Financial Advisers Act 2008

Before its repeal, this Act was administered by: Ministry of Business, Innovation, and Employment
  • repealed
  • Financial Advisers Act 2008: repealed, on 15 March 2021, by section 97(1) of the Financial Services Legislation Amendment Act 2019 (2019 No 8). Section 138(1)(a)(iii) corrected on 15 March 2021 under section 25(1)(j)(iii) and (iv) of the Legislation Act 2012.

Reprint as at 15 March 2021

Coat of Arms of New Zealand

Financial Advisers Act 2008

Public Act
 
2008 No 91
Date of assent
 
27 September 2008
Commencement
 
see section 2

Financial Advisers Act 2008: repealed, on 15 March 2021, by section 97(1) of the Financial Services Legislation Amendment Act 2019 (2019 No 8).

Note

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

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

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

Contents

1Title
2Commencement
Part 1
Preliminary provisions
3Purpose of Act
4Overview of Act
5Interpretation
5AWho are clients
5BWho are retail clients
5CWho are wholesale clients
5DWho are eligible investors
5EAcceptance of certification
5FRevocation of certification
5GHow to opt out of being wholesale client
5HGiving revocation of certification or notification of opt out
5IMeaning of acting on behalf of B’s business and acting through A
6Act binds the Crown
Part 2
Financial advisers and their disclosure and conduct obligations
7Outline
Subpart 1—Key definitions for financial adviser services
What are financial adviser services
8Who is financial adviser
9What is financial adviser service
10When person gives financial advice
11When person provides investment planning service
12When person provides discretionary investment management service
13Exemption for incidental service
14Other exemptions
When financial adviser service is personalised service or class service
15When financial adviser service is personalised service or class service
Subpart 1A—Restrictions on providing financial adviser services
16Types of financial adviser
Restrictions on providing financial adviser services
17Who may provide financial adviser service
18Who is permitted to provide personalised service to retail clients
19Who is permitted to provide class service to retail clients
20Who is permitted to provide financial adviser service to wholesale clients
Restrictions on holding out
20AWho may hold themselves out as authorised financial adviser
20BWho may hold themselves out as financial planner or investment planner
20CWho may hold themselves out as QFE or having QFE status
Persons acting in course of business of employers and principals
20DApplication of FSP Act to employees, etc
20EWho must be member of dispute resolution scheme
20FWho is responsible for financial adviser obligations
Subpart 2—Financial advisers’ disclosure and conduct obligations
Disclosure obligations for personalised services for retail clients
21What is disclosure obligation and when does it apply
22Financial adviser must make disclosure before providing personalised service to retail client
23What financial adviser must disclose
24Disclosure statement
25QFE must make disclosure before personalised service provided to retail client
26Disclosure by qualifying financial entity [Repealed]
27Disclosure must not be misleading, deceptive, or confusing
28Disclosure of additional information
29No compliance with disclosure obligations if disclosure out of date
29AFurther prescribed information to be made available to clients of discretionary investment management service
30Advertisement advertising financial adviser services by authorised financial adviser must refer to disclosure statement
31Disclosure by 2 or more financial advisers in joint disclosure statement
Conduct obligations
32What is conduct obligation and when does it apply
Conduct obligations that apply to all financial advisers
[Repealed]
33Financial adviser must exercise care, diligence, and skill
34Financial adviser must not engage in misleading or deceptive conduct
35Advertisement by financial adviser must not be misleading, deceptive, or confusing
36Regulations may impose specific conduct obligations for class services to retail clients
Conduct obligations that apply to authorised financial advisers only
37Authorised financial adviser must comply with code
38Authorised financial adviser must not recommend acquisition of FMCA financial products if offer contravenes financial markets legislation
39Duties when providing discretionary investment management service to retail clients
40Duty to comply with professional standard of care in providing discretionary investment management service to retail clients
41Need for client agreement with retail client for discretionary investment management services
42Contents, form, and effect of client agreement
43Requirement for agreed investment authority with retail client
44Custodial duties under discretionary investment management service provided to retail client
45Authorised financial adviser must comply with terms and conditions of his or her authorisation
45AAuthorised financial adviser may report breach of Act to FMA
Conduct obligations related to QFEs
46QFE must comply with terms and conditions of grant of QFE status
47QFE or member of QFE group must not engage in misleading or deceptive conduct in relation to financial adviser service by employee, agent, or nominated representative
48Advertisement by QFE or member of QFE group in relation to financial adviser service must not be misleading, deceptive, or confusing
FMA’s direction in respect of breach of disclosure or conduct obligation
49FMA may give financial adviser direction in respect of breach of disclosure or conduct obligation
Part 3
Authorised financial advisers and qualifying financial entities
50Outline of this Part
Subpart 1—Authorised financial advisers
51Who is authorised financial adviser
52Who may apply to be authorised
53Application to be authorised
54Eligibility to be authorised
55FMA must approve or decline application for authorisation
55AVariation of terms and conditions and period of authorisation
