Financial Markets Conduct Act 2013

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Reprint as at 15 September 2018

Financial Markets Conduct Act 2013

Public Act		2013 No 69
Date of assent		13 September 2013
Commencement		see section 2

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.

1	Title
2	Commencement
	Part 1 Preliminary provisions
	Purposes
3	Main purposes
4	Additional purposes
	Overview
5	Overview
	Interpretation
6	Interpretation
7	Meaning of financial product
8	Definitions relating to kinds of financial products
9	Definitions of financial benefit and of managed investment scheme
10	Miscellaneous matters relating to definition of derivative
11	Definitions of issued and issuer
12	Meaning of associated person and related body corporate
13	Miscellaneous interpretation provisions relating to statements and information
14	Status of examples
	Act binds the Crown
15	Act binds the Crown
	General application provision
16	Application of Act
	Part 2 Fair dealing
17	Overview
18	Interpretation in this Part
	Misleading or deceptive conduct, false or misleading representations, and unsubstantiated representations
19	Misleading or deceptive conduct generally
20	Misleading conduct in relation to financial products
21	Misleading conduct in relation to financial services
22	False or misleading representations
23	Unsubstantiated representations
24	Court must have regard to certain matters
25	Limitation on commencement of proceedings in relation to unsubstantiated representations
26	Section 23 does not apply to representations in PDSs, register entries, or other disclosure documents
27	Section 23 subject to other enactments
28	Certain conduct does not contravene various provisions
29	Limited application of provisions in relation to newspapers, magazines, broadcasting, etc
30	Defence for publisher
31	Licensed market operator does not contravene by notifying disclosures
32	Other exceptions
33	Territorial scope of sections 19 to 23
	Offers in course of unsolicited meetings
34	Prohibition of offers in course of unsolicited meetings with persons acting otherwise than in trade
35	Right to withdraw
36	Offeror obligations if notice of withdrawal given
37	Director not liable if no misconduct or negligence
	Civil liability
38	Civil liability for certain contraventions of this Part
	Part 3 Disclosure of offers of financial products
	Subpart 1—Application
39	Issue offers that need disclosure
40	Sale offers that need disclosure
41	Meaning of regulated offer and of regulated product
42	Regulated offers that need to meet additional governance requirements
43	Options over financial products
44	Treatment of offers of convertible financial products
45	Treatment of offers of renewals and variations
46	Offers of financial products involving customised terms
47	Territorial scope of Part
	Subpart 2—Procedure for making regulated offers
	Product disclosure statement must be prepared and lodged
48	PDS must be prepared and lodged
49	Purpose of PDS
	Disclosure to investors
50	PDS must be given if offer requires disclosure
51	Certain situations in which section 50 does not need to be complied with
52	PDS treated as having been given if application form used was included in, or accompanied by, PDS
53	Offence to knowingly or recklessly contravene section 50
54	Right to withdraw
55	Offeror obligations if notice of withdrawal given
56	Director not liable if no misconduct or negligence
	Content and presentation of product disclosure statements and register entries
57	Disclosure of material information and content of PDS and register entry
58	Register entry not required in prescribed circumstances
59	Meaning of material information in this Part
60	Consent of experts and persons who make endorsements
61	PDS must be worded and presented in clear, concise, and effective manner
62	PDS must comply with prescribed requirements relating to form and presentation
	Other provisions relating to lodging of PDS and other documents
63	Supply of prescribed information
64	Registrar must notify FMA of lodgement of PDS
65	Waiting period after lodgement before processing applications for financial products
66	FMA may extend period
67	Waiting period restriction does not prevent offeror from acting under another PDS
68	FMA may remove restrictions if its consideration complete or consideration or further consideration unnecessary
69	Waiting period does not usually apply to continuous issue PDSs
70	No guarantee or representation as to compliance
71	When supplementary document or replacement PDS may be lodged
72	Supplementary document
73	Replacement PDS
74	Registrar must notify FMA of lodgement of supplementary document or replacement PDS
75	Publication of lodgement
	Amending register entry
76	When register entry may be amended
	Conditions referred to in PDS
77	Minimum number or amount condition must be fulfilled before issue or transfer
78	Issue or transfer void if quotation condition not fulfilled
	Dealing with applications where condition referred to in PDS not met or disclosure defective
