Financial Markets Conduct Regulations 2014

Interpretation

1 Interpretation

(1)

In this schedule,—

closed scheme means a superannuation scheme, or workplace savings scheme, that—

(a)

was closed to new members on its registration as a registered scheme; and

(b)

remains closed to new members

closed section means a section of a superannuation scheme, or workplace savings scheme, that—

(a)

was closed to new members on the scheme’s registration as a registered scheme; and

(b)

remains closed to new members

individual asset means the total holdings of a unique asset, unless otherwise provided

investment option means an investment option that may be selected by an investor (for example, an investment in a particular fund, a multi-fund investment option, or a life cycle investment option)

life cycle investment option means an investment option under which the allocation of the investor’s investments to funds is automatically adjusted in line with the age of the investor

life cycle stage, in relation to a life cycle investment option, means—

(a)

a stage during which an investor’s investment is allocated to a particular fund or funds in accordance with the option; or

(b)

if clause 24(4) applies, a representative life cycle stage described in the PDS

managed investment products means the managed investment products that are being offered under the PDS

manager’s basic fee, in relation to a fund, means the fee or fees charged by the manager in respect of the fund

multi-fund investment option

(a)

means an investment option that may be selected by an investor that involves investment in 2 or more funds in allocations set by the manager for that option; but

(b)

does not include a life cycle investment option

open section means a section of a superannuation scheme, or workplace savings scheme, that is not a closed section

proxy voting policies means policies relating to the exercise of proxy voting rights in relation to a fund’s assets

relevant date means,—

(a)

in relation to information under clause 53(1) that is provided for the purposes of regulations 37 and 40 (content of register entries when PDS is lodged), the last day of the most recent quarter before the date of the PDS; and

(b)

in relation to a fund update or in relation to the information lodged under clause 54 at the same time or before a fund update is lodged, the last day of the quarter or disclosure year or the balance date as at which the fund update is prepared (as identified under regulation 57(d))

Example

Regulations 37 and 40 require the register entry to contain the information in clause 53(1)(c)(i) when the PDS is lodged. That subparagraph refers to a description of the fund under clause 57, including the fund’s net asset value as at the relevant date. In this case, the relevant date is the last day of the most recent quarter before the date of the PDS.

Each fund update must also contain information specified under clause 57. But in this case, the relevant date under clause 57 is the last day of the quarter or disclosure year or the balance date as at which the fund update is prepared.

In addition, the information on the register entry must be updated as at the relevant date of the fund update. This updating is achieved by lodging the information with the Registrar when the fund update is lodged (see clause 54(1)(a)).

scheme means the managed fund to which the managed investment products relate

trade allocation policies means policies relating to how trades that are ordered contemporaneously on behalf of multiple funds or investors are apportioned

trade execution policies means policies relating to how trades are executed on behalf of a fund

valuation and pricing methodology means a methodology for valuing the fund’s assets and liabilities and attributing the net asset value of a fund to investors’ accounts.

(2)

In these regulations, the average net asset value of a fund for a period (period A) must be calculated in accordance with the following formula:

a = Σx ÷ b

where—

a

is the average net asset value

Σx

is the sum of the net asset value as at the end of every valuation period in period A

b

is the number of valuation periods, rounded up to whole valuation periods, that the fund is in existence during period A.

(3)

In subclause (2), a valuation period is a period that corresponds to the period for valuing the fund’s assets that is adopted under the valuation policies and methodologies specified in or by the governing document for the managed fund.

Examples

If the assets are valued on a daily basis, each day is a valuation period.

If the fund is valued on a monthly basis, each month is a valuation period.

(4)

The categories of assets for the purposes of this schedule are the following:

(a)

cash and cash equivalents:

(b)

New Zealand fixed interest (which are fixed-interest assets the country of which is New Zealand):

(c)

international fixed interest (which are fixed-interest assets the country of which is not New Zealand):

(d)

Australasian equities (which are those equities the country of which is Australia or New Zealand):

(e)

international equities (which are equities the country of which is not Australia or New Zealand):

(f)

listed property:

(g)

unlisted property:

(h)

commodities:

(i)

other.

(5)

For the purposes of this schedule, the country of an asset is,—

(a)

if the asset is approved for trading on 1 or more financial product markets, the country of the financial product market that has primary jurisdiction for the listing requirements for the asset; and

(b)

if the asset is not approved for trading on a financial product market but is issued by an entity that is incorporated, the country in which the entity is incorporated; and

(c)

in any other case, the country in which the issuer or asset is located.

(5A)

However, New Zealand may be treated as being the country of a fixed-interest asset if—

(a)

the asset is denominated in New Zealand currency; or

(b)

both of the following apply:

(i)

the asset is issued by an entity that is incorporated or located in New Zealand; and

(ii)

the asset is denominated in a currency other than New Zealand currency but 1 or more derivatives are held to hedge the foreign market currency and interest rate risk so as to effectively swap exposure on the asset into an asset denominated in New Zealand currency with New Zealand interest rate risk.

(6)

In this schedule, a reference to the issue or sale means the issue or sale of the managed investment products that are being offered under the PDS.

Schedule 4 clause 1(1) closed scheme: inserted, on 28 October 2016, by regulation 16(1) of the Financial Markets Conduct Amendment Regulations (No 2) 2016 (LI 2016/249).

Schedule 4 clause 1(1) closed section: inserted, on 28 October 2016, by regulation 16(1) of the Financial Markets Conduct Amendment Regulations (No 2) 2016 (LI 2016/249).

Schedule 4 clause 1(1) investment option: amended, on 17 December 2015, by regulation 41(1) of the Financial Markets Conduct Amendment Regulations 2015 (LI 2015/276).

Schedule 4 clause 1(1) life cycle stage paragraph (a): amended, on 17 December 2015, by regulation 41(2) of the Financial Markets Conduct Amendment Regulations 2015 (LI 2015/276).

Schedule 4 clause 1(1) life cycle stage paragraph (b): replaced, on 17 December 2015, by regulation 41(3) of the Financial Markets Conduct Amendment Regulations 2015 (LI 2015/276).

Schedule 4 clause 1(1) multi-fund investment option: inserted, on 17 December 2015, by regulation 41(4) of the Financial Markets Conduct Amendment Regulations 2015 (LI 2015/276).

Schedule 4 clause 1(1) non-fund investment option: revoked, on 17 December 2015, by regulation 41(4) of the Financial Markets Conduct Amendment Regulations 2015 (LI 2015/276).

Schedule 4 clause 1(1) open section: inserted, on 28 October 2016, by regulation 16(1) of the Financial Markets Conduct Amendment Regulations (No 2) 2016 (LI 2016/249).

Schedule 4 clause 1(5A): inserted, on 28 October 2016, by regulation 16(2) of the Financial Markets Conduct Amendment Regulations (No 2) 2016 (LI 2016/249).