Regulatory Systems (Commercial Matters) Amendment Bill

Regulatory Systems (Commercial Matters) Amendment Bill

Government Bill

183—1

Explanatory note

General policy statement

This Bill is an omnibus Bill and 1 of a package of 3 omnibus Bills that contain amendments to legislation administered by the Ministry of Business, Innovation, and Employment (the Ministry). This Bill, the Regulatory Systems (Commercial Matters) Amendment Bill, makes amendments in the commerce, consumer affairs, communications, and energy and resources areas. The policy objective of each Bill is to maintain the effectiveness and efficiency of the regulatory systems established by the Acts amended by the Bills and so reduce the chance of regulatory failure. The amendments will achieve this objective by—

  • clarifying and updating statutory provisions in each Act amended to give effect to the purpose of that Act and its provisions; and

  • addressing regulatory duplication, gaps, errors, and inconsistencies within and between different pieces of legislation; and

  • keeping the regulatory system up to date and relevant; and

  • removing unnecessary compliance costs and costs of doing business.

The amendments were identified as part of the Ministry’s regulatory systems work programme, which arises from the chief executive’s responsibility to relevant Ministers, under section 32 of the State Sector Act 1988, for the stewardship of the legislation administered by the Ministry.

The Bills respond to the New Zealand Productivity Commission’s June 2014 report, Regulatory Institutions and Practices. The New Zealand Productivity Commission found that it can be difficult to find time on the Parliamentary calendar for “repairs and maintenance” of existing legislation. As a result, regulatory agencies often have to work with legislation that is out of date or not fit for purpose. This creates unnecessary costs for regulators and regulated parties and means that regimes may not keep up with public or political expectations.

This Bill, the Regulatory Systems (Commercial Matters) Amendment Bill, is a vehicle for these smaller regulatory fixes in the commerce, consumer affairs, communications, and energy and resources areas to be progressed in a timely and cost-effective fashion in order to deliver the flow-on benefits to business and the wider economy. It includes the following amendments:

Building Societies Act 1965 (see subpart 1 of Part 1)

The Building Societies Act 1965 changes will reduce compliance costs and bring the annual returns process for building societies into alignment with the Companies Act 1993.

Commerce Act 1986 (see subpart 2 of Part 1)

The Commerce Act 1986 amendments will improve legal clarity and certainty by clarifying provisions in relation to lay members of the High Court and expenses of the Commerce Commission incurred under multi-year appropriations.

Companies Act 1993 (see subpart 3 of Part 1)

The purpose of the Companies Act 1993 changes is to ensure that the requirements of that Act can be more efficiently and effectively achieved with minimum necessary compliance costs. The changes will remove unnecessary compliance costs in relation to—

  • the provision of information from directors:

  • the preparation of financial statements for companies that are subsidiaries of a body corporate that is required to prepare group financial statements:

  • notification requirements for listed companies.

The changes will increase the effective and efficient operation of the Act in relation to the—

  • registration and removal of overseas companies on the Companies Register:

  • maximum dollar employee priority payment for company liquidations:

  • application of netting agreements to trusts.

Construction Contracts Act 2002 (see Part 4)

This amendment provides that the new requirements that all retention money must be held on trust (which are due to come into force on 31 March 2017) will not apply to contracts entered into before that date.

Energy Efficiency and Conservation Act 2000 (see subpart 1 of Part 3)

The amendment to the Energy Efficiency and Conservation Act 2000 will improve the clarity and certainty of the operation of the Act in relation to certain information that can be incorporated by reference.

Fair Trading Act 1986 (see subpart 4 of Part 1)

The purpose of the Fair Trading Act 1986 amendments is to ensure consistency between regimes and provide clarity in the split of regulatory responsibilities between the Commerce Commission and the Financial Markets Authority (the FMA). The Bill aligns the definition of financial service with the definition in the Financial Markets Conduct Act 2013.

Financial Advisers Act 2008 (see subpart 5 of Part 1)

The purpose of the change to the Financial Advisers Act 2008 is to improve the operation of that Act by providing the FMA with an effective means of collecting fines.

Financial Markets Authority Act 2011 (see subpart 6 of Part 1)

The amendment to the Financial Markets Authority Act 2011 facilitates the FMA’s investigation and prosecution of contraventions by financial markets participants. The Bill adds the Secret Commissions Act 1910 to the list of financial markets legislation that the FMA is able to enforce.

Financial Markets Conduct Act 2013 (see subpart 7 of Part 1)

Minor changes to the Financial Markets Conduct Act 2013 are proposed. The changes have been identified during the implementation of that Act and will help ensure that the policy of the Act is efficiently and effectively achieved with minimum compliance costs. The Bill—

  • removes a minor inconsistency between the licensing test for applicants and the test for authorising a related body corporate:

  • empowers the FMA to make exemptions from subpart 8 of Part 8 of the Act, which contains prohibitions on indemnity and insurance that may not be appropriate in all circumstances:

  • allows financial statements for a registered scheme to be filed within 4 months of the scheme’s balance date (rather than the scheme manager’s balance date):

  • clarifies that standard indemnities do not prevent transfers of financial products continuing to be made without a signature from the transferee:

  • allows discretionary investment management service providers and prescribed intermediary service providers (crowd funding and peer-to-peer lending service providers) to continue providing services where defective disclosure has been made, subject to prescribed conditions:

  • shifts some matters currently dealt with in regulations to the Act and vice versa, clarifies the relationship between the Act and regulations, and adjusts some regulation-making powers to ensure that the policy intent can be achieved:

  • removes minor inconsistencies between some provisions and clarifies others.

Financial Service Providers (Registration and Dispute Resolution) Act 2008 (see subpart 8 of Part 1)

The change to the Financial Service Providers (Registration and Dispute Resolution) Act 2008 ensures the integrity of the register of financial service providers by ensuring that the Registrar of Financial Service Providers has the power to initiate deregistration of a financial service provider where the provider is not, but should be, a member of a dispute resolution scheme.

Friendly Societies and Credit Unions Act 1982 (see subpart 9 of Part 1)

The Friendly Societies and Credit Unions Act 1982 amendments are intended to improve the efficiency and effectiveness of that Act. The Bill promotes innovation, efficiency, and accountability and removes unnecessary operating and compliance costs by allowing friendly societies and credit unions to use electronic and postal voting for general and special resolutions.

Gas Act 1992 (see subpart 2 of Part 3)

The purpose of the amendments to the Gas Act 1992 is to provide certainty by addressing a regulatory error in relation to the definition of gas distributor. The Bill will give the Minister of Consumer Affairs responsibility for recommending exemptions under the Gas Act 1992 from the requirement to belong to the electricity and gas consumer complaint scheme, as the Minister responsible for the scheme under the Electricity Industry Act 2010.

Insolvency Act 2006 (see subpart 10 of Part 1)

The purpose of the Insolvency Act 2006 amendments is to ensure the requirements of that Act can be more efficiently achieved with minimum necessary compliance costs in relation to the functions of the Official Assignee.

New Zealand Superannuation and Retirement Income Act 2001 (see subpart 11 of Part 1)

The purpose of the amendment to the New Zealand Superannuation and Retirement Income Act 2001 is to ensure that the Act accurately reflects the work of the Retirement Commissioner in relation to work on financial capability and other functions as directed by the Minister of Commerce under the Crown Entities Act 2004.

Postal Services Act 1998 (see Part 2)

The purpose of the amendments to the Postal Services Act 1998 is to change the definition of letter in that Act to ensure that it is aligned with the increased cost of postage over time, and to clarify that courier services are not regulated by that Act.

Takeovers Act 1993 (see subpart 12 of Part 1)

The purpose of the Takeovers Act 1993 amendments is to ensure that timely and cost-effective decisions are made in relation to takeovers code company takeover expense-related disputes.

Departmental disclosure statement

The Ministry of Business, Innovation, and Employment is required to prepare a disclosure statement to assist with the scrutiny of this Bill. The disclosure statement provides access to information about the policy development of the Bill and identifies any significant or unusual legislative features of the Bill.

Regulatory impact statement

The Ministry of Business, Innovation, and Employment produced a regulatory impact statement on 23 May 2014 to help inform 3 policy decisions taken by the Government relating to the contents of Part 1 of this Bill.

Minister of Finance’s statement on consultation process followed in formulation of amendment to New Zealand Superannuation and Retirement Income Act 2001

Section 73 of the New Zealand Superannuation and Retirement Income Act 2001 (the Act) provides that the Minister must, on the introduction into the House of Representatives of a Government Bill that proposes an amendment to the Act, bring to the attention of the House the consultation process that was followed in the formulation of the proposed amendment.

This Bill proposes amendments to Part 4 of the Act. The Bill proposes to amend section 83 to confer additional functions on the Retirement Commissioner.

In preparing the Bill, consultation occurred with, and agreement was gained from, the Retirement Commissioner, the Treasury, and the State Services Commission.

The Bill does not propose to amend Part 1 or Part 2 of the Act, so no consultation was undertaken with the parties in Parliament that are in agreement with those Parts (as listed in Schedule 4 of the Act).

The Bill does not propose to amend Part 2 of the Act, so no consultation was undertaken with the Guardians of New Zealand Superannuation.

Clause by clause analysis

Clause 1 is the Title clause.

Clause 2 relates to commencement. The following come into force on the day after the date of Royal assent:

  • subpart 12 of Part 1 and Schedule 2 (which relate to the Takeovers Act 1993):

  • clauses 133 and 134 (which relate to the Gas Act 1992).

Part 4 (which relates to the Construction Contracts Act 2002) comes into force on 31 March 2017.

Subpart 7 of Part 1 (which relates to the Financial Markets Conduct Act 2013) comes into force 1 year after Royal assent or an earlier date appointed by Order in Council (once necessary preparations have been made for compliance with the new provisions).

Clause 8 (which relates to levies under section 53ZE of the Commerce Act 1986) comes into force on 1 July 2019.

The remaining provisions come into force 2 months after Royal assent.

Part 1Commerce and consumer affairs

Subpart 1—Building Societies Act 1965

Clause 3 provides that subpart 1 amends the Building Societies Act 1965.

Clause 4 amends section 103, which requires building societies to make annual returns. The amendments provide for an annual return to be signed by the manager or secretary of the building society and 1 other person who is authorised by its directors and who is a director, a qualified statutory accountant, or a lawyer.

Clause 5 repeals section 104, which currently requires certain information about loans or other investments to certain officers or companies to be included in a building society’s annual return.

Subpart 2—Commerce Act 1986

Clause 6 provides that subpart 2 amends the Commerce Act 1986.

Clause 7 repeals section 6C, which is spent.

Clause 8 amends section 53ZE, which relates to levies that are imposed on suppliers of regulated goods and services to cover the Commerce Commission’s costs of performing its functions under Part 4 of the Act. The amendments permit a levy to be set, in relation to costs covered by a multi-year appropriation, for the financial years to which the multi-year appropriation applies.

Clause 9 amends section 77, which relates to the appointment of lay members of the High Court for the purposes of the High Court’s jurisdiction under the Act. The amendment clarifies the purposes for which lay members must be appointed.

Subpart 3—Companies Act 1993

Clause 10 provides that subpart 3 amends the Companies Act 1993.

Clause 11 makes an amendment to section 3 that is related to the amendment made by clause 29.

Clause 12 inserts a provision about transitional provisions (new section 8A) and clause 32 inserts new Schedule 1AA relating to those transitional provisions. The transitional provisions relate to the amendments to financial reporting and annual report requirements.

Clause 13 amends section 10, which requires at least 1 of the directors of a company to live in New Zealand or to live in an enforcement country and be a director of a company incorporated in that enforcement country. The amendment clarifies the wording of the requirement to be a director of a company incorporated in an enforcement country.

Clause 14 amends section 12, which sets out requirements for an application for registration of a company. The amendments clarify what information must be provided in cases where none of the directors of the proposed company live in New Zealand.

Clause 15 amends section 80, which sets out requirements in relation to the giving by a company of financial assistance to a person for the purposes of the purchase of shares issued by the company. The amendments modify the requirement that the company give notice of the financial assistance to its shareholders for cases where the company’s shares are quoted on a licensed market. The notice must be given to the licensed market operator instead.