79	Application of section 80
80	Choices open to offeror
81	Director not liable if no misconduct or negligence
	Prohibition of offers where defective disclosure in PDS or register entry
82	False or misleading statements, omissions, and new matters requiring disclosure
83	Persons who must inform offeror about disclosure deficiencies
	Expiry
84	Expiry
85	How offeror must deal with applications on expiry
86	Director not liable if no misconduct or negligence
	Money for financial products must be held in trust
87	Money for financial products must be held in trust
	Offering financial products in entity that does not exist
88	Offering financial products of entity that does not exist
	Subpart 3—Advertising
89	Advertising for regulated offers
90	Distribution of PDS or registered documents
91	Advertising before PDS lodged
92	Advertising after PDS lodged
93	Documents to which subpart does not apply
94	Defence for publishers
	Subpart 4—Ongoing disclosure and updating of registers
	Duty to update register of offers of financial products and register of managed investment schemes
95	Duty to notify changes to Registrar
	Disclosure to particular persons
96	Information to be made available to investors, FMA, Registrar, or other prescribed persons
	Public disclosure
97	Information to be made publicly available
98	Issuer must provide information to Registrar
	Defective ongoing disclosure
99	Defective ongoing disclosure
	Confirmation
100	Issuer or offeror must provide confirmation
	Subpart 5—Civil liability for certain contraventions of this Part
101	Part 3 offer provisions
	Part 4 Governance of financial products
102	Overview
	Subpart 1—Governance of debt securities
103	Need for governing document and supervisor for regulated offer of debt security
	Governing document requirements
104	Contents of trust deed for debt securities
105	Limits on permitted exemptions and indemnities
106	Trust deed must be legally enforceable
107	Effect of trust deed
108	Changes to trust deed
109	Power to make FMA-approved changes to trust deeds
110	Lodging of changes to trust deed
	Role of supervisor
111	Functions of supervisor
112	General duties applying in exercise of supervisor’s functions
113	Duty of supervisor to comply with professional standard of care
114	Duty of issuer to provide reports to supervisor
115	Duty of issuer to provide requested information and reports to supervisor
116	Issuer must report contravention or possible contravention of issuer obligations
117	Restriction on use of reports on contraventions
118	Duty of issuer to report serious financial problems
119	Power of supervisor to engage expert
	Meetings of product holders
120	Meetings of product holders
121	Supervisor’s attendance at meetings of product holders and power to appoint chair
	Change of supervisor
122	Change of supervisor
123	Lodging of notice of change of supervisor
	Subpart 2—Governance of managed investment products
124	Overview
	Need to register
125	Need to register managed investment scheme for regulated offer of managed investment product
	Registration
126	Application for registration
127	Initial and ongoing registration requirements for all managed investment schemes
128	Additional initial and ongoing registration requirements for KiwiSaver schemes
129	Additional initial and ongoing registration requirements for superannuation schemes
130	Additional initial and ongoing registration requirements for workplace savings schemes
131	Additional ongoing registration requirements for restricted schemes
132	Additional prescribed registration requirements for other particular prescribed types of schemes
133	Manager must ensure that ongoing registration requirements are complied with
134	Changes to registration as particular type of registered scheme
	Governing document requirements
135	Contents of governing document for registered scheme
136	Limits on permitted exemptions and indemnities
137	Governing document must be legally enforceable
138	Effect of governing document
139	Changes to governing document
140	Power to make FMA and court-approved changes to governing documents
141	Lodging of changes to governing document
	Role of manager
142	Management and administration functions of manager
143	General duties applying in exercise of manager’s functions
144	Duty of manager and investment manager to comply with relevant professional standard of care
145	Duties of directors and senior managers of manager
146	Contracting out of management functions
147	Duty of manager to provide reports to supervisor or FMA
148	Duty of manager to provide requested information and reports to supervisor
149	Duty of manager to report contravention or possible contravention of issuer obligations
150	Restriction on use of reports on contraventions
151	Duty of manager to report serious financial problems
	Role of supervisor
152	Functions of supervisor
153	General duties applying in exercise of supervisor’s functions
154	Duty of supervisor to comply with professional standard of care
