Financial Markets (Repeals and Amendments) Act 2013

Reprint as at 9 August 2017

Coat of Arms of New Zealand

Financial Markets (Repeals and Amendments) Act 2013

Public Act
2013 No 70
Date of assent
13 September 2013
see section 2

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

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

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


6Principal Act amended
7Section 5A repealed
8New sections 48P to 48S inserted
48PProceedings relating to financial products or financial services
48QNo pecuniary penalty and fine for same conduct involving financial products or financial services
48RUnsubstantiated representations prohibition does not apply to financial markets disclosure
48SCertain conduct under Financial Markets Conduct Act 2013 does not contravene various provisions of this Act
9Transitional provision for existing offences and contraventions
10Principal Act amended
11Purpose of Act
13Who are clients
14Who are wholesale clients
15Who are eligible investors
16How to opt out of being wholesale client
17When person provides discretionary investment management service
18Other exemptions
19When financial adviser service is personalised service or class service
20Who may provide financial adviser service
21Who is permitted to provide personalised service to retail clients
22Who is permitted to provide class service to retail clients
23Who may hold themselves out as authorised financial adviser
24Financial adviser must make disclosure before providing personalised service to retail client
25What financial adviser must disclose
26No compliance with disclosure obligation if disclosure out of date
27New section 29A inserted
29AFurther prescribed information to be made available to clients of discretionary investment management service
28What is conduct obligation and when does it apply
29Financial adviser must exercise care, diligence, and skill
30New section 38 substituted
38Authorised financial adviser must not recommend acquisition of FMCA financial products if offer contravenes financial markets legislation
31New sections 39 to 44 inserted
39Duties when providing discretionary investment management service to retail clients
40Duty to comply with professional standard of care in providing discretionary investment management service to retail clients
41Need for client agreement with retail client for discretionary investment management services
42Contents, form, and effect of client agreement
43Requirement for agreed investment authority with retail client
44Custodial duties under discretionary investment management service provided to retail client
32Eligibility to be authorised
33FMA must approve or decline application for authorisation
34FMA’s powers in relation to default by authorised financial adviser
35What is broking service
36Other exemptions
37What broker must disclose and form of disclosure
38What is conduct obligation and when does it apply
39Section 77N repealed
40New section 77O substituted
77OBroker must not receive client money if offer contravenes financial markets legislation
41Heading above section 77P substituted
42Broker must pay client money into separate trust account
43Broker must account for client money and client property
44Broker must keep records of client money and client property
45New section 77RA inserted
77RABroker must report on client money and client property
46Restrictions on use of client money and client property
47Protection of client money and client property held on trust
48Content of code
49Section 120 repealed
50Offence of recommending offer of securities when subscription illegal
51Offence of receiving client money if offer for subscription illegal
52Offence of contravening requirement to pay client money into separate trust account
53New section 134EA inserted
134EAOffence of failing to report on client money and client property
54Heading to subpart 4 of Part 4 amended
55Sections 137C to 137J and heading repealed
56Pecuniary order for contravening wholesale certification requirement
57When FMA may make temporary banning orders for financial adviser services or broking services
58Approval of standard conditions for incorporation in authorisations and grants of QFE status
59FMA may grant exemptions
60New section 150 inserted
150Implied provisions
61General regulations
62Principal Act amended
64FMA’s functions
65Power to enter and search place, vehicle, or other thing
66FMA may exercise person’s right of action
67FMA may accept undertakings
68New section 46A inserted
46AUndertaking may include requirements as to compensation or penalties
69New heading and section 48A inserted
48AFMA may appear and be heard and adduce evidence
70FMA may require its warning to be disclosed
71Levy of financial markets participants and other persons registered or incorporated under Acts referred to in Schedule 1
72Schedule 1 amended
73Principal Act amended
76Meaning of provider
78Outline of how people become members of overall KiwiSaver scheme
79Extension of opt-out period
80Sections 24 to 32 and heading repealed
81Employer must also supply investment statement for employer’s chosen KiwiSaver scheme (if any)
82Effect of employer choice of KiwiSaver scheme
83Effect on existing members of change, etc, in employer chosen scheme
84Commissioner provisionally allocates certain people to default KiwiSaver schemes and sends investment statement
85New section 52 substituted
52Effect of completion of allocation
86Notification of transfers and requirement to transfer funds and information
87Involuntary transfers
88Compulsory employer contribution amount: general rule
89De minimis: other contributions and hybrid schemes amount
90Sections 101H to 101K and heading repealed
91Implied provision as to transfer of members, etc
92Part 4 substituted
115Overview of Part
116KiwiSaver scheme rules are implied in trust deeds establishing KiwiSaver scheme
117Duty to give notice to FMA about fee increases