Clause 16 amends section 120, which requires an annual meeting of shareholders to be held. The amendments provide that a meeting does not have to be held if there is nothing required to be done at the meeting, the board resolves that it is in the interests of the company to rely on new subsection (5), and the constitution of the company does not require the meeting to be held. Clause 25 amends section 209 as a consequence of the amendment to section 120.

Clause 17 amends section 122, which provides for another situation in which an annual meeting is not required (namely, where everything required to be done at the meeting is done by resolution). The amendment clarifies that new section 120(5) does not limit this other situation in which a meeting is not required.

Clause 18 amends section 200, which places requirements on certain companies to prepare financial statements. The amendment clarifies how those requirements apply to a company that is a subsidiary of another company. A company is not required to prepare financial statements if it is a subsidiary of a New Zealand or an overseas company and financial statements for that group are prepared.

Clause 19 amends section 202, which currently provides that group financial statements are not required if the company is a subsidiary of a New Zealand company and financial statements for the group of that New Zealand company are prepared. The amendment extends the provision to cover situations in which the company is a subsidiary of an overseas company.

Clauses 20, 21, and 23 amend sections 203, 206, and 207E as a consequence of the amendments made by clauses 18, 19, and 22.

Clause 22 amends section 207D, which provides for the registration of financial statements. The section currently provides that financial statements are not required to be registered if the company is a subsidiary of a New Zealand company and financial statements for the group of that New Zealand company are registered (or lodged under another Act). The amendment extends the provision to cover situations in which the company is a subsidiary of an overseas company.

Clause 24 amends section 208, which imposes an obligation to prepare an annual report. The amendment provides that the requirement does not apply to a large company if it is not required to prepare financial statements and shareholders who together hold at least 95% of the voting shares agree that the annual report need not be prepared.

Clause 26 replaces section 231 to clarify that any variation of a compromise approved under Part 14 of the Act must be notified to the Registrar of Companies (the Registrar).

Clauses 27 and 28 amend sections 239AEJ and 310D to provide a rule for determining, in the context of bilateral netting agreements, whether there are mutual credits, mutual debts, or other mutual dealings in relation to transactions involving trustees.

Clause 29 amends section 341 to enable the Registrar to remove an overseas company from the overseas register if satisfied that the company has ceased to carry on business in New Zealand.

Clause 30 amends section 342 as a consequence of the amendments made to section 341.

Clauses 31 and 34 make amendments to section 395 and Schedule 4 that relate to the amendments made by clauses 13, 14, and 16.

Clause 33 amends Schedule 1, which relates to proceedings at meetings of shareholders. The amendment relates to when postal votes that are cast using electronic means must be received.

Clause 35 amends Schedule 7 to make a minor amendment in relation to the Governor-General’s power by Order in Council to adjust the sum set out in clause 3(1) of that schedule.

Subpart 4—Fair Trading Act 1986

Clause 36 provides that subpart 4 amends the Fair Trading Act 1986.

Clause 37 amends section 15, which relates to the limited application of sections 9 to 14 to the news media. The amendment replaces references to the Broadcasting Act 1976 with references to the Broadcasting Act 1989.

Clause 38 amends section 48P, which relates to proceedings concerning financial products or financial services under the Fair Trading Act 1986. The provision requires the Commerce Commission, before commencing those proceedings, to obtain the consent of the FMA. The amendment aligns the definition of financial service in section 48P with the definition in the Financial Markets Conduct Act 2013.

Subpart 5—Financial Advisers Act 2008

Clause 39 provides that subpart 5 amends the Financial Advisers Act 2008.

Clause 40 amends section 101 to clarify that a fine imposed on a financial adviser under that section by a disciplinary committee is recoverable as a debt due to the FMA.

Subpart 6—Financial Markets Authority Act 2011

Clause 41 provides that subpart 6 amends the Financial Markets Authority Act 2011.

Clause 42 amends Part 2 of Schedule 1 to bring the Secret Commissions Act 1910 within the jurisdiction of the FMA.

Subpart 7—Financial Markets Conduct Act 2013

Clause 43 provides that subpart 7 amends the Financial Markets Conduct Act 2013.

Clause 44 amends various definitions in section 6(1) as a consequence of other changes made by this subpart.

Clause 45 amends section 13(1) to ensure that it applies to both the Act and regulations made under the Act. Section 13(1) is an interpretation provision relating to references to information that is false, misleading, deceptive, or confusing.

Clause 46 amends section 95, which requires an issuer to notify certain changes within 5 working days of becoming aware of the change. The amendment allows regulations to prescribe a different period within which the change must be notified.

Clause 47 amends section 96, which requires an issuer to disclose prescribed information to prescribed persons (for example, investors). The amendment changes the heading of the section to reflect the fact that a prescribed person could be the Registrar of Financial Service Providers (the Registrar) or the FMA. Clause 84 amends the associated regulation-making power in section 543 to also refer to the Registrar or the FMA.

Clause 48 amends section 97, which requires an issuer to make information publicly available. The amendment provides for an infringement offence where the information is to be made publicly available by lodging the information with the Registrar.

Clause 49 amends section 101 (which specifies Part 3 offer provisions for the purposes of establishing civil liability). Currently, all contraventions of the limited disclosure and other requirements under clause 26 of Schedule 1 may result in the higher level of civil liability under section 101(3). Section 101 is amended to provide more flexibility to allow regulations to specify which provisions of the regulations made for the purposes of clause 26 of Schedule 1 are Part 3 offer provisions and, if a provision is so specified, whether it may result in the higher level of civil liability under section 101(3) or the lower level of civil liability under section 101(4).

Clause 50 amends section 131 (which relates to additional ongoing registration requirements for restricted schemes) to correct a minor error.

Clause 51 amends section 134 (which relates to changes to the registration of a registered scheme). Currently, the provision refers to a certificate from the supervisor or the trustees of a restricted scheme. Restricted schemes are only one situation in which there may not be a supervisor (another example could be where the FMA has granted an exemption from supervisor requirements). The provision has been amended to provide more flexibility to cover other cases where the scheme does not have a supervisor. Similar changes have been made to sections 147, 149, 165, 173, 195, 212, and 213 (see clauses 52 to 54, 56, and 58 to 60).

Clause 55 adjusts the meaning of a pricing error in section 168 so that it refers to the price at which managed investment products are issued (rather than transferred).

Clause 57 amends section 178 (which relates to the application of scheme participant transfer rules) to correct a minor error.

Clause 61 amends section 217, which specifies the required content of registers of regulated products. The amendment allows information to be excluded in circumstances that are prescribed in the regulations. Clause 85 amends the associated regulation-making power in section 544. Clause 87 amends section 550 to ensure that the procedural requirements specified in that section for regulations relating to exemptions apply to this new power.

Clause 62 amends section 228 (which lists the provisions of Part 4 that give rise to civil liability) to include a reference to section 219. Section 219 requires an auditor to advise the FMA and product holders if the auditor considers that requirements relating to registers of products are not being complied with. The amendment means that a breach of this duty by an auditor can give rise to civil liability.

Clause 64 amends section 314 (which relates to general obligations in respect of licensed markets). The amendment extends the obligation relating to the notification of disclosures to include various disclosures made under the Act, the regulations, or other enactments.

Clause 65 amends section 351, which provides for regulations to modify requirements for licensed markets. The section already provides that regulations can provide that a financial product market must not be treated as a licensed market. The power is extended to allow regulations to provide that issuers of a specified class must not be treated as listed issuers and financial products in specified circumstances must not be treated as quoted.

Clause 66 amends section 372, which provides for the transfer of financial products by a products transfer. The section currently does not apply if the products impose a liability to the issuer on the transferee. This requirement has been amended to clarify that the liability referred to does not include an indemnity.

Clause 67 amends section 397, which imposes procedural requirements relating to the issue of market services licences. The amendment adds a requirement for the FMA to make the licensing decision in the prescribed manner.

Clause 68 amends section 400, which provides for a market services licence to cover a related body corporate of the licensee if the FMA is satisfied of certain matters. The amendment aligns the wording of this test with the wording in section 396 (the test for when the licence must be issued).

Clauses 69 to 71 extend the requirements in section 427 (which relates to defective disclosure). Section 427 currently relates only to initial disclosure statements under Part 6. The amendments extend this provision to cover defective ongoing disclosure under new section 426A. In addition, clause 82 amends section 511 to extend the offence in that section relating to defective disclosure to cover defective ongoing disclosure under new section 426A.

In addition, section 427 is amended to allow the service to continue to be provided where defective disclosure has been made. However, the service must not be provided in the circumstances prescribed by the regulations, and the service provider must comply with the prescribed conditions. Further, the service provider must provide to the investor a new disclosure statement that is not defective. Consequential changes are made to sections 449, 499, 500, 501, and 511 in clauses 73, 78, 79, 80, and 82.

Clause 72 amends section 448, which provides for regulations concerning the holding and application of investor funds and property by derivatives issuers. The amendment ensures that the regulations can relate to money or property received on account of investors (as well as money or property received directly from investors).

Clauses 74 and 75 amend sections 461A and 461H, which relate to the financial statements of registered schemes. The amendments ensure that the specified time frames for compliance refer to the balance date of the scheme rather than the balance date of the manager.

Clause 76 amends section 461K (which relates to FMC reporting entities that are considered to have a higher level of public accountability) to correct a minor error.

Clause 81 inserts, in new section 501A, a new defence in respect of civil liability proceedings. The defence applies where an authorised body contravenes a market services licensee obligation and the licensee is treated as being in contravention under section 400(3). In this case, the licensee has a defence if it proves that it took all reasonable and proper steps to ensure that the authorised body complied with the obligation.

Clause 84 amends section 543 (which is the regulation-making power for the purposes of Part 3 of the Act). The amendments are mainly as a consequence of other changes made by this subpart (for example, in relation to clause 26 of Schedule 1 of the Act). In addition, new section 543(3) clarifies that disclosure under section 96 or 97 can be required at any time after an offer is first made (regardless of whether the products have been issued).

Clause 85 amends section 544 (which is the regulation-making power for the purposes of Part 4 of the Act). The amendments are as a consequence of other changes made by this subpart (for example, in relation to section 217).

Clause 86 amends section 546 (which is the regulation-making power for the purposes of Part 6 of the Act). The amendments are as a consequence of other changes made by this subpart (for example, in relation to new section 426A and section 427).

Clause 88 amends section 556 to extend the FMA’s exemption-granting power under that section to cover subpart 8 of Part 8 (in addition to Parts 2 to 7, the schedules, and the regulations). Subpart 8 of Part 8 contains restrictions on indemnities or insurance for directors, employees, and auditors of issuers, offerors, and licensees.

Clause 89 amends Schedule 1 (which relates to when disclosure is required and exclusions for offers). The changes include—

  • amending clause 8 of Schedule 1 (which contains an exclusion for employee share purchase schemes). The amendment clarifies how a calculation for the purposes of the exclusion is carried out:

  • amending clause 19 of Schedule 1 (which contains an exclusion for quoted financial products). The amendment extends the exclusion to cover options to acquire quoted financial products:

  • amending clause 26 of Schedule 1 (which requires offerors that rely on an exclusion to comply with limited disclosure and other prescribed requirements). The amendments clarify that requirements may include—

    • a requirement to provide prescribed information to the investor or another prescribed person:

    • a requirement to ensure that all prescribed limits or restrictions (if any) applying to the offer, the financial products, or the investors are met:

  • amending clause 26 of Schedule 1 to refer to a limited disclosure document or LDD. This ensures consistency with the terminology used in the Financial Markets Conduct Regulations 2014 (see also consequential changes in clauses 44, 63, 77, 82(4), 83, and 84(1)):

  • amending clause 26 of Schedule 1 to provide for requirements to be imposed on an issuer (where the offeror is not the issuer under an offer by way of sale):

  • extending clauses 27 and 28 of Schedule 1 to cover the register entry as well as the limited disclosure document. Clause 27 relates to false or misleading statements in, or omissions from, disclosure that is made available to investors. Clause 28 requires certain persons to inform the offeror of defects in that disclosure:

  • inserting a new offence in new clause 28A of Schedule 1 relating to a failure to lodge or give information to the Registrar or the FMA when required to do so under clause 26.