155	Power of supervisor to engage expert
	Custodianship of scheme property
156	Requirement to have supervisor or other independent person as custodian
157	Custodian holds scheme property on trust
158	Custodian must keep records of scheme property
159	Custodian must report on scheme property
160	Duty of supervisor to refuse to act on wrongful directions
	Meetings of scheme participants
161	Meetings of scheme participants
162	Supervisor’s attendance at meetings of scheme participants and power to appoint chair
163	Manager and associated persons cannot vote if interested in resolution
	Management of scheme
164	Requirement for statement of investment policy and objectives
165	Changes to statement of investment policy and objectives
166	Lodging of statement of investment policy and objectives and changes to statement
167	Action that must be taken on limit breaks
168	Action that must be taken on pricing errors and failure to comply with pricing methodologies
169	Actuarial examination of defined benefit scheme or life benefit scheme
170	Power of manager to adjust financial benefits to comply with portfolio investment entity rules
171	Limits on reversion of scheme property in certain schemes to non-scheme participant contributor
	Related party transactions
172	Definition of related party benefit
173	General prohibition on transactions giving related party benefits
174	Certain related party benefits permitted
175	Requirements for certificates as to related party benefits
176	Additional restrictions on acquisitions by restricted schemes of in-house assets
177	General duties not affected
	Scheme participant transfer rules for KiwiSaver, superannuation, and workplace savings schemes
178	Application of scheme participant transfer rules
179	Methods of transfer of scheme participants to another scheme or another section of scheme
180	Transfer of substantial numbers of scheme participants with scheme participant consent
181	Transfer with FMA consent
182	Transfers from KiwiSaver scheme
	Provisions as to deferred benefits for superannuation schemes and workplace savings schemes
183	Deferred benefits
	Change of manager
184	Application of sections 185 to 192
185	Removal of manager of registered scheme
186	Supervisor or FMA may make temporary appointment
187	Term, powers, and duties of temporary manager
188	FMA’s costs must be reimbursed from scheme
189	Supervisor or FMA must take reasonable steps to arrange for new appointment
190	Former manager must hand over records and give reasonable assistance
191	Statutory novation of rights, obligations, and liabilities of former manager
192	Lodging of notice of changes to manager
	Change of supervisor
193	Change of supervisor
194	Lodging of notice of change of supervisor
	Cancellation of registration
195	Cancellation of registration
196	Registrar must remove scheme from register on cancellation of registration
	Subpart 3—Intervention in debt securities offered under regulated offer or registered schemes
	Provisions assisting supervisor or FMA to intervene
197	Application
198	Duty of auditor to report to supervisor or FMA
199	Duty of auditor, investment manager, administration manager, custodian, or actuary to report serious problems
200	What person must do if duty to report serious problem applies
201	Protections extend to volunteers of supporting information for other protected disclosures
202	FMA may require supervisor to attest as to issuer’s compliance with issuer obligations
203	Duty of supervisor to report contravention or possible contravention of issuer obligations to FMA
204	Duty of supervisor to report serious financial problems to FMA
205	FMA’s powers of direction
206	FMA’s directions to supervisor (or issuer)
	Powers to obtain court orders to intervene
207	Power of supervisor or FMA to apply for order to remedy problems
208	Court orders to remedy problems
209	Power of court to appoint new manager, provide for manager powers, and deal with changes of managers
210	Power of court to direct supervisor
211	Court power to order winding up of scheme
212	Initial steps in winding up of registered scheme
213	Winding-up report
	Miscellaneous
214	Protection for persons in respect of disclosure under this subpart or subpart 4
	Subpart 4—Registers and keeping copies of documents
	Registers
215	Issuers must keep registers of regulated products
216	Manner of keeping registers
217	Contents of registers
218	Audit or review of registers
219	Auditor must advise if auditor considers that subpart is not being complied with
220	Issuer must notify Registrar of registers
221	Public inspection of register
222	Manner of inspection
223	Copies of documents
224	Reasons for request must be given and FMA may authorise non-compliance
225	Restriction on use of information in registers
226	Certain provisions prevail over Companies Act 1993
	Copies of documents to be retained
227	Copies of documents must be retained for 7 years
	Subpart 5—Civil liability for certain contraventions of this Part
228	Part 4 governance provisions