56FMA must notify Registrar of authorisation
57Termination of authorisation
58Renewal of authorisation
FMA’s powers in relation to default by authorised financial adviser
59FMA’s powers in relation to default by authorised financial adviser
60Reasonable opportunity to be heard
61FMA may give authorised financial adviser direction
62Other provisions concerning FMA’s powers in relation to default by authorised financial adviser
Subpart 2—Qualifying financial entities
63What is qualifying financial entity (QFE)
64Who may apply for QFE status
65Application for QFE status
66Eligibility for QFE status
67FMA must approve or decline application for QFE status
67AAssociated entities may be subject to special terms and conditions in certain cases
68Determination of application
69Name of QFE group
70FMA must notify Registrar of grant of QFE status
Commission’s powers in relation to default by QFE
[Repealed]
71Addition of associated entities
72Termination of status of associated entity
73Certification of QFE group
74Nominated representatives of QFEs or partner entities
Liability of employee or agent
[Repealed]
75Variation of terms and conditions and period of grant of QFE status
75ATermination of QFE status
75BFMA may designate certain QFE products as beyond scope of QFE advisers
75CRenewal of QFE status
FMA’s powers in relation to default by QFE or by members of QFE group
75DFMA’s powers in relation to QFE default
75EReasonable opportunity to be heard
75FFMA may give QFE direction
75GOther provisions concerning FMA’s powers in relation to QFE default
QFE’s obligations
76Ongoing obligations of QFEs and of partner entities
77QFE must provide annual report to FMA
Part 3A
Brokers’ disclosure and conduct obligations
Who is broker and what is broking service
77AWho is broker
77BWhat is broking service
77COther exemptions
Disclosure obligations for services for retail clients
77DWhat is disclosure obligation and when does it apply
77EBroker must make disclosure before receiving client money or client property from retail client
77FWhat broker must disclose and form of disclosure
77GDisclosure must not be misleading, deceptive, or confusing
77HDisclosure of additional information
77INo compliance with disclosure obligation if disclosure out of date
Brokers’ conduct obligations
77JWhat is conduct obligation and when does it apply
77KBroker must exercise care, diligence, and skill
77LBroker must not engage in misleading or deceptive conduct
77MAdvertisement of broking services must not be misleading, deceptive, or confusing
77NRestriction on use of term sharebroker [Repealed]
77OBroker must not receive client money if offer contravenes financial markets legislation
Obligations for handling client money and client property
77PBroker must pay client money into separate trust account and hold client property on trust
77QBroker must account for client money and client property
77RBroker must keep records of client money and client property
77RABroker must report on client money and client property
77SRestrictions on use of client money and client property
77TProtection of client money and client property held on trust
Application of Trusts Act 2019
77TAApplication of Trusts Act 2019
Persons acting in course of business of employers or principals
77UWho is responsible for broker obligations
FMA’s direction in respect of breach of disclosure or conduct obligation
77VFMA may give broker direction in respect of breach of disclosure or conduct obligation
Part 4
How financial advisers and brokers are regulated
78Outline of this Part
Subpart 1—Code of professional conduct and code committee
Commissioner for Financial Advisers
[Repealed]
79Commissioner for Financial Advisers [Repealed]
80Functions of Commissioner [Repealed]
Code committee
81Establishment of code committee
82Functions of code committee
83Membership of code committee
84Proceedings of code committee
85Certain provisions of Crown Entities Act 2004 apply to members of code committee
85AFunding of code committee
Code of professional conduct for authorised financial advisers
86Content of code
87Code committee must prepare code
88FMA’s approval of draft code
89FMA may require revision or consultation
90FMA’s approval of revised draft code
91Deadline for FMA’s approval of draft code
92Minister’s approval required
93Deadline for Minister’s approval of draft code
94Code comes into force by Gazette notice
Changes to code
95Changes to code
Subpart 2—Complaints and disciplinary proceedings
Who deals with complaints
96Complaint about financial adviser
97Investigation by FMA
Complaint about authorised financial adviser
98Reference of complaint to disciplinary committee
99Disciplinary committee must give notice of complaint to financial adviser concerned
100Content of disciplinary committee’s notice of complaint
101Disciplinary committee may discipline authorised financial adviser for breach of code
102Reasonable opportunity to be heard
Disciplinary committee
103Minister must establish disciplinary committee
104Functions of disciplinary committee
105Membership of disciplinary committee
106Proceedings of disciplinary committee
107Disciplinary committee may hear evidence in disciplinary proceeding
108District Court may authorise disciplinary committee to summon witnesses on disciplinary matters
109Issuing of summons by disciplinary committee
110Serving of summons
111Witnesses’ fees, allowances, and expenses
112Protection for witnesses and counsel in disciplinary proceeding
113Certain provisions of Crown Entities Act 2004 apply to members of disciplinary committee
113AFunding of disciplinary committee
Subpart 3—Offences
Offences: Restrictions on providing services and holding out
114Offence of providing financial adviser service without being permitted to do so
115Offence of holding out as authorised financial adviser, financial planner, investment planner, or QFE
116Offences in relation to employer or principal failing to maintain registration [Repealed]
Disclosure offences: Financial advisers, QFEs, and brokers
117Failure to make disclosure under or in accordance with disclosure obligation
Conduct offences: Financial advisers and brokers