Clause 90 amends clause 13 of Schedule 2 (which provides for the lodging of documents with the Registrar) to confirm that it applies whether the requirement to lodge the document is specified in the Act or the regulations.

Clause 91 amends Schedule 4 (which contains transitional and savings provisions). The amendments relate to certain transitional and savings provisions in the Financial Markets Conduct Regulations 2014. Under section 547(4), those provisions would be automatically revoked on the date that is 5 years after the commencement of section 547 (14 September 2018). However, the effect of some of those provisions needs to continue after that date. The effect of the amendments to Schedule 4 is to preserve the ongoing effect of those provisions.

Clause 92 amends the Financial Markets (Repeals and Amendments) Act 2013 to correct a minor error in a consequential amendment.

Subpart 8—Financial Service Providers (Registration and Dispute Resolution) Act 2008

Clause 93 provides that subpart 8 amends the Financial Service Providers (Registration and Dispute Resolution) Act 2008.

Clause 94 amends section 18 to require the Registrar of Financial Service Providers to deregister a financial service provider if satisfied that the provider is not a member of an approved dispute resolution scheme as required.

Subpart 9—Friendly Societies and Credit Unions Act 1982

Clause 95 provides that subpart 9 amends the Friendly Societies and Credit Unions Act 1982.

Clauses 96 to 99 amend sections 28, 49, 50, and 82 to clarify that members of societies registered under Part 2 of the Act do not necessarily have to be present at a meeting for the purpose of voting on matters considered at the meeting. These amendments relate to the amendment made by clause 100.

Clause 100 inserts new sections 147A and 147B. New section 147A clarifies that the rules of a society registered under Part 2 of the Act or the rules of a credit union may provide for meetings to be held using audio, audio and visual, or electronic communication. New section 147B clarifies that the rules of a society registered under Part 2 of the Act or the rules of a credit union may permit voting by its members by post or electronic means or by proxy.

Subpart 10—Insolvency Act 2006

Clause 101 provides that subpart 10 amends the Insolvency Act 2006.

Clause 102 amends section 228, which requires the Assignee to prepare a final statement of receipts and payments at the completion of the bankruptcy process. The amendment removes the requirement for the statement to be published and makes other minor adjustments.

Clause 103 amends section 258 to provide a rule for determining, in the context of bilateral netting agreements, whether there are mutual credits or mutual debts in relation to transactions involving trustees.

Clause 104 replaces section 348 to extend the circumstances in which the Assignee may terminate the appointment of the supervisor of a summary instalment order.

Clause 105 makes amendments to section 350 that are related to the amendment made by clause 106.

Clause 106 inserts new section 350A to give the Assignee a new power to cancel a summary instalment order in certain circumstances. Clauses 107 and 108 make related amendments to sections 352 and 355.

Clause 109 repeals section 365, which requires the Assignee to send a summary of a debtor’s assets and liabilities to each known creditor if the debtor applies for entry to the no asset procedure. Clause 110 makes a related amendment to section 367.

Clause 111 amends section 408 to clarify that the Assignee is not obliged to apply to the court for a release order at the end of the bankruptcy process.

Clause 112 repeals section 441(1)(i) in consequence of clause 102.

Clause 113 amends Schedule 1 to clarify that the Assignee has the power to challenge the existence or terms of a trust, even if the bankrupt could not have done so and even if the bankrupt is a settlor, trustee, or beneficiary of the trust.

Clause 114 amends the Insolvency (Personal Insolvency) Regulations 2007 in consequence of the amendment made by clause 102.

Subpart 11—New Zealand Superannuation and Retirement Income Act 2001

Clause 115 provides that subpart 11 amends the New Zealand Superannuation and Retirement Income Act 2001.

Clause 116 amends section 83 to confer additional functions on the Retirement Commissioner.

Subpart 12—Takeovers Act 1993

Clause 117 provides that subpart 12 amends the Takeovers Act 1993. Currently, under the takeovers code, a director of a target company or a target company itself may recover expenses that the director or target company incurs in connection with a takeover offer. The amendments made by this subpart move this entitlement into the Act and give the Takeovers Panel the function of determining the amount of expenses that are recoverable if the parties in question cannot agree the expenses.

Clause 127 amends the Takeovers Code Approval Order 2000 to remove from the takeovers code the entitlement to recover expenses referred to above.

Clause 128 amends the Takeovers (Fees) Regulations 2001 to allow fees to be charged for applications to the Takeovers Panel for a determination.

Part 2Communications

Clause 129 provides that Part 2 amends the Postal Services Act 1998.

Clause 130 replaces the definition of letter in section 2 and inserts a definition of courier services. The changes are that—

  • a letter is no longer defined by reference to a maximum charge that is made for carrying, taking charge of, or sending it. Instead, it is defined by reference to maximum dimensions and weight. In addition, an article that is sent by courier service (regardless of its dimensions or weight) will not be a letter as defined in the Act:

  • an article is sent by courier service if the sender requests delivery by courier and the delivery of the article is tracked and expedited.

Clause 130 also inserts a new section 2(2A). New section 2(2A) has the effect of clarifying that if a registered postal operator offers a courier service, articles that are to be conveyed or delivered by that service (at the request of the sender) will not be postal articles under the Act, and as such will not be subject to the various provisions of the Act that apply in relation to the posting and delivery of postal articles (eg, provisions that relate to detention, opening, and examination of postal articles and that create offences).

Part 3Energy and resources

Subpart 1—Energy Efficiency and Conservation Act 2000

Clause 131 provides that subpart 1 amends the Energy Efficiency and Conservation Act 2000.

Clause 132 repeals section 37, which relates to incorporation of material by reference.

Subpart 2—Gas Act 1992

Clause 133 provides that subpart 2 amends the Gas Act 1992.

Clause 134 replaces the definition of gas distributor. The amendments made by the Gas Amendment Act 2012 linked the definition to line function services supplied by means of a distribution system. The replaced definition in this Bill ensures that line function services supplied by any other means (eg, by gas transmission pipelines) are also covered by the definition.

Clause 135 enables the Minister of Consumer Affairs, rather than the Minister of Energy and Resources, to recommend regulations exempting any class of industry participants from the need to be a member of the dispute resolution scheme. Currently, the Gas Act 1992 contains powers for the Minister of Consumer Affairs to issue individual exemption notices.

Clause 136 relates to the previous amendment. Regulations exempting any class of industry participants from the need to be a member of the dispute resolution scheme will cease to be gas governance regulations made under section 43S of the Gas Act 1992.

Part 4Building and housing

Clause 137 provides that Part 4 amends the Construction Contracts Act 2002.

Clause 138 provides that the new requirements that all retention money must be held on trust (which are due to come into force on 31 March 2017) will not apply to contracts entered into before that date.

Hon Steven Joyce

Regulatory Systems (Commercial Matters) Amendment Bill

Government Bill

183—1

Contents

Explanatory note
1Title
2Commencement
3Principal Act
4Section 103 amended (Duty to make annual return)
5Section 104 repealed (Annual return to disclose loans or other investments to certain officers or companies)
6Principal Act
7Section 6C repealed (Application of Evidence Amendment Act 1980)
8Section 53ZE amended (Levies)
9Section 77 amended (Additional lay members of High Court for purposes of appellate jurisdiction in respect of Commission determinations)
10Principal Act
11Section 3 amended (Public notice)
12New section 8A inserted (Transitional, savings, and related provisions)
8ATransitional, savings, and related provisions
13Section 10 amended (Essential requirements)
14Section 12 amended (Application for registration)
15Section 80 amended (Financial assistance not exceeding 5% of shareholders’ funds)
16Section 120 amended (Annual meeting of shareholders)
17Section 122 amended (Resolution in lieu of meeting)
18Section 200 amended (Application of preparation provisions)
19Section 202 amended (Group financial statements must be prepared)
20Section 203 amended (Recognition of financial reporting requirements of overseas countries)
21Section 206 amended (Application of audit requirement)
22Section 207D amended (Application of registration provisions)
23Section 207E amended (Financial statements must be registered)
24Section 208 amended (Obligation to prepare annual report)
25Section 209 amended (Obligation to make annual report available to shareholders)
26Section 231 replaced (Variation of compromise)
231Variation of compromise
27Section 239AEJ amended (Mutuality required for transactions under bilateral netting agreements)
28Section 310D amended (Mutuality required for transactions under bilateral netting agreements)
29Section 341 amended (Overseas company ceasing to carry on business in New Zealand)
30Section 342 amended (Liquidation of overseas company)
31Section 395 amended (Regulations)
32New Schedule 1AA inserted
33Schedule 1 amended
34Schedule 4 amended
35Schedule 7 amended
36Principal Act
37Section 15 amended (Limited application of sections 9 to 14 to news media)
38Section 48P amended (Proceedings relating to financial products or financial services)
39Principal Act
40Section 101 amended (Disciplinary committee may discipline authorised financial adviser for breach of code)
41Principal Act
42Schedule 1 amended
43Principal Act
44Section 6 amended (Interpretation)
45Section 13 amended (Miscellaneous interpretation provisions relating to statements and information)
46Section 95 amended (Duty to notify changes to Registrar)
47Section 96 amended (Information to be made available to investors or other prescribed persons)
48Section 97 amended (Information to be made publicly available)
49Section 101 amended (Part 3 offer provisions)
50Section 131 amended (Additional ongoing registration requirements for restricted schemes)
51Section 134 amended (Changes to registration as particular type of registered scheme)
52Section 147 amended (Duty of manager to provide reports to supervisor or FMA)
53Section 149 amended (Duty of manager to report contravention or possible contravention of issuer obligations)
54Section 165 amended (Changes to statement of investment policy and objectives)
55Section 168 amended (Action that must be taken on pricing errors and failure to comply with pricing methodologies)
56Section 173 amended (General prohibition on transactions giving related party benefits)
57Section 178 amended (Application of scheme participant transfer rules)
58Section 195 amended (Cancellation of registration)
59Section 212 amended (Initial steps in winding up of registered scheme)
60Section 213 amended (Winding-up report)
61Section 217 amended (Contents of registers)
62Section 228 amended (Part 4 governance provisions)
63Section 247 amended (Exception for disclosure in connection with preparing PDS or disclosure document)
64Section 314 amended (General obligations in respect of licensed markets)
65Section 351 amended (Regulations modifying this Part or Part 7 for licensed markets)
66Section 372 amended (Transfer of specified financial products by products transfer)
67Section 397 amended (Procedural requirements)
68Section 400 amended (Licence may cover related bodies corporate as authorised bodies)
69New section 426A inserted (Further prescribed information to be made available)
426AFurther prescribed information to be made available
70Section 427 replaced (False or misleading statements and omissions)
427False or misleading statements and omissions
71Section 428 replaced (Further prescribed information to be made available)
428Miscellaneous provisions relating to false or misleading statements and omissions
72Section 448 amended (Regulations regulating holding and application of investor funds and property by derivatives issuers)
73Section 449 amended (Part 6 services provisions)
74Section 461A amended (Financial statements for registered schemes and funds)
75Section 461H amended (Lodgement of financial statements)
76Section 461K amended (FMA reporting entities considered to have higher level of public accountability)
77Section 462 amended (When FMA may make stop orders)
78Section 499 amended (General defences for person in contravention)
79Section 500 amended (Disclosure defences for person in contravention)
80Section 501 amended (Additional disclosure or financial reporting defence for directors who are treated as contravening)
81New section 501A inserted (Additional defence for licensees who are treated as contravening)
501AAdditional defence for licensees who are treated as contravening
82Section 511 amended (Offence of knowingly or recklessly contravening other provisions relating to defective disclosure)
83Section 534 amended (Directors treated as having contravened in case of defective disclosure or financial reporting contravention)
84Section 543 amended (Regulations for purposes of Part 3 (Disclosure of offers of financial products))
85Section 544 amended (Regulations for purposes of Part 4 (governance of financial products))
86Section 546 amended (Regulations for purposes of Part 6 (market services))
87Section 550 amended (Procedural requirements for regulations relating to exemptions, exclusions, and definitions)
88Section 556 amended (FMA may grant exemptions)
89Schedule 1 amended
90Schedule 2 amended
91Schedule 4 amended
92Amendment to Financial Markets (Repeals and Amendments) Act 2013
93Principal Act
94Section 18 amended (Deregistration of financial service provider)
95Principal Act
96Section 28 amended (Appointment of trustees)
97Section 49 amended (Duties of trustees in relation to investments)
98Section 50 amended (Trustees of society may make investments for branch, etc)
99Section 82 amended (Special resolutions)
100New sections 147A and 147B inserted
147AMeetings may be held using audio, audio and visual, or electronic communication
147BPostal, electronic, and proxy voting
101Principal Act
102Section 228 amended (Assignee’s final statement of receipts and payments)
103Section 258 amended (Mutuality required for transactions under bilateral netting agreements)
104Section 348 replaced (Termination of appointment for failure to supervise adequately)
348Termination of supervisor’s appointment
105Section 350 amended (Variation or discharge of order)
106New section 350A inserted (Cancellation of order by Assignee without application)
350ACancellation of order by Assignee without application
107Section 352 amended (Proceedings against debtor)
108Section 355 amended (Meaning of current summary instalment order)
109Section 365 repealed (Assignee must notify creditors)
110Section 367 amended (When debtor admitted to no asset procedure)
111Section 408 amended (Assignee must apply for order of release)
112Section 441 amended (Regulations)
113Schedule 1 amended
114Amendment to Insolvency (Personal Insolvency) Regulations 2007
115Principal Act
116Section 83 amended (Functions)
117Principal Act
118Section 2 amended (Interpretation)
119New section 2B inserted (Transitional, savings, and related provisions)
2BTransitional, savings, and related provisions
120Section 8 amended (Functions of Panel)
121Section 18 amended (Further provisions applying to Panel)
122Section 44Q replaced (Jurisdiction of courts in New Zealand)
44QJurisdiction of courts in New Zealand
123New cross-heading above section 45 inserted
124Section 49 replaced (Repeal of Companies Amendment Act 1963)
47Interpretation for sections 48 to 53
48Reimbursement of directors
49Reimbursement of target company
50Determinations by Panel of amount to be reimbursed
51Appeals against Panel’s determination
52Enforcement of agreement of amount to be reimbursed
53Enforcement of Panel’s order for payment of amount to be reimbursed
125New Schedule 1AA inserted
126Schedule amended
127Amendment to Takeovers Code Approval Order 2000
128Amendment to Takeovers (Fees) Regulations 2001
129Principal Act
130Section 2 amended (Interpretation)
131Principal Act
132Section 37 repealed (Incorporation of material by reference)
133Principal Act
134Section 2 amended (Interpretation)
135Section 43EA amended (Membership of dispute resolution scheme)
136Section 43S amended (Supplementary empowering provision for regulations and rules)
137Principal Act
138Section 11A amended (Application of this Act: savings provisions relating to Construction Contracts Amendment Act 2015)