	Part 5 Dealing in financial products on markets
	Subpart 1—Purposes, overview, and interpretation
229	Additional purposes of Part
230	Overview
	Material information and generally available to the market
231	Meaning of material information
232	Meaning of generally available to the market
	Certain derivatives treated as being quoted financial products of listed issuer
233	Certain derivatives treated as being quoted financial products of listed issuer
	Insider conduct
234	Meaning of information insider, inside information, and adviser
	Relevant interests
235	Relevant interests in financial products (basic rule)
236	Extension of basic rule to powers or controls exercisable through trust, agreement, etc
237	Extension of basic rule to interests held by other persons under control or acting jointly
238	Situations not giving rise to relevant interests
	Territorial scope
239	Territorial scope
	Subpart 2—Insider trading
	Insider conduct prohibited
240	Prohibition on insider conduct
241	Information insider must not trade
242	Information insider must not disclose inside information
243	Information insider must not advise or encourage trading
244	Criminal liability for insider conduct
	When prohibition on insider conduct does not apply
245	Exception for trading required by enactment or rule of law
246	Exception for disclosure required by enactment or rule of law or by FMA
247	Exception for disclosure in connection with preparing PDS or limited disclosure document
248	Exceptions in respect of underwriting agreements
249	Exceptions in case of knowledge of person’s own intentions or activities
250	Exceptions in case of knowledge in relation to derivatives
251	Exception for agent executing trading instruction only
252	Exceptions from section 241 for takeovers
253	Exceptions from sections 242 and 243 for takeovers
254	Exceptions for schemes of arrangement approved under Companies Act 1993
255	Exception for redemption of managed investment products
256	Exception for Reserve Bank
	Defences
257	Absence of knowledge of trading
258	Inside information obtained by independent research and analysis
259	Equal information
260	Options and trading plans
261	Chinese wall defence
	Subpart 3—Market manipulation
262	False or misleading statement or information
263	Exception for takeovers
264	Criminal liability for false or misleading statement or information
265	False or misleading appearance of trading
266	Exception for short selling and crossings
267	Persons treated as contravening false or misleading appearance of trading prohibition
268	Defence
269	Criminal liability for false or misleading appearance of trading
	Subpart 4—Continuous disclosure
270	Listed issuers must disclose in accordance with listing rules if continuous disclosure listing rules apply
271	What are continuous disclosure provisions
272	No contravention of continuous disclosure provisions by person who takes reasonable steps to ensure listed issuer complies
	Subpart 5—Disclosure of interests of substantial product holders in listed issuers
	Substantial holding disclosure obligations
273	Purposes of subpart
274	Meaning of substantial product holder, substantial holding, and percentage
275	Person may be treated as holding financial products where person has relevant interest in certain derivatives
276	Persons must disclose if begin to have substantial holding
277	Substantial product holders must disclose if subsequent movement of 1% or more in holdings
278	Substantial product holders must disclose if subsequent changes in nature of relevant interests
279	Persons must disclose if cease to have substantial holding
280	What disclosure required
281	Form and method of disclosure
282	Listed issuer must give acknowledgement of disclosure
283	How to ascertain total financial products in class for purposes of disclosure
	Exemptions
284	Exemption for persons with interest in other substantial product holders who comply
285	Exemption for corporate trustees and nominee companies
286	Conditions of exemption for corporate trustees and nominee companies
287	Exemption for persons under control or acting jointly with corporate trustees and nominee companies
288	Extended time for disclosure for trustees, executors, and administrators
	Tracing and disclosure of interests in listed issuers
289	FMA may require persons to disclose to market relevant interests and powers to acquire relevant interests
290	Listed issuer may require registered holder or relevant interest holder to disclose relevant interests to it
291	Listed issuer may require person who has relevant interest to disclose information to it
292	Form and method of notice requiring disclosure
293	Listed issuers must make available information on substantial holdings
294	No liability for publication of substantial holdings
295	Notice under this subpart not to affect incorporation of listed issuer or constitute notice of trust
	Subpart 6—Disclosure of relevant interests in quoted financial products by directors and senior managers of listed issuers
296	Purposes of subpart
