This note is not part of the regulations, but is intended to indicate their general effect.
These regulations, which come into force on 1 April 2011, amend the Financial Advisers (Disclosure) Regulations 2010 (the principal regulations).
Regulation 4 inserts new regulations 9 and 10.
New regulation 9 amends the principal regulations to provide exemptions from the written disclosure requirements under the Financial Advisers Act 2008 (the Act) and the principal regulations for financial advisers when providing personalised services over the telephone or by video conference in respect of a category 2 product. These exemptions are subject to the conditions specified in new regulation 10.
New regulation 9(4) provides that, to avoid doubt, nothing in new regulation 9 or 10 prevents an adviser from choosing to provide full disclosure, in accordance with section 22(1) or 25(1) of the Act, as the case may be, and the principal regulations.
The conditions applying to the exemptions in new regulation 9 are set out in new regulation 10. The conditions are that, before the service is provided, oral disclosure must be made to the client, informing the client of the following:
that the adviser is a registered financial adviser, an authorised financial adviser, or a QFE adviser, as the case may be; and
that the adviser or the adviser's employer or principal belongs to a dispute resolution scheme; and
the name of that scheme; and
any matters that are required to be orally disclosed in accordance with terms and conditions imposed on the adviser by the Securities Commission; and
that the adviser will, if requested by the client, provide the client with full disclosure, in accordance with the Act and the disclosure regulations.
If a client requests full disclosure, the adviser must comply with that request. Full disclosure must be provided whether the request is made before, during, or at any time after the service is provided (new regulation 10(2)).
Oral disclosure may be made directly by the adviser, or by way of a pre-recorded message or other electronic means (new regulation 10(3)).
Date of notification in Gazette: 24 March 2011.
These regulations are administered by the Ministry of Economic Development.