The Parliament of New Zealand enacts as follows:

1 Title

This Act is the Regulatory Systems (Commercial Matters) Amendment Act 2016.

2 Commencement

(1)

This Act comes into force immediately after the expiry of the 2-month period that starts on the date of Royal assent, except as set out in subsections (2) to (6).

(2)

The following provisions come into force on the day after the date of Royal assent:

(a)

subpart 12 of Part 1:

(b)

sections 133 and 134:

(c)

Schedule 2.

(3)

Part 4 comes into force on 31 March 2017.

(4)

Subpart 7 of Part 1 comes into force on a date appointed by the Governor-General by Order in Council, and 1 or more orders may be made bringing different provisions into force on different dates.

(5)

However, any provision of subpart 7 of Part 1 that is not already in force on the first anniversary of the date of Royal assent comes into force then.

(6)

Section 8 comes into force on 1 July 2019.

Part 1 Commerce and consumer affairs

Subpart 1—Building Societies Act 1965

3 Principal Act

This subpart amends the Building Societies Act 1965 (the principal Act).

4 Section 103 amended (Duty to make annual return)

(1)

In section 103(2), delete “, and must be signed by 2 of the directors and by the manager or secretary of the society”.

(2)

After section 103(2), insert:

(2A)

The annual return must be signed by—

(a)

the manager or secretary of the society; and

(b)

a second person who is authorised to sign by the directors of the society and who is any of the following:

(i)

a director of the society:

(ii)

a qualified statutory accountant (as defined in section 5(1) of the Financial Reporting Act 2013):

(iii)

a lawyer (as defined in section 6 of the Lawyers and Conveyancers Act 2006).

5 Section 104 repealed (Annual return to disclose loans or other investments to certain officers or companies)

Repeal section 104.

Subpart 2—Commerce Act 1986

6 Principal Act

This subpart amends the Commerce Act 1986 (the principal Act).

7 Section 6C repealed (Application of Evidence Amendment Act 1980)

Repeal section 6C.

8 Section 53ZE amended (Levies)

(1)

In section 53ZE(2)(a), after “costs”, insert “for an appropriation period”.

(2)

In section 53ZE(2)(e), replace “financial year” with “appropriation period” in each place.

(3)

In section 53ZE(2)(g), replace “financial year” with “appropriation period”.

(4)

In section 53ZE(2)(g)(i), replace “year” with “period”.

(5)

In section 53ZE(2)(h), replace “a financial year or part financial year” with “an appropriation period or a part appropriation period”.

(6)

In section 53ZE(2)(h), replace “that financial year” with “that appropriation period”.

(7)

After section 53ZE(2), insert:

(2A)

In subsection (2), appropriation period, in relation to any estimated costs, means—

(a)

a financial year; or

(b)

if the estimated costs will be incurred under the authority of a multi-year appropriation or of a multi-year appropriation proposed in any Estimates, the financial years to which the multi-year appropriation applies.

(2B)

In subsection (2A)(b),—

Estimates

(a)

has the meaning given in section 2(1) of the Public Finance Act 1989; and

(b)

includes Supplementary Estimates as defined in section 2(1) of that Act

multi-year appropriation means an appropriation authorised to apply for more than 1 financial year (see section 10 of the Public Finance Act 1989).

9 Section 77 amended (Additional lay members of High Court for purposes of appellate jurisdiction in respect of Commission determinations)

Replace section 77(1) with:

(1)

This section applies for the purposes of the exercise by the court of its jurisdiction and powers under sections 91 to 97.

(1A)

There are to be lay members of the court appointed from time to time by the Governor-General.

Subpart 3—Companies Act 1993

10 Principal Act

This subpart amends the Companies Act 1993 (the principal Act).

11 Section 3 amended (Public notice)

In section 3(3), after “328(3)(a),”, insert 341(4)(b),”.

12 New section 8A inserted (Transitional, savings, and related provisions)

After section 8, insert:

8A Transitional, savings, and related provisions

The transitional, savings, and related provisions set out in Schedule 1AA have effect according to their terms.

13 Section 10 amended (Essential requirements)

Replace section 10(d)(ii) with:

(ii)

live in an enforcement country and be a director of a body corporate that is incorporated in that enforcement country under a law that is equivalent to this Act.

14 Section 12 amended (Application for registration)

(1)

Repeal section 12(2)(b)(iii).

(2)

After section 12(2), insert:

(3)

If no directors of the proposed company live in New Zealand, the application must, in relation to at least 1 director who lives in an enforcement country,—

(a)

confirm that the director is a director of a body corporate that is incorporated in that enforcement country under a law that is equivalent to this Act; and

(b)

include the prescribed information in respect of that body corporate.

15 Section 80 amended (Financial assistance not exceeding 5% of shareholders’ funds)

(1)

Replace section 80(1)(b) with:

(b)

within 10 working days of providing the financial assistance, the company sends a notice containing the particulars set out in subsection (1B) to—

(i)

the licensed market operator of each licensed market on which the shares of the company are quoted; or

(ii)

each shareholder of the company, if the shares of the company are not quoted on any licensed market.

(2)

After section 80(1A), insert:

(1B)

The particulars referred to in subsection (1)(b) are as follows:

(a)

the class and number of shares in respect of which the financial assistance has been provided:

(b)

the consideration paid or payable for the shares in respect of which the financial assistance has been provided:

(c)

the identity of the person receiving the financial assistance and, if that person is not the beneficial owner of the shares in respect of which the financial assistance has been provided, the identity of that beneficial owner:

(d)

the nature and, if quantifiable, the amount of the financial assistance.

(1C)

The licensed market operator must ensure that the notice under subsection (1)(b)(i) is notified in accordance with its arrangements for notifying disclosures made to it (see section 314 of the Financial Markets Conduct Act 2013).

16 Section 120 amended (Annual meeting of shareholders)

After section 120(4), insert:

(5)

However, it is not necessary for the board of a company to call, or for a company to hold, an annual meeting of shareholders under this section if—

(a)

there is nothing required to be done at that meeting; and

(b)

the board has resolved that it is in the interests of the company to rely on this subsection (having regard to whether there is any particular issue that the shareholders should be given an opportunity to discuss, comment on, or ask questions about); and

(c)

the constitution of the company does not require the meeting to be called or held.

(6)

Subsection (2) is subject to subsection (5).

17 Section 122 amended (Resolution in lieu of meeting)

Replace section 122(4) with:

(4)

It is not necessary for the board of a company to call, or for a company to hold, an annual meeting of shareholders under section 120 if everything required to be done at that meeting (by resolution or otherwise) is done by resolution in accordance with subsections (2) and (3).

(4A)

Section 120(5) does not limit subsection (4).

18 Section 200 amended (Application of preparation provisions)

After section 200(2), insert:

(3)

Further, section 201 does not apply to a company or an overseas company (A) in relation to a balance date if,—

(a)

on the balance date, A has no subsidiaries but is a subsidiary of a body corporate (B) that is—

(i)

incorporated in New Zealand; or

(ii)

registered or deemed to be registered under Part 18; and

(b)

group financial statements in relation to a group comprising B, A, and all other subsidiaries of B that comply with generally accepted accounting practice are completed in relation to the balance date under this Act or any other enactment; and

(c)

the company has not opted into compliance with section 201 as referred to in subsection (1)(e).

19 Section 202 amended (Group financial statements must be prepared)

Replace section 202(2) with:

(2)

Group financial statements are not required under subsection (1) in relation to a balance date if,—

(a)

on the balance date, A is a subsidiary of a body corporate (B) that is—

(i)

incorporated in New Zealand; or

(ii)

registered or deemed to be registered under Part 18; and

(b)

group financial statements in relation to a group comprising B, A, and all other subsidiaries of B that comply with generally accepted accounting practice are completed in relation to that balance date under this Act or any other enactment; and

(c)

A has not opted into compliance with this section as referred to in section 200(1)(e).

20 Section 203 amended (Recognition of financial reporting requirements of overseas countries)

In section 203(1) and (3), replace “a large” with “an”.

21 Section 206 amended (Application of audit requirement)

Replace section 206(2) with:

(2)

Subsection (1)(a) does not apply to a large company (A) if A has opted out of compliance with section 207 in accordance with section 207J.

22 Section 207D amended (Application of registration provisions)

Replace section 207D(2)(a) with:

(a)

A is a subsidiary of a body corporate (B) that is—

(i)

incorporated in New Zealand; or

(ii)

registered or deemed to be registered under Part 18; and

23 Section 207E amended (Financial statements must be registered)

In section 207E(1), after “204”, insert “(if any)”.

24 Section 208 amended (Obligation to prepare annual report)

After section 208(3), insert:

(4)

However, the board of a large company (within the meaning of section 198) is not required to prepare an annual report on the affairs of the company during an accounting period if—

(a)

the company is not required to prepare any financial statements or group financial statements for the accounting period under Part 11, Part 7 of the Financial Markets Conduct Act 2013, or any other enactment; and

(b)

shareholders who together hold at least 95% of the voting shares (within the meaning of section 198) agree that the annual report need not be prepared for the accounting period.

25 Section 209 amended (Obligation to make annual report available to shareholders)

(1)

In section 209(1), replace “date fixed for holding the annual meeting of shareholders” with “relevant date”.