297	Directors and senior managers of listed issuers must disclose relevant interests and dealings in relevant interests
298	Disclosure of relevant interests and dealings in relevant interests in relation to specified derivatives
299	What disclosure required
300	Form and method of disclosure
301	Disclosure obligation applies for 6 months after ceasing to hold office
302	Exemption for directors or senior managers who disclose substantial holdings
303	Exemption for overseas listed issuers
303A	Extended time for disclosure for trustees, executors, and administrators
304	Listed issuer must keep interests register
305	Public inspection of interests register
306	Copies of documents
307	Offences relating to interests register
	Subpart 7—Licensing of markets for trading financial products
308	Principles guiding exercise of powers under this subpart
	Need for financial product market licence
309	What is a financial product market
310	Need for financial product market licence
311	Prohibitions on holding out
312	Exemptions
313	When financial product market taken to be operated in New Zealand
	General obligations of licensed market operator
314	General obligations in respect of licensed markets
	Issue of licence
315	Application for licence
316	When licence may be issued
317	When licence may be issued for overseas-regulated market
318	Conditions of licence
319	Procedural requirements
320	Licence may cover more than 1 financial product market
321	FMA must maintain list of licensed markets on Internet site
	Changes to licences
322	Variation of conditions
323	Minister may suspend or cancel licence
324	Procedure for varying of conditions or suspension or cancellation of licence
325	Effect of suspension
326	Variation or revocation of suspension
	Approval of contractual market rules
327	Licensed markets must be operated under market rules that comply with this subpart
328	Required matters for market rules
329	When market rules have effect
330	Approval process for proposed market rules and rule changes
331	Approval of proposed market rules and changes
332	Notice of decision on rules
333	Power of FMA to request changes to market rules on certain matters
334	Overseas-regulated markets must give notice of market rules and rule changes to FMA
335	Market rules must be available for public inspection
336	Application of Acts relating to regulations to contractual market rules
	Monitoring of market operator obligations
337	Licensed market operator must give report on compliance with market operator obligations to FMA
338	FMA to carry out market operator obligations reviews
339	FMA must make written report on market operator obligations review
340	FMA may require licensed market operator to submit action plan on failure to meet market operator obligations
341	Approval, amendment, or rejection of action plan
342	Minister may give market operator obligations direction to licensed market operator
343	Minister may vary, suspend, or cancel licence
	Control limits on licensed market operators
344	Power to impose control limits on licensed market operators
345	Control limit not to be exceeded
346	Effect of exceeding control limit
347	Application for approval to exceed control limit
348	Revocation or amendment of approval
	Other provisions relating to licensing of financial product markets
349	FMA may give advice to Minister
350	Delegation of Minister’s licensing functions and powers to FMA
351	Regulations modifying this Part or Part 7 for licensed markets
	Subpart 8—Operation of licensed markets
352	Licensed market operator must notify FMA of disciplinary actions and suspected contraventions
353	When notification required
354	Details and method of notification
355	Licensed market operator must ensure FMA has access to real-time trading and other information
356	Waiver of notification and disclosure obligations
357	Licensed market operator must give FMA or Takeovers Panel other information and assistance on request
358	Power to disclose further information
359	Licensed market operator must give notice and have regard to submissions on continuous disclosure determinations
360	Limited notice and submissions for urgent determinations
361	FMA may give directions to licensed market operators
362	Grounds for continuous disclosure direction
363	Grounds for other directions
364	Notice, opportunity for licensed market operator to act, and submissions before FMA gives directions
365	Limited notice and submissions for urgent continuous disclosure directions
366	Notice and opportunity to be heard and represented after FMA gives direction
367	Effect of directions to licensed market operator
368	Provisions as to directions
369	Contracting out of or modification of continuous disclosure process requirements
370	Offence for failing to comply with direction
	Subpart 9—Transfer of transferable financial products
371	Financial products to which this subpart applies
	Transfer of specified financial products using transfers in prescribed form or containing prescribed information