118Exercise of functions by FMA about unreasonable fees
119Powers of High Court in relation to unreasonable fees
120Terms relating to backdated validation implied into trust deeds of KiwiSaver schemes
121Terms relating to members’ tax credits implied into trust deeds of KiwiSaver schemes and complying superannuation funds
122Terms relating to compulsory employer contributions implied into trust deeds of KiwiSaver schemes and complying superannuation funds
123Terms relating to lump sum payments by complying superannuation funds
124Requirement for annual return
125Unclaimed money held in KiwiSaver scheme
126Restrictions on transactions for scheme with fewer than 20 members
127Member’s interest in KiwiSaver scheme not assignable
128Application of Financial Transactions Reporting Act 1996 to default allocation of members to KiwiSaver schemes
129Product disclosure statements must contain responsible investment statement
130Application of Financial Markets Conduct Act 2013
131Certain sections of Financial Markets Conduct Act 2013 modified in relation to KiwiSaver scheme
132Appointment of default providers
133Provisions of instrument of appointment to prevail over provisions of trust deed
134Effect of appointment under section 132
135Appointment must be notified
136Power of High Court to act in respect of terms and conditions of appointment as default KiwiSaver scheme and regulations relating to default KiwiSaver schemes
137Revocations, etc, of instruments of appointment
138Duration of obligations as default provider after terminating event
139Outline of subpart
140Failure to pay: provider notice
141Failure to pay: FMA’s duties
142Failure to pay: Commissioner
143Recovered amounts
144Reduction of scheme insurance upon transfer out of complying superannuation fund
145Revocation of approval of complying superannuation funds
146Effect of being exempt employer and outline of subpart
147Eligibility to continue to be exempt employer
148How 4% minimum amount may be calculated for exempt employer defined contribution schemes
149Exempt employers who provide access to more than 1 scheme
150Exempt employers who have schemes established under master trusts
151Employers may apply to succeed to former employer’s exempt employer status
152How applications to succeed to former employer’s exempt employer status must be dealt with
153Revocation of exempt employer approval
154FMA must give notice to Commissioner of exempt employers
155Register of exempt employers
156Right of appeal against certain decisions of FMA
157Sharing of information and documents with Commissioner for purpose of administering KiwiSaver schemes
158Conditions that may be imposed on providing information, documents, or evidence to Commissioner
159Annual report by FMA
160Offence to supply false or misleading information, etc
161No Crown guarantee of KiwiSaver schemes or products
162Factual description of, or transmission of information about, KiwiSaver scheme not financial adviser service
93Sections 205 to 206 repealed
94Sections 209 and 210 and heading repealed
95Duty of Commissioner under section 50 modified in certain cases in which section 210 applies
96Section 220 substituted
220Special rules about giving of product disclosure statements
97Administration of Act
98Section 225 repealed
99Status of Crown contribution and fee subsidy for tax purposes
100Section 228 substituted
101Regulations relating to default KiwiSaver providers
102Sections 231 to 237 repealed
103Amendments to Schedule 1 (KiwiSaver scheme rules)
104Amendments to Schedule 1 (KiwiSaver scheme rules)
105Amendments to Schedule 1 (KiwiSaver scheme rules)
106Amendments to Schedule 1 (KiwiSaver scheme rules)
107Amendments to Schedule 1 (KiwiSaver scheme rules)
108Further terminology amendments to Schedule 1 (KiwiSaver scheme rules)
109Schedules 2 and 3 repealed
110Principal Act amended
111Name of principal Act changed
112New section 3 substituted
114Heading to Part 2
115Heading to subpart 1 of Part 2
116New section 6 substituted
6Supervisor must be licensed
117New section 7 substituted
7Licensee must comply with conditions imposed on licence
118New section 8 substituted
8Prohibition on holding out
119Requirement to be licensed: exception for certain FMA appointees
120New section 10 substituted
10FMA may license supervisors
121FMA may impose conditions on licence
122Information to be stated in licence
123FMA must send licence and details to licensee and others
124Decision on application for, or to vary, licence
125Application to cancel licence
126Notice, consultation, and submissions concerning decision under section 16(1)
127Appeal to High Court against FMA’s decision on application
128Heading above section 20 amended
129Effect of expiry of licence
130Licensee must apply for new licence or notify issuer or operator before licence expires
131Rejection of application for new licence: FMA may replace existing appointee
132Expiry of licence: issuer or operator may replace existing appointee or FMA appointee
133Expiry of licence: existing appointee must provide documents
134FMA may vary licence because of material change of circumstances, etc
135FMA’s powers if action plan not submitted, etc
136Removal notice
137Removal notice: FMA may give direction to existing appointee
138Removal notice: FMA may replace existing appointee
139Replacement notice: affected person may replace existing appointee or FMA appointee
140Notice requiring documents: existing appointee, etc, must provide documents
141New heading and section 40A inserted
40AFMA appointee has powers and duties of supervisor
142New section 41 substituted
41Pecuniary penalty orders
143Compensation orders
144Part 3 repealed
145FMA may vary or cancel direction
146New section 52 substituted
52Protection for supervisor who complies with FMA’s direction
148FMA may vary licences under Financial Markets Supervisors Act 2011
149Appeal against licence decision
150Amendments to other enactments
Reprint notes

The Parliament of New Zealand enacts as follows: