1 Title
2 Commencement
3 Principal Act amended
4 Purpose
5 Commencement
6 Purpose of Act
7 Overview of Act
8 Interpretation
9 New sections 5A to 5I inserted
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”
“on behalf of B's business”
“acting through A”
10 New section 7 and subparts 1 and 1A of Part 2 substituted
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
11 New heading and sections 21 to 25 substituted
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
12 Disclosure by 2 or more financial advisers in joint disclosure statement
13 New sections 32 and 33 substituted
32 What is conduct obligation and when does it apply
33 Financial adviser must exercise care, diligence, and skill
14 Financial adviser must not engage in misleading or deceptive conduct
15 New section 36 substituted
36 Regulations may impose specific conduct obligations for class services to retail clients
16 Authorised financial adviser must not recommend or receive money for acquisition of securities if offer for subscription illegal
17 Sections 39 to 44 repealed
18 New section 45A inserted
45A Authorised financial adviser may report breach of Act to Commission
19 New heading and sections 46 to 48 substituted
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
20 Eligibility to be authorised
21 New sections 55 and 55A substituted
55 Commission must approve or decline application for authorisation
55A Variation of terms and conditions and period of authorisation
22 Renewal of authorisation
23 New sections 63 to 77 substituted
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
67A Associated entities may be subject to special terms and conditions in certain cases
68 Determination of application
69 Name of QFE group
70 Commission must notify Registrar of grant of QFE status
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
75 Variation of terms and conditions and period of grant of QFE status
75A Termination of QFE status
75B Commission may designate certain QFE products as beyond scope of QFE advisers
75C Renewal of QFE status
Commission's powers in relation to default by QFE or by members of QFE group
75D Commission’s powers in relation to QFE default
75E Reasonable opportunity to be heard
75F Commission may give QFE direction
75G Other provisions concerning Commission'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 Commission
24 New Part 3A inserted
Part 3ABrokers' 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
Commission's direction in respect of breach of disclosure or conduct obligation
77V Commission may give broker direction in respect of breach of disclosure or conduct obligation
25 Heading to Part 4 amended
26 Content of code
27 New section 94 substituted
94 Code comes into force by Gazette notice
28 New section 98 substituted
98 Reference of complaint to disciplinary committee
29 New heading and sections 114 and 115 substituted
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
30 Heading above section 117 amended
31 Failure to make disclosure under or in accordance with disclosure obligation
32 Heading above section 118 amended
33 New sections 118 to 120 substituted
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
34 Offence of recommending or receiving money in connection with offer of securities when subscription illegal
35 Sections 122 to 125 repealed
36 New heading and sections 129 to 134A substituted
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 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
134A Defence to offences relating to entities in QFE groups
37 New heading and sections 134B to 134G inserted
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 Commission’s direction
38 New heading inserted
39 New headings and sections 137A to 137S inserted
Subpart 4—Injunctions, banning orders, and other remedies
Injunctions
137A Injunctions against contraventions
137B Undertaking as to damages not required by Commission
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 Commission may make temporary banning orders for financial adviser services or broking services
137N Terms of temporary banning order
Process for Commission's orders
137O Commission must follow steps before making orders
137P Commission may shorten steps for specified orders
137Q Commission must give notice after making orders
137R General provisions on temporary banning orders
137S Offence of failing to comply with Commission's orders
40 Right of appeal
41 New heading and sections 147A to 147E inserted
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
42 New sections 148 to 148B substituted
148 Commission may grant exemptions
148A Commission may vary or revoke exemption
148B Status of exemptions, variations, or revocations
43 Commission must notify reasons for exemption
44 Section 150 repealed
45 New section 153 substituted
153 Levy
46 New section 154 substituted
154 General regulations
47 New section 157 substituted
157 Territorial scope
48 Section 159 repealed
49 New section 168 added
168 Grant of authorisations in transitional period without prior inquiry into convictions
50 Enactments amended consequential on principal Act
Schedule Enactments consequentially amended
Legislative history
The Parliament of New Zealand enacts as follows: