, or the disciplinary proceeding.

The disciplinary committee must not take any of the actions specified in section 101(3) unless it has first—

• (a) informed the person concerned in writing as to why it may take any of those actions; and

• (b) given that person or his or her representative a reasonable opportunity to make written submissions and be heard on the question.

The Minister must establish a disciplinary committee.

The functions of the disciplinary committee are to—

• (a) conduct disciplinary proceedings arising out of complaints regarding authorised financial advisers referred to it by the FMA; and

• (b) take any of the actions referred to in section 101(3) as a result of disciplinary proceedings.

(1) The Minister may at any time appoint a member of the disciplinary committee.

(2) The appointment of a member of the disciplinary committee must be for a specified period.

(3) The Minister must appoint one of the members of the disciplinary committee as the chairperson of the disciplinary committee.

(4) The disciplinary committee must have between not less than 4 members and not more than 6 members including the chairperson, and the Minister must ensure that the number of current members does not fall below 4.

(5) Apart from the chairperson, the Minister must appoint as members of the disciplinary committee—

• (a) at least 1 member who works or has worked in the financial adviser industry; and