(2)

After section 209(1A), insert:

(1B)

In subsection (1), relevant date means—

(a)

the date fixed for holding the annual meeting of shareholders; or

(b)

if, under section 120(5) or 122(4), it is not necessary to hold an annual meeting, the date that is 10 working days after the date on which the annual report is prepared.

26 Section 231 replaced (Variation of compromise)

Replace section 231 with:

231 Variation of compromise

(1)

A compromise approved under section 230 may include a procedure for its variation.

(2)

If it does, any variation made in accordance with the procedure must be notified to the Registrar and can have no effect before that happens.

(3)

A compromise approved under section 230 may also be varied by the approval of a variation in accordance with this Part, which, for that purpose, applies with any necessary modifications as if the proposed variation were a proposed compromise.

(4)

The provisions of this Part apply to any compromise that is varied in accordance with a procedure for its variation permitted by subsection (1) or that is varied in accordance with subsection (3).

27 Section 239AEJ amended (Mutuality required for transactions under bilateral netting agreements)

In section 239AEJ, insert as subsections (2) and (3):

(2)

Subsection (3) applies for the purpose of determining under this section whether there are mutual credits, mutual debts, or other mutual dealings.

(3)

A debt or other liability incurred by a person (T) who holds property as a trustee is to be regarded as incurred by T in the same capacity as that in which T holds the property, if T incurs, and is authorised by the terms of the trust to incur, the debt or other liability acting as the trustee.

28 Section 310D amended (Mutuality required for transactions under bilateral netting agreements)

In section 310D, insert as subsections (2) and (3):

(2)

Subsection (3) applies for the purpose of determining under this section whether there are mutual credits, mutual debts, or other mutual dealings.

(3)

A debt or other liability incurred by a person (T) who holds property as a trustee is to be regarded as incurred by T in the same capacity as that in which T holds the property, if T incurs, and is authorised by the terms of the trust to incur, the debt or other liability acting as the trustee.

29 Section 341 amended (Overseas company ceasing to carry on business in New Zealand)

After section 341(2), insert:

(3)

The Registrar may (in any event) remove an overseas company from the overseas register if satisfied that it has ceased to carry on business in New Zealand.

(4)

Before an overseas company can be removed from the overseas register under subsection (3), the Registrar must—

(a)

give notice to the overseas company—

(i)

that the Registrar intends to remove the overseas company from the overseas register under subsection (3); and

(ii)

that the overseas company may, within 20 working days after the date of the notice, deliver to the Registrar an objection to its removal on the ground that it is still carrying on business in New Zealand; and

(b)

give public notice—

(i)

that the Registrar intends to remove the overseas company from the overseas register under subsection (3); and

(ii)

that any person may, within 20 working days after the date of the public notice, deliver to the Registrar an objection to the overseas company’s removal on the ground that the overseas company is still carrying on business in New Zealand.

(5)

Subsection (4)(a) does not apply if the Registrar is satisfied that the overseas company has been dissolved, or has otherwise ceased to exist as a company, under or by virtue of the laws of any other country.

(6)

If any person objects to the removal of the overseas company as referred to in subsection (4)(a)(ii) or (b)(ii), the Registrar must not proceed with the removal unless the Registrar is satisfied that—

(a)

the objection has been withdrawn; or

(b)

the facts on which the objection is based are not, or are no longer, correct; or

(c)

the objection is frivolous or vexatious.

30 Section 342 amended (Liquidation of overseas company)

(1)

After section 342(2)(c), insert:

(ca)

has objected as referred to in section 341(4)(a)(ii); or

(2)

After section 342(2), insert:

(3)

An application may be made under subsection (1) whether or not the Registrar has acted under section 341(3) to (6).

31 Section 395 amended (Regulations)

In section 395(1)(bb), replace “12(2)(b)(iii)” with 12(3)(b).

32 New Schedule 1AA inserted

Insert the Schedule 1AA set out in Schedule 1 of this Act as the first schedule to appear after the last section of the principal Act.

33 Schedule 1 amended

(1)

In Schedule 1, after clause 6(5), insert:

(6)

For the purposes of subclause (5), the constitution may provide for different matters for different kinds of proxies (for example, a different specified time for the production of a proxy by electronic means).

(2)

In Schedule 1, after clause 7(4), insert:

(4A)

Despite subclause (4),—

(a)

the constitution of a company may specify a time by which postal votes that are cast using electronic means must reach the person who is authorised to receive and count postal votes at the meeting; and

(b)

that time may be less than 48 hours before the start of the meeting.

34 Schedule 4 amended

(1)

In Schedule 4, replace paragraph (ga) with:

(ga)

in relation to at least 1 director of the company who lives in an enforcement country, the prescribed information in respect of 1 body corporate that is incorporated in that enforcement country under a law that is equivalent to this Act and of which the director is a director (but this paragraph applies only if no directors of the company live in New Zealand):

(2)

In Schedule 4, replace paragraph (l) with:

(l)

the date of the last annual meeting of the company held under this Act or, if the company is not required to hold an annual meeting, the date on which a resolution was passed under section 120(5)(b) or 122:

35 Schedule 7 amended

In Schedule 7, clause 3(2)(b), replace “3” with “4”.

Subpart 4—Fair Trading Act 1986

36 Principal Act

This subpart amends the Fair Trading Act 1986 (the principal Act).

37 Section 15 amended (Limited application of sections 9 to 14 to news media)

(1)

In section 15(2), replace “broadcasting body” with “broadcaster” in each place.

(2)

Replace section 15(3)(a) with:

(a)

broadcasting and broadcaster have the same meanings as in section 2(1) of the Broadcasting Act 1989:

38 Section 48P amended (Proceedings relating to financial products or financial services)

In section 48P(6), replace the definition of financial service with:

financial service

(a)

has the same meaning as in section 5 of the Financial Service Providers (Registration and Dispute Resolution) Act 2008; and

(b)

includes a market service within the meaning of section 6(1) of the Financial Markets Conduct Act 2013; but

(c)

does not include, in relation to any provision of sections 9 to 13, any class or classes of services declared by regulations made under section 548(1)(d)(ii) of the Financial Markets Conduct Act 2013 not to be financial services for the purposes of the provision of Part 2 of that Act that corresponds to that provision of this Act

Subpart 5—Financial Advisers Act 2008

39 Principal Act

This subpart amends the Financial Advisers Act 2008 (the principal Act).

40 Section 101 amended (Disciplinary committee may discipline authorised financial adviser for breach of code)

After section 101(4), insert:

(4A)

A fine imposed under subsection (3)(g) is recoverable in any court as a debt due to the FMA.

Subpart 6—Financial Markets Authority Act 2011

41 Principal Act

This subpart amends the Financial Markets Authority Act 2011 (the principal Act).

42 Schedule 1 amended

In Schedule 1, Part 2, insert in its appropriate alphabetical order:

Secret Commissions Act 1910

Subpart 7—Financial Markets Conduct Act 2013

43 Principal Act

This subpart amends the Financial Markets Conduct Act 2013 (the principal Act).

44 Section 6 amended (Interpretation)

(1)

In section 6(1), definition of disclosure document, paragraph (b), replace “a disclosure document” with “a limited disclosure document”.

(2)

In section 6(1), insert in its appropriate alphabetical order:

limited disclosure document or LDD, in relation to an offer referred to in clause 26(1) of Schedule 1, means a limited disclosure document for the offer required by regulations made for the purposes of that clause

(3)

In section 6(1), replace the definition of register entry with:

register entry,—

(a)

in relation to a regulated offer, means the entry for the offer in the register of offers of financial products:

(b)

in relation to an offer referred to in clause 26(1) of Schedule 1, means the entry for the offer in the register of offers of financial products that is required by regulations made for the purposes of that clause

45 Section 13 amended (Miscellaneous interpretation provisions relating to statements and information)

In section 13(1), after “In this Act”, insert “and the regulations”.

46 Section 95 amended (Duty to notify changes to Registrar)

Replace section 95(1) and (2) with:

(1)

An issuer of regulated products must notify the Registrar of a prescribed change within the prescribed period.

(2)

In this section,—

prescribed change, in respect of regulated products,—

(a)

means a prescribed change that relates to the issuer, any offeror of those products, the regulated products, or any registered scheme to which those products relate; but

(b)

does not include a change in respect of which the FMA is required to notify the Registrar (for example, an order made under subpart 1 of Part 8)

prescribed period, in respect of a prescribed change, means—

(a)

the period (if any) that is prescribed in respect of the change; or

(b)

5 working days after the issuer becomes aware of the change (if paragraph (a) does not apply).

47 Section 96 amended (Information to be made available to investors or other prescribed persons)

In the heading to section 96, after investors, insert , FMA, Registrar,.

48 Section 97 amended (Information to be made publicly available)

In section 97, insert as subsections (2) and (3):

(2)

An issuer commits an offence and is liable on conviction to a fine not exceeding $50,000 if—

(a)

the regulations made for the purposes of this section require the issuer to make information publicly available by lodging that information with the Registrar; and

(b)

the issuer contravenes this section by failing to lodge that information with the Registrar in accordance with subsection (1).

(3)

The offence in this section is an infringement offence (see subpart 5 of Part 8).

49 Section 101 amended (Part 3 offer provisions)

(1)

Replace section 101(3)(l) with:

(l)

any provision of regulations made for the purposes of clause 26 of Schedule 1 that is prescribed by the regulations to be a Part 3 offer provision and stated to give rise to civil liability under this subsection:

(2)

After section 101(4)(g), insert:

(ga)

any provision of regulations made for the purposes of clause 26 of Schedule 1 that is prescribed by the regulations to be a Part 3 offer provision and stated to give rise to civil liability under this subsection:

(3)

In section 101(4)(h), replace “deficiencies in disclosure document under clause 26” with “disclosure deficiencies”.

50 Section 131 amended (Additional ongoing registration requirements for restricted schemes)

In section 131(1)(a)(ii), replace “workplace scheme” with “workplace savings scheme”.

51 Section 134 amended (Changes to registration as particular type of registered scheme)

In section 134(1)(b), replace “if the supervisor certifies, or the trustees of a restricted scheme certify,” with “if the supervisor certifies or, if there is no supervisor, the manager certifies”.

52 Section 147 amended (Duty of manager to provide reports to supervisor or FMA)

In section 147, replace “in the case of a restricted scheme” with “if there is no supervisor”.

53 Section 149 amended (Duty of manager to report contravention or possible contravention of issuer obligations)

In section 149(a) and (b), replace “in the case of a restricted scheme” with “if there is no supervisor”.

54 Section 165 amended (Changes to statement of investment policy and objectives)

In section 165(2), replace “to a restricted scheme” with “if the scheme does not have a supervisor”.

55 Section 168 amended (Action that must be taken on pricing errors and failure to comply with pricing methodologies)

In section 168(1)(b)(i), replace “transferred” with “issued”.

56 Section 173 amended (General prohibition on transactions giving related party benefits)

In section 173(4), replace “in the case of a restricted scheme” with “if the registered scheme does not have a supervisor”.

57 Section 178 amended (Application of scheme participant transfer rules)

In section 178(1)(c), replace “only” with “only if”.

58 Section 195 amended (Cancellation of registration)

In section 195(1)(c), replace “if the supervisor certifies, or the trustees of a restricted scheme certify,” with “if the supervisor certifies or, if there is no supervisor, the manager certifies”.

59 Section 212 amended (Initial steps in winding up of registered scheme)

(1)

In section 212(1), replace “the supervisor or (in the case of a restricted scheme) the trustees” with “the supervisor or (if there is no supervisor) the manager”.

(2)

In section 212(3), replace “trustee” with “manager”.

60 Section 213 amended (Winding-up report)

In section 213(1), replace “or, in the case of a restricted scheme, the persons who were the trustees” with “or, if there was no supervisor, the person who was the manager of the relevant registered scheme”.

61 Section 217 amended (Contents of registers)

After section 217(1), insert:

(1A)

However, a register is not required to contain the information specified in a paragraph in subsection (1) if the circumstances prescribed in respect of that paragraph apply.

62 Section 228 amended (Part 4 governance provisions)

After section 228(4)(w), insert:

(wa)

section 219 (auditor must advise if auditor considers that subpart is not being complied with):

63 Section 247 amended (Exception for disclosure in connection with preparing PDS or disclosure document)

(1)

In the heading to section 247, replace disclosure document with limited disclosure document.