118Offence of misleading or deceptive conduct by financial adviser or broker
119Offence of misleading, deceptive, or confusing advertisement by financial adviser or broker
120Offence of contravening restrictions on use of term sharebroker [Repealed]
Offences: Authorised financial advisers only
121Offence of recommending offer that contravenes financial markets legislation
122Offence of contravening requirement that authorised financial adviser pay client’s money into separate trust account [Repealed]
123Offence of failing to account for client’s money or other property [Repealed]
124Offence in relation to records of client’s money or property [Repealed]
125Offence of breaching restrictions on use of client’s money or property [Repealed]
126Offence of failing to comply with terms and conditions of authorisation
127Offence of failing to comply with FMA’s direction
128Offence of contravening condition of disciplinary committee’s order
Offences: QFEs and QFE groups only
129Offence of failing to comply with terms and conditions of QFE status
130Offence of misleading or deceptive conduct in relation to financial adviser service by employee, agent, or nominated representative
131Offence of misleading, etc, advertisement of financial adviser service by employee, agent, or nominated representative
132Offence of failing to comply with FMA’s direction
133Offence of failing to comply with obligations in relation to authorised financial advisers
134Offence of failing to provide annual report
134ADefence to offences relating to entities in QFE groups
Offences: Broking services only
134BOffence of receiving client money if offer contravenes financial markets legislation
134COffence of contravening requirement to pay client money into separate trust account and hold client property on trust
134DOffence of failing to account for client money and client property
134EOffence in relation to records of client money and client property
134EAOffence of failing to report on client money and client property
134FOffence of breaching restrictions on use of client money and client property
134GOffence of failing to comply with FMA’s direction
Miscellaneous offences
135Offence of failing to comply with FMA’s direction in respect of breach of disclosure or conduct obligation
Miscellaneous offences
[Repealed]
136Offence of false declaration, etc, in support of application for authorisation or grant of QFE status
137Failure to comply with summons to attend disciplinary committee hearing
Subpart 4—Injunctions and other remedies
Injunctions
137AInjunctions against contraventions
137BUndertaking as to damages not required by FMA
137CWhen court may make banning order [Repealed]
137DTerms of banning orders [Repealed]
137EOffence of contravening banning order [Repealed]
Orders to preserve assets to satisfy claims
[Repealed]
137FWhen High Court may prohibit payment or transfer of money, securities, or other property [Repealed]
137GWhat orders may be made [Repealed]
137HInterim orders [Repealed]
137IRelationship with other law [Repealed]
137JOffence of breaching orders [Repealed]
Pecuniary and compensatory orders for contravening wholesale certification requirement or conduct obligations related to discretionary investment management service
137KPecuniary order for contravening wholesale certification requirement or conduct obligations related to discretionary investment management service
137LCompensation for contravention of wholesale certification requirement
Temporary banning orders against financial adviser and broker
137MWhen FMA may make temporary banning orders for financial adviser services or broking services
137NTerms of temporary banning order
Process for FMA’s orders
137OFMA must follow steps before making orders
137PFMA may shorten steps for specified orders
137QFMA must give notice after making orders
137RGeneral provisions on temporary banning orders
137SOffence of failing to comply with FMA’s orders
Part 5
General provisions
Appeal of decisions
138Right of appeal
139Notice of right of appeal
140Decision to have effect pending determination of appeal
141Procedure on appeal
142Court’s decision final
143Court may refer matter back for reconsideration
144Orders as to costs
145Orders as to publication of names
146Appeal on question of law
Securities Commission: General powers
[Repealed]
147Commission may exercise powers under Securities Act 1978 [Repealed]
Standard conditions for incorporation in authorisation and grants
147AApproval of standard conditions for incorporation in authorisations and grants of QFE status
147BRequirement to consult on proposal to incorporate material by reference
147CVariation or revocation of standard conditions
147DWhen standard conditions come into force
147EIncorporation of changed standard conditions into existing authorisations or grants
Exemptions
148FMA may grant exemptions
148AFMA may vary or revoke exemption
148BStatus of exemptions, variations, or revocations
149FMA must notify reasons for exemption other than class exemption
150Implied provisions
Information sharing
151Information sharing
Fees
152FMA’s fees, charges, and costs
153Levy [Repealed]
Regulations
154General regulations
155Regulations relating to fees, charges, and costs
Other matters
156No contracting out
157Territorial scope
158Breach of exemption conditions
159Exemption or regulation in respect of specified overseas jurisdictions [Repealed]
160Time for filing charging document
161Ministry must review and report on operation of Act
Other legislation affected
161AFinancial Service Providers (Registration and Dispute Resolution) Act 2008 amended [Repealed]
162KiwiSaver Act 2006 amended
163Securities Act 1978 amended
164Securities Markets Act 1988 amended
165Sharebrokers Act 1908 repealed
166Securities Markets (Investment Advisers and Brokers) Regulations 2007 revoked
Transitional provisions
167Transitional provisions for existing offences and contravention under Securities Markets Act 1988
168Grant of authorisations in transitional period without prior inquiry into convictions
Financial Advisers Amendment Act 2011
Reprint notes