Securities Markets (Investment Advisers and Brokers) Regulations 2007

  • revoked
  • Securities Markets (Investment Advisers and Brokers) Regulations 2007: revoked, on 1 July 2011, by section 166 of the Financial Advisers Act 2008 (2008 No 91).

Reprint
as at 1 July 2011

Coat of Arms of New Zealand

Securities Markets (Investment Advisers and Brokers) Regulations 2007

(SR 2007/374)

Anand Satyanand, Governor-General

Order in Council

At Wellington this 3rd day of December 2007

Present:
His Excellency the Governor-General in Council

  • Securities Markets (Investment Advisers and Brokers) Regulations 2007: revoked, on 1 July 2011, by section 166 of the Financial Advisers Act 2008 (2008 No 91).


Note

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

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

These regulations are administered by the Ministry of Economic Development.


Pursuant to section 49C(1) of the Securities Markets Act 1988, His Excellency the Governor-General, acting on the advice and with the consent of the Executive Council and on the recommendation of the Minister of Commerce made after consultation with the Securities Commission, makes the following regulations.

Regulations

1 Title
  • These regulations are the Securities Markets (Investment Advisers and Brokers) Regulations 2007.

2 Commencement
  • These regulations come into force on 29 February 2008.

3 Interpretation
  • In these regulations, unless the context otherwise requires,—

    chartered accountant has the same meaning as in section 2 of the New Zealand Institute of Chartered Accountants Act 1996

    lawyer has the same meaning as in section 6 of the Lawyers and Conveyancers Act 2006 except that, before section 6 comes into force, lawyer means a barrister or solicitor as defined in section 2 of the Law Practitioners Act 1982

    term life insurance policy has the same meaning as in regulation 45(1) of the Securities Regulations 2009.

    Regulation 3 chartered accountant: amended, on 7 July 2010, by section 11 of the New Zealand Institute of Chartered Accountants Amendment Act 2010 (2010 No 74).

    Regulation 3 term life insurance policy: substituted, on 1 October 2009, by regulation 4 of the Securities Markets (Investment Advisers and Brokers) Amendment Regulations 2009 (SR 2009/229).

4 Exemption for telephone investment advice
  • In the case of investment advice that is given over the telephone to a member of the public,—

    • (a) the investment adviser giving the advice is exempted from the requirement in section 41J(1) of the Act that the requisite disclosure must be made in a disclosure statement; and

    • (b) if the investment adviser has previously given the recipient of the advice a disclosure statement that is out of date at the time of the telephone advice, the investment adviser is exempted from disclosing the matters required to be disclosed under section 41M(3).

5 Conditions of exemptions in regulation 4
  • Each exemption in regulation 4 is subject to the following conditions:

    • (a) before giving the telephone advice to the member of the public, the investment adviser verbally discloses to that person the matters that must be disclosed under—

      • (ii) these regulations; and

    • (b) not more than 5 working days after giving the telephone advice to the member of the public, the investment adviser sends to that person a disclosure statement that—

6 Exemption for investment advice by lawyer or chartered accountant that is necessary incident of professional advice
  • A lawyer or chartered accountant who gives investment advice to a member of the public is exempted from the requirement of disclosure in section 41A(1) of the Act if—

    • (a) the lawyer or the chartered accountant gives the investment advice in that person's professional capacity; and

    • (b) the investment advice is a necessary incident of the professional legal advice that the lawyer gives, or the professional accounting advice that the chartered accountant gives, to that member of the public.

7 Exemption for disclosure under sections 41D and 41E in certain cases
  • (1) This regulation applies when investment advice is given to a person (A) but—

    • (a) the investment advice is not given in relation to a specific investment; and

    • (b) the investment adviser giving the advice reasonably believes that the disclosure of information otherwise required under section 41D or 41E or both is not material to A in light of the general nature of the advice.

    (2) In any case to which this regulation applies, an investment adviser is exempt from disclosure under section 41D or 41E or both, subject to the conditions in subclause (3).

    (3) The exemption in subclause (2) is subject to the conditions that, if the investment adviser subsequently gives specific investment advice to A for which disclosure is required under section 41D or 41E,—

    • (a) except in the case of telephone investment advice,—

      • (i) the investment adviser must make the relevant disclosure before giving the investment advice; and

      • (ii) the disclosure must be made in accordance with section 41J; or

    • (b) in the case of telephone investment advice, the investment adviser must comply with regulation 5.

8 Additional disclosure in respect of fees and remuneration
  • (1) In the case of investment advice by an investment adviser in relation to a specific investment, for example, the purchase of specific securities, the investment adviser must also disclose the dollar amount, or a percentage formula, of any fee that will be charged to the member of the public receiving the advice, or any remuneration that the investment adviser will receive, in connection with the advice or a transaction resulting from it.

    (2) Except in the case of telephone investment advice, the disclosure must be made in accordance with section 41J.

    (3) In the case of telephone investment advice, the investment adviser must comply with regulation 5.

9 Exemption from disclosure of associated person's interest or relationship
  • (1) This regulation applies to an investment adviser (A) who is an employee of, or an independent contractor to, another person (B) and gives investment advice in the course of B's business.

    (2) A is exempted from the requirement under section 41E(1) to disclose an interest or relationship that B has if—

    • (a) B has in place an internal information barrier and other procedures necessary to prevent A from knowing of the interest or relationship; and

    • (b) at the time when A gives the investment advice A does not in fact know of the interest or relationship.