(2)

In section 247, replace “disclosure document under clause 26 of Schedule 1” with “limited disclosure document”.

64 Section 314 amended (General obligations in respect of licensed markets)

(1)

Replace section 314(b)(i) with:

(i)

for notifying disclosures made to it under a disclosure obligation and for continuing to make those disclosures available; and

(2)

In section 314, insert as subsection (2):

(2)

In subsection (1)(b)(i), disclosure obligation means—

(a)

any provision of subpart 4, 5, or 6 that requires information to be notified or disclosed to a licensed market operator:

(b)

an alternative disclosure obligation:

(c)

a provision of this Act, the regulations, or another enactment that requires information to be notified or disclosed to a licensed market operator for the purpose of the information being made available to participants in a licensed market.

65 Section 351 amended (Regulations modifying this Part or Part 7 for licensed markets)

(1)

After section 351(1)(d), insert:

(e)

providing that issuers of a specified class must not be treated as listed issuers for the purposes of any provision or provisions of this Act or any other specified enactment:

(f)

providing that, in specified circumstances, financial products must not be treated as quoted financial products for the purposes of any provision or provisions of this Act or any other specified enactment.

(2)

In section 351(3)(b), after “to the regulations”, insert “; and”.

(3)

After section 351(3)(b), insert:

(c)

be satisfied, in relation to any recommendation relating to subsection (1)(e) or (f), that the extent to which the regulations disapply any enactment to issuers or financial products is not broader than is reasonably necessary to address the matters that gave rise to the regulations.

66 Section 372 amended (Transfer of specified financial products by products transfer)

After section 372(2), insert:

(2A)

An indemnity given by the product holder of a financial product to the issuer in respect of any liability of the issuer for the acts, omissions, or obligations of the holder is not a liability for the purpose of subsection (2).

67 Section 397 amended (Procedural requirements)

After section 397(1), insert:

(1A)

The FMA must make a decision under section 396 in the prescribed manner (if any).

68 Section 400 amended (Licence may cover related bodies corporate as authorised bodies)

Replace section 400(1)(c) with:

(c)

there is no reason to believe that the related body corporate is likely to contravene the market services licensee obligations; and

69 New section 426A inserted (Further prescribed information to be made available)

After section 426, insert:

426A Further prescribed information to be made available

(1)

A licensee or an authorised body that provides the service must,—

(a)

at the request of a prescribed person or at the prescribed times or on the occurrence of the prescribed events, make available to the prescribed person the information that is required to be made available under this section by the regulations; and

(b)

at the prescribed times or on the occurrence of the prescribed events, make publicly available the information that is required to be made publicly available by the regulations.

(2)

The information must be made available in the prescribed manner.

70 Section 427 replaced (False or misleading statements and omissions)

Replace section 427 with:

427 False or misleading statements and omissions

(1)

Subsections (2) to (4) apply if—

(a)

there is—

(i)

a statement in a disclosure statement that is false or misleading or is likely to mislead; or

(ii)

an omission from a disclosure statement of information that is required to be contained in the disclosure statement by the regulations; and

(b)

the statement or omission is materially adverse from the point of view of a retail investor.

(2)

The licensee or authorised body must not provide the disclosure statement to a person under section 423.

(3)

If the disclosure statement has already been provided to a person (A), the licensee or authorised body must not continue to provide the service to A—

(a)

in the prescribed circumstances (if any); or

(b)

if the licensee or authorised body fails to comply with any prescribed conditions.

(4)

If the licensee or authorised body continues to provide the service to A, the licensee or authorised body must, in the prescribed manner, provide to A a new disclosure statement that is not defective in terms of subsection (1)(a) and (b).

(5)

A person must not make available to any person or the public any information under section 426A (the further disclosure) if—

(a)

there is—

(i)

a statement in the further disclosure that is false or misleading or is likely to mislead; or

(ii)

an omission from the further disclosure of information that is required to be contained in the further disclosure by this Act or the regulations; and

(b)

the statement or omission is materially adverse from the point of view of a retail investor.

(6)

See section 511 (offence to knowingly or recklessly contravene subsection (2) or (5)).

71 Section 428 replaced (Further prescribed information to be made available)

Replace section 428 with:

428 Miscellaneous provisions relating to false or misleading statements and omissions

(1)

For the purposes of section 427, a statement about a future matter (including the doing of, or refusing to do, an act) must be taken to be misleading if the person making the statement does not have reasonable grounds for making it.

(2)

Subsection (1) does not limit the meaning of a reference to a misleading statement.

(3)

Section 427 does not limit sections 423 to 426A.

72 Section 448 amended (Regulations regulating holding and application of investor funds and property by derivatives issuers)

In section 448(1)(a), after “receipt of money and property from”, insert “, or on account of,”.

73 Section 449 amended (Part 6 services provisions)

(1)

In section 449(3)(c), replace “427” with 427(2), (3), and (5).

(2)

In section 449(4)(g), replace “428” with 426A.

(3)

After section 449(4)(g), insert:

(ga)

section 427(4) (failure to provide a new disclosure statement):

74 Section 461A amended (Financial statements for registered schemes and funds)

In section 461A(2) and (3), replace “balance date of the manager” with “balance date of the scheme”.

75 Section 461H amended (Lodgement of financial statements)

(1)

In section 461H(1), replace “this subpart” with “any of sections 460, 461, and 461B”.

(2)

After section 461H(1), insert:

(1A)

Every manager of a registered scheme must ensure that, within 4 months after the balance date of the scheme, copies of the financial statements that are required to be prepared under section 461A, together with a copy of the auditor’s report on those statements, are delivered to the Registrar for lodgement.

76 Section 461K amended (FMA reporting entities considered to have higher level of public accountability)

In the heading to section 461K, replace FMA with FMC.

77 Section 462 amended (When FMA may make stop orders)

In section 462(1)(a), replace “disclosure document under clause 26 of Schedule 1” with “limited disclosure document”.

78 Section 499 amended (General defences for person in contravention)

In section 499(3), replace “427” with 427(2) or (5).

79 Section 500 amended (Disclosure defences for person in contravention)

In section 500(1) and (2), replace “427” with 427(2) or (5).

80 Section 501 amended (Additional disclosure or financial reporting defence for directors who are treated as contravening)

In section 501(3), replace “section 499(1)(a)” with “section 499”.

81 New section 501A inserted (Additional defence for licensees who are treated as contravening)

After section 501, insert:

501A Additional defence for licensees who are treated as contravening

(1)

This section applies if—

(a)

an authorised body (A) contravenes any market services licensee obligation; and

(b)

a person (B) is the licensee who is treated as being in contravention under section 400(3).

(2)

In any proceeding under this subpart against B, it is a defence if B proves that B took all reasonable and proper steps to ensure that A complied with the market services licensee obligation.

(3)

Subsection (2) does not limit any defence that B may have under section 499 or 500 (as a person who is treated as contravening a market services licensee obligation).

82 Section 511 amended (Offence of knowingly or recklessly contravening other provisions relating to defective disclosure)

(1)

In section 511(1) and (2), replace “section 99 or 427” with “section 99 or 427(2) or (5).

(2)

In section 511(1)(a) and (2)(b)(i), replace “427(1)(a)(i)” with 427(1)(a)(i) or (5)(a)(i).

(3)

In section 511(1)(b) and (2)(b)(ii), replace “427(1)(a)(ii)” with 427(1)(a)(ii) or (5)(a)(ii).

(4)

Replace section 511(4)(b) and (c) with:

(b)

in relation to section 427(2), the act of providing the disclosure statement to a person:

(c)

in relation to section 427(5), the act of providing or making available the further disclosure:

(d)

in relation to clause 27 of Schedule 1, the act of providing the limited disclosure document to a person.

83 Section 534 amended (Directors treated as having contravened in case of defective disclosure or financial reporting contravention)

Replace section 534(1)(d) with:

(d)

an entity that provided a limited disclosure document under clause 26 of Schedule 1 has contravened clause 27 of that schedule (defective disclosure).

84 Section 543 amended (Regulations for purposes of Part 3 (Disclosure of offers of financial products))

(1)

In section 543(1)(c)(i) to (iii), replace “disclosure document” with “limited disclosure document” in each place.

(2)

After section 543(1)(c)(iii), insert:

(iiia)

requirements relating to an entry for the offer in the register of offers of financial products:

(iiib)

information that must be provided, the person or persons to whom it must be provided, and other matters relating to the manner in which it is provided:

(iiic)

limits or restrictions that apply in connection with an offer, financial products, or investors:

(3)

In section 543(1)(c)(vi), replace “(iv) and (v)” with (iiia) to (v)”.

(4)

After section 543(1)(c)(vi), insert:

(vii)

matters for the purposes of clause 26(6) of Schedule 1 (including requirements, conditions, or other matters that an issuer must comply with or ensure are met):

(viii)

which provisions of the regulations made for the purposes of clause 26 of Schedule 1 (if any) are Part 3 offer provisions for the purposes of this Act and, if a provision is so prescribed, stating whether the provision gives rise to civil liability under section 101(3) or (4) (see Part 8, in which Part 3 offer provisions are specified to be civil liability provisions):

(5)

In section 543(1)(d), after “section 95”, insert “and a period or periods within which those changes must be notified”.

(6)

In section 543(1)(e), delete “the persons who may make a request under section 96, the persons to whom information must be made available under section 96,”.

(7)

After section 543(1)(e), insert:

(ea)

prescribing the persons who may make a request under section 96 and the persons to whom information must be made available under section 96 (for example, investors, a supervisor, the FMA, or the Registrar):

(8)

After section 543(2), insert:

(3)

A time or an event prescribed under subsection (1)(e) in respect of regulated products may be any time, or any event that occurs, on or after the time at which the products are first offered under a regulated offer or otherwise become regulated products (regardless of whether or not the products have been issued).

85 Section 544 amended (Regulations for purposes of Part 4 (governance of financial products))

(1)

After section 544(1)(v)(vi), insert:

(via)

circumstances in which information specified in a paragraph in section 217(1) is not required to be contained in a register:

(2)

In section 544(3), after “(iv),”, insert (via),”.

86 Section 546 amended (Regulations for purposes of Part 6 (market services))

After section 546(1)(k), insert:

(ka)

prescribing the information that must be made available under section 426A, the times or events referred to in that section, the persons who may make a request, the persons to whom information must be made available, and the manner of making the information available (including prescribing the manner in which the information is to be presented, calculated, or prepared):

(kb)

prescribing circumstances for the purposes of section 427(3)(a):

(kc)

prescribing conditions for the purposes of section 427(3)(b) (for example, requiring a corrective statement or a warning notice to be provided to an investor or requiring some other specified action to be taken to avoid or mitigate any actual or potential adverse effects of making the defective disclosure as referred to in section 427(1)):

87 Section 550 amended (Procedural requirements for regulations relating to exemptions, exclusions, and definitions)

In section 550(2)(b), after “(iv),”, insert (via),”.

88 Section 556 amended (FMA may grant exemptions)

In section 556(1)(a), after “Parts 2 to 7”, insert “, subpart 8 of Part 8,”.

89 Schedule 1 amended

(1)

In Schedule 1, clause 8(1)(c), delete “to eligible persons”.

(2)

In Schedule 1, clause 8(3), delete “to eligible persons”.

(3)

In Schedule 1, replace clause 8(3)(a) with:

(a)

does not require disclosure under Part 3 of this Act for any reason other than as a result of the application of this clause; or

(4)

In Schedule 1, clause 10(1)(b)(iv) and (v), after “issued”, insert “or transferred” in each place.

(5)

In Schedule 1, after clause 19(1), insert:

(1A)

An offer of options to acquire, by way of issue, financial products (and the offer of those option underlyings) does not require disclosure under Part 3 of this Act if—

(a)

the options and option underlyings are equity securities, debt securities, or managed investment products; and

(b)

the option underlyings are of the same class as quoted financial products that have been quoted on a licensed market at all times during the 3-month period before the time of the offer; and

(c)

trading in those quoted financial products on the licensed market on which they are quoted was not suspended for more than a total of 5 trading days during the 3-month period referred to in paragraph (b); and

(d)

it is a term of the offer that the issuer will take any necessary steps to ensure that, immediately after the option underlyings are issued, the option underlyings are quoted; and

(e)

the market rules of the licensed market on which the option underlyings are quoted contain continuous disclosure provisions.