372	Transfer of specified financial products by products transfer
373	Transfer of specified financial products by products transfer and brokers transfer
374	Products transfer does not need to be witnessed
375	Transfers to be instruments of transfer for purposes of other enactments and instruments
	Transfer of specified financial products by electronic means
376	Approval of electronic transfer system
377	Specified financial products may be transferred under approved system
378	Minor technical modifications to system
	Registration may not be refused
379	Registration may not be refused on ground that financial products have been transferred under this subpart
380	Effect of this Act on other enactments
	Subpart 10—Unsolicited offers to purchase financial products off-market
381	Definitions relating to unsolicited offer regulations and related provisions
382	Regulations concerning unsolicited offers
383	Specific provisions for regulations concerning unsolicited offers
384	Protection from liability in connection with unsolicited offer provisions
	Subpart 11—Civil liability for certain contraventions of this Part
385	Part 5 market provisions
	Part 6 Licensing and other regulation of market services
386	Overview
387	Territorial scope for licensing of certain market services
	Subpart 1—Key provisions
388	When provider of market services needs to be licensed
389	Exemptions from need for market services licence
390	When providers of other market services may be licensed
391	Prohibitions on holding out
392	Meaning of discretionary investment management service and related terms
	Subpart 2—Issue of licences, conditions, and duration
393	Principles guiding the exercise of FMA powers
	Issue of licences
394	FMA may issue licence
395	Application for licence
396	When licence must be issued
397	Procedural requirements
398	Notice of decision
399	Licence must be issued for particular market services
400	Licence may cover related bodies corporate as authorised bodies
401	FMA must send licence details to Registrar
	Conditions of licence
402	Conditions of licence
403	When FMA may impose permitted conditions
404	Licensee may apply for variation of conditions
405	Procedure for variation of conditions
406	Consequences of contravening conditions
	Expiry, suspension, or cancellation of licences
407	Duration of licence
408	When FMA may suspend or cancel licence
409	Effect of expiry, suspension, or cancellation of licence on appointments
	Subpart 3—Monitoring and enforcement of licences
410	Meaning of material change of circumstances
	Reports
411	Licensee must deliver reports to FMA
412	Licensee must report certain matters
413	Restriction on use of report
	FMA’s powers in case of contravention of market services licensee obligation, material change, etc
414	FMA’s powers in case of contravention of market services licensee obligation, material change, etc
415	Procedure for exercising powers
416	Notice requirements
	Action plan
417	Action plan
418	Approval, amendment, or rejection of action plan
419	Consequences of failure to submit action plan, rejection of action plan, or failure to comply with action plan
	Directions
420	Directions
421	Consequences of failure to comply with directions
	Subpart 4—Disclosure obligations for certain services provided to retail investors
422	Application of subpart
423	Disclosure must be made to retail investor
424	Timing and method of disclosure
425	Purpose of disclosure statement
426	Disclosure statement
426A	Further prescribed information to be made available
427	False or misleading statements and omissions
428	Miscellaneous provisions relating to false or misleading statements and omissions
	Subpart 5—Requirement for certain services to be provided under client agreements
429	Application of subpart
430	Need for client agreement
431	Contents, form, and effect of client agreement
	Subpart 6—Additional regulation of discretionary investment management services
432	Application of subpart
	Duties of DIMS licensee
433	DIMS licensee’s duties
434	Duties of directors and senior managers of DIMS licensee
435	Duty of DIMS licensee to comply with professional standard of care
436	Limits on permitted indemnities
437	Requirement for agreed investment authority
438	Action that must be taken on limit breaks
	Related party transactions
439	Definition of related party benefits
440	General prohibition on transactions giving related party benefits
441	Certain related party benefits permitted
442	Requirements for certificates as to related party benefits
443	General duties still apply
	Broking and custodial service performed as part of discretionary investment management service
444	Meaning of investor money and investor property
445	Requirements for custodian
446	Certain broker obligations of Financial Advisers Act 2008 may be enforced also under this Act
	Subpart 7—Holding and application of investor funds and property by derivatives issuers
447	Application of regulations made under this subpart