10 How information disclosed in disclosure statement must be set out
  • A disclosure statement must comply with the following requirements:

    • (a) the disclosure document must be prominently identified, with a clear heading that includes the term disclosure statement; and

    • (b) the disclosure statement must express the required information clearly, concisely, and in a manner likely to bring the information to the attention of a reasonable person; and

    • (c) the disclosure statement must contain a specific heading relating to each item of the required information; and

    • (d) if the disclosure statement is combined with or contained in any other document provided to the member of the public, it must be placed at the beginning or front of the document or documents.

11 Exemption for advice in relation to term life insurance policy
  • (1) Subject to subclause (2), a person (A) who, on any occasion, gives investment advice in relation to a term life insurance policy is exempted from compliance with any investment advisers' disclosure obligation that would otherwise arise out of A giving that investment advice.

    (2) If A on the same occasion also gives investment advice in relation to a security that is not a term life insurance policy, nothing in subclause (1) exempts A from compliance with any investment advisers' obligation that arises out of A giving investment advice in relation to the security that is not a term life insurance policy.

    Regulation 11: substituted, on 29 February 2008, by regulation 5 of the Securities Markets (Investment Advisers and Brokers) Amendment Regulations 2008 (SR 2008/36).

12 Meaning of bank term deposit
  • (1) For the purposes of the definition of security in section 2(1) of the Act, bank term deposit means a fixed term deposit product offered by a registered bank in New Zealand.

    (2) In subclause (1), registered bank has the same meaning as in section 2 of the Reserve Bank of New Zealand Act 1989.

Martin Bell,
for Clerk of the Executive Council.


Issued under the authority of the Acts and Regulations Publication Act 1989.

Date of notification in Gazette: 6 December 2007.


Contents

  • 1General

  • 2Status of reprints

  • 3How reprints are prepared

  • 4Changes made under section 17C of the Acts and Regulations Publication Act 1989

  • 5List of amendments incorporated in this reprint (most recent first)


Notes
1 General
  • This is a reprint of the Securities Markets (Investment Advisers and Brokers) Regulations 2007. The reprint incorporates all the amendments to the regulations as at 1 July 2011, as specified in the list of amendments at the end of these notes.

    Relevant provisions of any amending enactments that contain transitional, savings, or application provisions that cannot be compiled in the reprint are also included, after the principal enactment, in chronological order. For more information, see http://www.pco.parliament.govt.nz/reprints/ .

2 Status of reprints
  • Under section 16D of the Acts and Regulations Publication Act 1989, reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by the amendments to that enactment. This presumption applies even though editorial changes authorised by section 17C of the Acts and Regulations Publication Act 1989 have been made in the reprint.

    This presumption may be rebutted by producing the official volumes of statutes or statutory regulations in which the principal enactment and its amendments are contained.

3 How reprints are prepared
  • A number of editorial conventions are followed in the preparation of reprints. For example, the enacting words are not included in Acts, and provisions that are repealed or revoked are omitted. For a detailed list of the editorial conventions, see http://www.pco.parliament.govt.nz/editorial-conventions/ or Part 8 of the Tables of New Zealand Acts and Ordinances and Statutory Regulations and Deemed Regulations in Force.

4 Changes made under section 17C of the Acts and Regulations Publication Act 1989
  • Section 17C of the Acts and Regulations Publication Act 1989 authorises the making of editorial changes in a reprint as set out in sections 17D and 17E of that Act so that, to the extent permitted, the format and style of the reprinted enactment is consistent with current legislative drafting practice. Changes that would alter the effect of the legislation are not permitted.

    A new format of legislation was introduced on 1 January 2000. Changes to legislative drafting style have also been made since 1997, and are ongoing. To the extent permitted by section 17C of the Acts and Regulations Publication Act 1989, all legislation reprinted after 1 January 2000 is in the new format for legislation and reflects current drafting practice at the time of the reprint.

    In outline, the editorial changes made in reprints under the authority of section 17C of the Acts and Regulations Publication Act 1989 are set out below, and they have been applied, where relevant, in the preparation of this reprint:

    • omission of unnecessary referential words (such as of this section and of this Act)

    • typeface and type size (Times Roman, generally in 11.5 point)

    • layout of provisions, including:

      • indentation

      • position of section headings (eg, the number and heading now appear above the section)

    • format of definitions (eg, the defined term now appears in bold type, without quotation marks)

    • format of dates (eg, a date formerly expressed as the 1st day of January 1999 is now expressed as 1 January 1999)

    • position of the date of assent (it now appears on the front page of each Act)

    • punctuation (eg, colons are not used after definitions)

    • Parts numbered with roman numerals are replaced with arabic numerals, and all cross-references are changed accordingly

    • case and appearance of letters and words, including:

      • format of headings (eg, headings where each word formerly appeared with an initial capital letter followed by small capital letters are amended so that the heading appears in bold, with only the first word (and any proper nouns) appearing with an initial capital letter)

      • small capital letters in section and subsection references are now capital letters

    • schedules are renumbered (eg, Schedule 1 replaces First Schedule), and all cross-references are changed accordingly

    • running heads (the information that appears at the top of each page)

    • format of two-column schedules of consequential amendments, and schedules of repeals (eg, they are rearranged into alphabetical order, rather than chronological).

5 List of amendments incorporated in this reprint (most recent first)