(1B)

In this clause, option underlyings, in relation to an offer of options, means the underlying financial products to which the options relate.

(6)

In Schedule 1, replace clause 26(2)(a) with:

(a)

B or a prescribed person or both are provided with a limited disclosure document (an LDD) that complies with subclause (4); and

(aa)

the prescribed requirements (if any) relating to an entry for the offer in the register of offers of financial products (a register entry) are complied with; and

(ab)

B or a prescribed person or both are provided with any other prescribed information in the prescribed manner; and

(ac)

all prescribed limits or restrictions (if any) applying in connection with the offer, the financial products, or the investors are met; and

(7)

In Schedule 1, clause 26(4), replace “disclosure document under subclause (2)(a)” with “LDD”.

(8)

In Schedule 1, clause 26(5), replace “a disclosure document” with “an LDD”.

(9)

In Schedule 1, replace clause 26(6) with:

(6)

The following apply if A is not the issuer of the financial products:

(a)

the issuer must, if required by the regulations, ensure that a requirement, a condition, or any other matter of a kind referred to in any of paragraphs (a) to (e) of subclause (2) is complied with (and the issuer must perform that duty in the prescribed manner):

(b)

the regulations may provide for a requirement, a condition, or any other matter of a kind referred to in any of paragraphs (a) to (e) of subclause (2) to be complied with by A or the issuer or both (and, accordingly, A or the issuer or both must so comply).

(7)

A contravention of a requirement prescribed for the purposes of this clause does not prevent the exclusion referred to in subclause (1) from continuing to apply (but may give rise to consequences under Part 8 of this Act or an offence under clause 28A).

(10)

In Schedule 1, replace clause 27(1) with:

(1)

A person must not provide an LDD to a person if—

(a)

there is—

(i)

a statement in the LDD, any application form that accompanies the LDD, or the register entry that is false or misleading or is likely to mislead; or

(ii)

an omission from the LDD or the register entry of information that is required to be contained in the LDD or the register entry by this Act or the regulations; and

(b)

the matter referred to in paragraph (a) is materially adverse from the point of view of an investor.

(11)

In Schedule 1, heading to clause 28, replace disclosure document under clause 26 with limited disclosure document.

(12)

In Schedule 1, replace clause 28(1)(a) and (b) with:

(a)

a material statement in the LDD or the register entry is false or misleading or is likely to mislead; or

(b)

there is a material omission from the LDD or the register entry of information that is required to be contained in the LDD or the register entry by this Act or the regulations.

(13)

In Schedule 1, replace clause 28(4) with:

(4)

In this clause, application period means the period in which applications for financial products under the LDD may be made.

(14)

In Schedule 1, after clause 28, insert:

28A Failure to lodge or give information to Registrar or FMA

(1)

A person who fails to comply with a requirement under clause 26 to lodge or otherwise give any information or other document to the Registrar or the FMA commits an offence and is liable on conviction to a fine not exceeding $50,000.

(2)

The offence in this clause is an infringement offence (see subpart 5 of Part 8).

90 Schedule 2 amended

In Schedule 2, clause 13(1), replace “If this Act requires a document or notification to be lodged with or given to the Registrar” with “If a document or notification required by or for the purposes of this Act must or may be lodged with or given to the Registrar”.

91 Schedule 4 amended

(1)

In Schedule 4, after clause 1(1)(c), insert:

(d)

Part 4 provides for transitional provisions relating to the Financial Markets Conduct Regulations 2014.

(2)

In Schedule 4, after clause 10, insert:

10A Banks’ regulatory capital

(1)

This clause applies in respect of convertible securities offered and allotted before the close of the 2-year date (unless the issuer makes an election as referred to in clause 7(3)).

(2)

Despite clauses 7 and 10,—

(a)

the former enactments apply, as if this Act had not been enacted, to any offer and allotment of the convertible securities and the specified equity securities to which the convertible securities relate; and

(b)

an allotment of those specified equity securities may be made before, on, or after the 2-year date; and

(c)

in the case of a specified equity security that is allotted after the 2-year date, clause 20 applies to the security on and after its allotment.

(3)

In this clause, convertible security and specified equity security have the same meanings as in the Securities Act (Banks’ Regulatory Capital) Exemption Notice 2014 (as in force before its revocation).

(3)

In Schedule 4, after clause 62, insert:

Part 4 Transitional provisions relating to Financial Markets Conduct Regulations 2014

63 Definition

In clauses 64 to 69, Regulations means the Financial Markets Conduct Regulations 2014.

64 Certification as to eligible investors under Financial Advisers Act 2008

(1)

This clause applies to a certification that is referred to in clause 3(4) of Schedule 1 of the Regulations and that is in effect immediately before that subclause is revoked.

(2)

The certification remains in effect after the revocation (subject to any revocation under section 5F of the Financial Advisers Act 2008).

65 Service disclosure statement and investment proposal for existing DIMS

(1)

This clause applies in relation to a DIMS provided by a person (A) to an investor (B) if, immediately before the commencement of this clause, clause 6 of Schedule 1 of the Regulations (clause 6) applies in relation to the DIMS.

(2)

The following apply after the revocation of clause 6:

(a)

A is not required to provide an SDS under sections 423 and 424 to B if A, under clause 6, was not required to do so before the revocation:

(b)

A is not required to provide an investment proposal under regulation 206 of the Regulations to B if A, under clause 6, was not required to do so before the revocation:

(c)

regulation 226(1)(a) of the Regulations does not apply to a client agreement if, under clause 6, that paragraph did not apply to the client agreement before the revocation:

(d)

section 437(2) to (4) does not apply to an investment authority if, under clause 6, those subsections did not apply to the investment authority before the revocation.

(3)

In this clause,—

investment proposal has the same meaning as in regulation 206(2) of the Regulations

SDS has the same meaning as in the Regulations.

66 Existing licences continue and cover supervision

(1)

If, immediately before the revocation of clause 8 of Schedule 1 of the Regulations, that clause applies to a licence,—

(a)

the licence continues in effect on and after that revocation; and

(b)

if the licence is treated as covering certain matters under clause 8(2) of that schedule, the licence must be treated as continuing to cover those matters.

(2)

This clause applies despite clause 8(4) of Schedule 1 of the Regulations, but nothing in this clause affects the duration of the licence under section 12 of the Financial Markets Supervisors Act 2011 or prevents the FMA from exercising any power in relation to the licence.

67 Extension of licences to cover substantially the same matters under new law

(1)

If, immediately before the revocation of clause 9 of Schedule 1 of the Regulations, that clause applies to a licence, the following apply on and after that revocation:

(a)

if, immediately before that revocation, the licence is subject to a variation under clause 9(3) of that schedule, the licence continues to be subject to the variation; and

(b)

if the licence continues to be subject to conditions, limitations, or restrictions under clause 9(4) of that schedule, the licence must be treated as continuing to be subject to the conditions, limitations, or restrictions.

(2)

This clause applies despite clause 9(7) of Schedule 1 of the Regulations, but nothing in this clause prevents the FMA from exercising any power in relation to the licence.

68 Governance requirements for PIE call fund units, PIE term fund units, and bank notice products that are specified units

(1)

This clause applies to a security if, immediately before the commencement of this clause, clause 19 of Schedule 1 of the Regulations applies to the security.

(2)

Clauses 20(1), 21, 22, and 30 of this schedule do not apply to the security if clause 28 of Schedule 8 of the Regulations applies in respect of the managed investment scheme to which the security relates.

69 Certain superannuation schemes that elect to be treated as registered

If, immediately before the revocation of clause 30A of Schedule 1 of the Regulations, that clause applies to a scheme and to the interests in the scheme, that clause continues to apply to the scheme and the interests on and after that revocation.

92 Amendment to Financial Markets (Repeals and Amendments) Act 2013

(1)

This section amends the Financial Markets (Repeals and Amendments) Act 2013.

(2)

In the Schedule, Part 1, item relating to section 3(1)(h) to (i) of the Financial Transactions Reporting Act 1996, delete “and substitute:” and repeal the paragraph (h) that was to be substituted.

Subpart 8—Financial Service Providers (Registration and Dispute Resolution) Act 2008

93 Principal Act

This subpart amends the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (the principal Act).

94 Section 18 amended (Deregistration of financial service provider)

(1)

After section 18(1)(aa), insert:

(ab)

is required by section 48 to be a member of an approved dispute resolution scheme but is not a member of any such scheme as required; or

(2)

After section 18(1), insert:

(1AA)

Subsection (1)(ab) does not apply in respect of any time before the end of the period of 10 working days referred to in section 16(1)(ab).

Subpart 9—Friendly Societies and Credit Unions Act 1982

95 Principal Act

This subpart amends the Friendly Societies and Credit Unions Act 1982 (the principal Act).

96 Section 28 amended (Appointment of trustees)

Replace section 28(1) with:

(1)

Every registered society and branch is to have 1 or more trustees, who must be appointed from time to time by a resolution of a majority of the members of the society or branch entitled to vote and voting on the matter.

97 Section 49 amended (Duties of trustees in relation to investments)

In section 49(1), replace “majority of the members of the society or branch present and entitled to vote in general meeting” with “resolution of a majority of the members of the society or branch entitled to vote and voting on the matter”.

98 Section 50 amended (Trustees of society may make investments for branch, etc)

(1)

In section 50(2), replace “majority” with “resolution of a majority”.

(2)

In section 50(2), replace “present and entitled to vote in general meeting” with “entitled to vote and voting on the matter”.

99 Section 82 amended (Special resolutions)

(1)

In section 82(1)(b), replace “either in person or by proxy at the meeting” with “on the matter”.

(2)

In section 82(1)(b), replace “vote at the meeting” with “vote on the matter”.

(3)

Repeal section 82(2).

100 New sections 147A and 147B inserted

After section 147, insert:

147A Meetings may be held using audio, audio and visual, or electronic communication

The rules of a registered society or branch or of a credit union may (without limitation) provide for meetings to be held using audio, audio and visual, or electronic communication.

147B Postal, electronic, and proxy voting

(1)

This section applies to any matter that is to be determined by a vote of members of a registered society or branch or of a credit union.

(2)

The rules of the registered society or branch or of the credit union—

(a)

may (without limitation) permit voting in 1 or more of the following ways:

(i)

by post:

(ii)

by electronic means (for example, by email or by the use of an Internet site):

(iii)

by proxy; and

(b)

must set out the procedures to be followed in relation to any voting permitted under paragraph (a).

(3)

Rules under this section that permit voting by post or electronic means may permit or require votes cast by post or electronic means to be cast in advance of any meeting at which the matter in question is to be determined.

(4)

Subsection (3) applies despite any enactment (for example, sections 64(3), 65(1)(a), and 82(1) of this Act) that requires a resolution to be passed, or a matter to be otherwise determined, at a meeting.

Subpart 10—Insolvency Act 2006

101 Principal Act

This subpart amends the Insolvency Act 2006 (the principal Act).

102 Section 228 amended (Assignee’s final statement of receipts and payments)

Replace section 228(2) and (3) with:

(2)

The final statement of receipts and payments must show in detail the receipts and payments in respect of the bankrupt’s estate.

(3)

The Assignee must provide a copy of the final statement of receipts and payments to any creditor, or other person who has an interest, if the creditor or other person requests a copy.

(4)

The copy must be provided within 20 working days after the Assignee receives the request.

103 Section 258 amended (Mutuality required for transactions under bilateral netting agreements)

In section 258, insert as subsections (2) and (3):

(2)

Subsection (3) applies for the purpose of determining under this section whether there are mutual credits or mutual debts.

(3)

A debt or other liability incurred by a person (T) who holds property as a trustee is to be regarded as incurred by T in the same capacity as that in which T holds the property, if T incurs, and is authorised by the terms of the trust to incur, the debt or other liability acting as the trustee.