448	Regulations regulating holding and application of investor funds and property by derivatives issuers
	Subpart 8—Miscellaneous provisions
	Civil liability
449	Part 6 services provisions
	Part 7 Financial reporting
	Subpart 1—Overview, application, and interpretation
450	Overview
451	Meaning of FMC reporting entity
452	Company that issues equity securities not FMC reporting entity if fewer than 50 shareholders
453	Recipients of money from conduit issuers
454	Miscellaneous provisions relating to application
	Subpart 2—Accounting records
455	FMC reporting entities must keep proper accounting records
456	Place where accounting records to be kept
457	Accounting records to be in English
458	Period for which accounting records to be kept
459	Inspection of accounting records
	Subpart 3—Preparation, audit, and lodgement of financial statements
	Preparation of financial statements
460	Financial statements must be prepared
461	Group financial statements must be prepared
461A	Financial statements for registered schemes and funds
461B	Financial statements for overseas FMC reporting entity to include financial statements for New Zealand business
461C	Failure to comply with authoritative notice does not give rise to pecuniary penalty
	Audit of financial statements
461D	Financial statements must be audited
461E	Meaning of qualified auditor
461F	Audit must be carried out in accordance with auditing and assurance standards
461G	Auditor’s report
	Lodgement of financial statements
461H	Lodgement of financial statements
	Offences
461I	Offence to knowingly fail to comply with financial reporting standards
	FMC reporting entities with higher level of public accountability
461J	External Reporting Board must have regard to indication of level of public accountability
461K	FMC reporting entities considered to have higher level of public accountability
461L	FMA may issue notice relating to level of public accountability
	Subpart 4—Civil liability for certain contraventions of this Part
461M	Part 7 financial reporting provisions
	Part 8 Enforcement, liability, and appeals
	Subpart 1—FMA’s enforcement powers
	Stop orders
462	When FMA may make stop orders
463	Terms of stop order
464	Meaning of restricted communication
465	FMA may make interim stop order pending exercise of powers
466	Persons to whom stop orders and interim stop orders may apply
467	Extended application of subpart
	Direction orders
468	When FMA may make direction orders
469	Terms of direction orders
	Order to prohibit use of simplified disclosure PDS
470	FMA may order that simplified disclosure PDS may not be used
	Order to prohibit offer under recognition regime
471	FMA may order that offer may not be made under recognition regime
	Unsolicited offer orders
472	When FMA may make unsolicited offer orders
473	Terms of unsolicited offer orders
	Orders that exclusion does not apply
474	FMA may order that exclusion for offers of products of same class as quoted products does not apply
	Process for FMA’s orders
475	FMA must follow steps before making orders
476	FMA may shorten steps for specified orders
477	FMA must give notice after making orders
	General provisions
478	General provisions on FMA’s orders
479	Consequences of failing to comply with FMA’s orders
	Subpart 2—High Court’s enforcement powers
	Injunctions
480	Court may grant injunctions
481	When court may grant injunctions and interim injunctions
482	Undertaking as to damages not required by FMA
	Court may make FMA orders under this Part
483	Court may make FMA orders under this Part
	Subpart 3—Civil liability
	Overview of civil liability
484	Overview of civil liability
485	What are civil liability provisions
	Declarations of contravention and pecuniary penalty orders
486	When court may make declarations of contravention
487	Purpose and effect of declarations of contravention
488	What declarations of contravention must state
489	When court may make pecuniary penalty orders
490	Maximum amount of pecuniary penalty
491	Guidance for court on how to determine gains made or losses avoided for purposes of maximum amount
492	Considerations for court in determining pecuniary penalty
493	Court must order that recovery from pecuniary penalty be applied to FMA’s actual costs
	Compensatory orders
494	When court may make compensatory orders
495	Terms of compensatory orders
496	Person treated as suffering loss or damage in case of defective disclosure
	Other civil liability orders
497	When court may make other civil liability orders
498	Terms of other civil liability orders
	Defences for person in contravention of civil liability provisions
499	General defences for person in contravention
500	Disclosure defences for person in contravention
501	Additional disclosure or financial reporting defence for directors who are treated as contravening
501A	Additional defence for licensees who are treated as contravening
502	Conduct still contravenes even if defence is available
	Defences for person involved in contravention of civil liability provisions
503	General defences for person involved in contravention