104 Section 348 replaced (Termination of appointment for failure to supervise adequately)

Replace section 348 with:

348 Termination of supervisor’s appointment

The Assignee may—

(a)

terminate the supervisor’s appointment if the Assignee considers—

(i)

that the supervisor has failed to supervise the debtor’s compliance adequately; or

(ii)

that, after being appointed, the supervisor has been convicted of an offence involving dishonesty; and

(b)

appoint a replacement supervisor accordingly.

105 Section 350 amended (Variation or discharge of order)

(1)

In the heading to section 350, replace discharge of order with cancellation of order by Assignee on application from debtor, creditor, or supervisor.

(2)

In section 350, replace “discharge” with “cancel”.

106 New section 350A inserted (Cancellation of order by Assignee without application)

After section 350, insert:

350A Cancellation of order by Assignee without application

The Assignee may (without an application from any person) cancel a summary instalment order if satisfied that the debtor—

(a)

is in default under the order; or

(b)

is able immediately to pay the debtor’s unsecured debts (excluding any student loan balance); or

(c)

cannot be located.

107 Section 352 amended (Proceedings against debtor)

In section 352(2)(b), after “order”, insert “or the order has been cancelled”.

108 Section 355 amended (Meaning of current summary instalment order)

In section 355, replace “discharged” with “cancelled”.

109 Section 365 repealed (Assignee must notify creditors)

Repeal section 365.

110 Section 367 amended (When debtor admitted to no asset procedure)

Replace section 367(2) with:

(2)

The Assignee must, as soon as practicable,—

(a)

notify each known creditor of the debtor that the debtor has been admitted to the no asset procedure and send each of them a summary of the debtor’s assets and liabilities; and

(b)

advertise in the prescribed manner that the debtor has been admitted to the no asset procedure.

111 Section 408 amended (Assignee must apply for order of release)

(1)

In the heading to section 408, replace must with may.

(2)

Replace section 408(1) with:

(1)

After preparing the final statement of receipts and payments in relation to the estate of a bankrupt (see section 228), the Assignee may apply to the court for an order releasing the Assignee from the administration of the estate.

112 Section 441 amended (Regulations)

Repeal section 441(1)(i).

113 Schedule 1 amended

In Schedule 1, after paragraph (w), insert:

(x)

bring a proceeding challenging the existence or terms of a trust (even if the bankrupt could not have brought the proceeding if the bankrupt was not bankrupt and even if the bankrupt is a settlor, trustee, or beneficiary of the trust).

114 Amendment to Insolvency (Personal Insolvency) Regulations 2007

(1)

This section amends the Insolvency (Personal Insolvency) Regulations 2007.

(2)

Revoke regulation 16.

Subpart 11—New Zealand Superannuation and Retirement Income Act 2001

115 Principal Act

This subpart amends the New Zealand Superannuation and Retirement Income Act 2001 (the principal Act).

116 Section 83 amended (Functions)

(1)

After section 83(d), insert:

(da)

to promote education, and publish information, about financial matters to assist individuals to make financial decisions confidently and informedly:

(db)

to advise on financial capability issues, when requested to do so by the Minister:

(2)

After section 83(g), insert:

(h)

to perform any additional function that the Minister directs under section 112 of the Crown Entities Act 2004.

Subpart 12—Takeovers Act 1993

117 Principal Act

This subpart amends the Takeovers Act 1993 (the principal Act).

118 Section 2 amended (Interpretation)

In section 2(1), definition of director, paragraph (d), after “in the body corporate” insert “or unincorporate”.

119 New section 2B inserted (Transitional, savings, and related provisions)

After section 2A, insert:

2B Transitional, savings, and related provisions

The transitional, savings, and related provisions set out in Schedule 1AA have effect according to their terms.

120 Section 8 amended (Functions of Panel)

After section 8(1)(e), insert:

(eaa)

to make determinations in relation to the reimbursement of expenses under sections 47 to 53:

121 Section 18 amended (Further provisions applying to Panel)

In section 18, replace “the Schedule” with Schedule 1.

122 Section 44Q replaced (Jurisdiction of courts in New Zealand)

Replace section 44Q with:

44Q Jurisdiction of courts in New Zealand

The High Court has exclusive jurisdiction to hear and determine proceedings in New Zealand under this Act, other than the following:

(a)

proceedings for offences against this Act:

(b)

proceedings in relation to recovery or enforcement as referred to in sections 52 and 53:

(c)

proceedings for appeals under section 31G.

123 New cross-heading above section 45 inserted

Before section 45, insert:

Exemptions and regulations

124 Section 49 replaced (Repeal of Companies Amendment Act 1963)

Replace section 49 with:

Reimbursement of expenses incurred in connection with offer or takeover notice

47 Interpretation for sections 48 to 53

In sections 48 to 53, the following terms have the same meanings as in the takeovers code:

(a)

equity security:

(b)

offer:

(c)

offeror:

(d)

takeover notice:

(e)

target company.

48 Reimbursement of directors

(1)

Despite anything in the constitution of a target company, each director of the target company is entitled to be reimbursed by the target company for any expenses properly incurred by the director on behalf, and in the interests, of holders of equity securities of the target company in relation to the offer or takeover notice.

(2)

The amount to be reimbursed to a director is the amount—

(a)

agreed between the director and the target company; or

(b)

determined by the Panel on an application made by the director or the target company (see section 50).

49 Reimbursement of target company

(1)

A target company is entitled to be reimbursed by the offeror for any expenses properly incurred by the target company in relation to the offer or takeover notice, whether as a result of section 48 or otherwise.

(2)

The amount to be reimbursed to the target company is the amount—

(a)

agreed between the target company and the offeror; or

(b)

determined by the Panel on an application made by the target company or the offeror (see section 50).

50 Determinations by Panel of amount to be reimbursed

If the Panel receives an application under section 48(2)(b) or 49(2)(b), the Panel must (unless an agreement is reached beforehand under section 48(2)(a) or 49(2)(a))—

(a)

determine the amount to be reimbursed for the purposes of section 48(2)(b) or 49(2)(b); and

(b)

order that amount to be paid, as the case may be,—

(i)

by the target company to the director; or

(ii)

by the offeror to the target company.

51 Appeals against Panel’s determination

(1)

The director or the target company may appeal to the High Court against the Panel’s determination for the purposes of section 48(2)(b).

(2)

The target company or the offeror may appeal to the High Court against the Panel’s determination for the purposes of section 49(2)(b).

(3)

An appeal under this section must be made—

(a)

within 21 days of the date on which the appellant was notified of the Panel’s determination; or

(b)

within any longer time allowed by the High Court.

(4)

The High Court must determine the appeal by either dismissing the appeal or giving such directions or making such determination in the matter as it thinks fit.

52 Enforcement of agreement of amount to be reimbursed

If the amount to be reimbursed is agreed, the amount is recoverable as a debt due in any court of competent jurisdiction, as the case may be,—

(a)

by the director from the target company; or

(b)

by the target company from the offeror.

53 Enforcement of Panel’s order for payment of amount to be reimbursed

(1)

If the amount to be reimbursed is determined by the Panel, the Panel’s order under section 50 may be enforced as if it were a judgment by the court for the payment of a sum of money.

(2)

In this section, court means—

(a)

a District Court, if the amount to be reimbursed is no more than $200,000; or

(b)

the High Court, if the amount to be reimbursed is more than $200,000.

125 New Schedule 1AA inserted

Insert the Schedule 1AA set out in Schedule 2 of this Act as the first schedule to appear after the last section of the principal Act.

126 Schedule amended

In the Schedule heading, replace “Schedule” with Schedule 1.

127 Amendment to Takeovers Code Approval Order 2000

(1)

This section amends the Takeovers Code set out in the Schedule of the Takeovers Code Approval Order 2000.

(2)

Revoke rule 49.

(3)

In Schedule 1, clause 9(1), replace “rule 49” with sections 47 to 53 of the Act”.

128 Amendment to Takeovers (Fees) Regulations 2001

(1)

This section amends the Takeovers (Fees) Regulations 2001.

(2)

After regulation 4(2)(aa), insert:

(ab)

an application for a determination under section 48(2)(b) or 49(2)(b):

Part 2 Communications

129 Principal Act

This Part amends the Postal Services Act 1998 (the principal Act).

130 Section 2 amended (Interpretation)

(1)

In section 2(1), insert in its appropriate alphabetical order:

courier service means a service for the conveyance or delivery of articles by courier if—

(a)

the sender requests that the article be conveyed or delivered by courier; and

(b)

both of the following are features of the service:

(i)

conveyance or delivery on an expedited basis; and

(ii)

the article is tracked throughout the conveyance or delivery process

(2)

In section 2(1), replace the definition of letter with:

letter means any form of written communication, or any other document or article (including any envelope, packet, package, or wrapper containing that communication, document, or article),—

(a)

that is addressed to a specific person or a specific address; and

(b)

that is to be conveyed or delivered other than by electronic means or courier service; and

(c)

that does not exceed—

(i)

260 mm in height; or

(ii)

385 mm in length; or

(iii)

20 mm in thickness; or

(iv)

1 kg in weight; and

(d)

for which a charge is made in respect of carrying, taking charge of, or sending it

(3)

After section 2(2), insert:

(2A)

However, an article to be conveyed or delivered by courier service is not an article that has been posted.

Part 3 Energy and resources

Subpart 1—Energy Efficiency and Conservation Act 2000

131 Principal Act

This subpart amends the Energy Efficiency and Conservation Act 2000 (the principal Act).

132 Section 37 repealed (Incorporation of material by reference)

Repeal section 37.

Subpart 2—Gas Act 1992

133 Principal Act

This subpart amends the Gas Act 1992 (the principal Act).

134 Section 2 amended (Interpretation)

In section 2(1), replace the definition of gas distributor with:

gas distributor

(a)

means any person who supplies line function services, whether by means of a distribution system or by other means, to any gas retailer or to any other person or persons; and

(b)

includes a gas distributor who is also a gas retailer providing line function services to itself

135 Section 43EA amended (Membership of dispute resolution scheme)

(1)

In section 43EA(3)(a), replace “section 43S(1)” with subsection (3A).

(2)

After section 43EA(3), insert:

(3A)

The Governor-General may, on the recommendation of the Minister of Consumer Affairs made after consultation with the Minster of Energy and Resources, make regulations exempting, on any terms and conditions, any class of industry participants identified in regulations as a class that need not be a member of the dispute resolution scheme.

136 Section 43S amended (Supplementary empowering provision for regulations and rules)

Repeal section 43S(1)(fa).

Part 4 Building and housing

137 Principal Act

This Part amends the Construction Contracts Act 2002 (the principal Act).

138 Section 11A amended (Application of this Act: savings provisions relating to Construction Contracts Amendment Act 2015)

After section 11A(2), insert:

(3)

Subpart 2A of Part 2 (which relates to retention money) does not apply to a construction contract that was entered into before 31 March 2017 unless—

(a)

the contract is renewed for a further term on or after 31 March 2017 (in which case that subpart applies only in relation to retention money withheld during the further term); or

(b)

the parties agree that subpart 2A will apply.

Schedule 1 Transitional, savings, and related provisions for amendments to Companies Act 1993

s 32

Schedule 1AA Transitional, savings, and related provisions

s 8A

Part 1 Provisions relating to Regulatory Systems (Commercial Matters) Amendment Act 2016

1 Financial reporting and annual report amendments

This Act, as amended by sections 18 to 25 of the Regulatory Systems (Commercial Matters) Amendment Act 2016, applies to a company or an overseas company in relation to the following accounting periods:

(a)

an accounting period that commenced before, but ends on or after, the commencement of this clause:

(b)

accounting periods that commence on or after the commencement of this clause.

Schedule 2 Transitional, savings, and related provisions for amendments to Takeovers Act 1993

s 125

Schedule 1AA Transitional, savings, and related provisions

s 2B

Part 1 Provisions relating to Regulatory Systems (Commercial Matters) Amendment Act 2016

1 Application of sections 47 to 53

(1)

Sections 47 to 53 apply in relation to an offer or a takeover notice only if the takeover notice is received by the target company on or after the date on which this clause comes into force.

(2)

In this clause, offer, takeover notice, and target company have the same meanings as in the takeovers code.