	Miscellaneous provisions relating to defences
504	Defendant must identify other person
	Interrelationship of civil liability orders
505	More than 1 civil liability order may be made for same conduct
506	Only 1 pecuniary penalty order may be made for same conduct
507	No pecuniary penalty and fine for same conduct
	Limitation defences
508	Limitation defences
	General
509	Rules of civil procedure and civil standard of proof apply to civil liability
	Subpart 4—Offences relating to defective disclosure and false statements
510	Offence of knowingly or recklessly contravening prohibition on offers where defective disclosure in PDS or register entry
511	Offence of knowingly or recklessly contravening other provisions relating to defective disclosure
512	General offence for false or misleading statements
	Subpart 5—Infringement offences
513	Infringement offences
514	Infringement notices
515	Procedural requirements for infringement notices
516	Payment of infringement fee
	Subpart 6—Banning orders
517	When court may make banning orders
518	Terms of banning orders
519	Offence of contravening banning order
520	Only 1 banning order may be made for same conduct
521	General provisions for banning orders
	Subpart 7—Orders to protect interests of aggrieved persons in case of financial markets investigations or proceedings
522	When court may make order to protect interests of aggrieved persons
523	What orders may be made
524	Interim orders
525	Relationship with other law
	Subpart 8—Indemnities or insurance for directors, employees, and auditors of issuers, offerors, and licensees
526	Prohibition on indemnities or insurance for directors or employees of issuers, offerors, or licensees that are not New Zealand companies
527	Permitted indemnities for certain liabilities or costs
528	Permitted insurance for certain liability or costs
529	Prohibition on indemnity or insurance for auditors of issuers, offerors, or licensees
530	Interpretation for this subpart
	Subpart 9—Appeals
531	Appeals against market services licence decisions
532	Appeals against other decisions of FMA on questions of law only
	Subpart 10—Miscellaneous
	Accessories and attribution of liability
533	Involvement in contraventions
534	Directors treated as having contravened in case of defective disclosure or financial reporting contravention
535	State of mind of directors, employees, or agents attributed to body corporate or other principal
536	Conduct of directors, employees, or agents attributed to body corporate or other principal
	Miscellaneous
537	Time for filing charging document for certain offences
538	Jurisdiction of courts in New Zealand
539	Orders to secure compliance
540	General provisions as to court’s orders
541	Persons entitled to appear before court
542	Saving of liability under Crimes Act 1961 and general law
	Part 9 Regulations, transitional provisions, and miscellaneous provisions
	Subpart 1—Regulations
543	Regulations for purposes of Part 3 (Disclosure of offers of financial products)
544	Regulations for purposes of Part 4 (governance of financial products)
545	Regulations for purposes of Part 5 (dealing in financial products on markets)
546	Regulations for purposes of Part 6 (market services)
547	Transitionals, savings, and orderly implementation of Act and related enactments [Repealed]
548	Other regulations
549	Minister must consult FMA about regulations
550	Procedural requirements for regulations relating to exemptions, exclusions, and definitions
551	Miscellaneous provisions relating to exemptions
552	Miscellaneous provisions relating to fees and charges
553	Miscellaneous provisions relating to implied provisions
554	Regulations or exemptions may require compliance with generally accepted accounting practice, standards, or FMA frameworks or methodologies
555	Different matters may be prescribed in respect of different circumstances
	Subpart 2—Exemptions
556	FMA may grant exemptions
557	Restriction on FMA’s exemption power
558	Exemption in force for not more than 5 years
559	Breach of exemption conditions
560	Exemptions in respect of specified overseas jurisdictions
561	Effect of exemptions on regulated offers
561A	Financial reporting exemptions
	Subpart 3—FMA’s designation power
562	FMA’s designation power
563	Procedural requirements
564	Transitional matters
565	FMA may make interim orders pending exercise of powers
566	Period in which interim order is in force
	Subpart 4—Frameworks or methodologies
567	Purpose
568	FMA may specify frameworks or methodologies
569	Consultation
	Subpart 5—General provisions relating to certain FMA instruments
570	Application of subpart
571	Status and publication of instruments
572	Variation and revocation
	Subpart 6—Recognition and application regimes
573	Purpose of this subpart
574	Definition of country in this subpart
	Exemption from Act and regulations for New Zealand offers under recognition regime
575	Exemption from Act and regulations for New Zealand offers under recognition regime
576	Power to exempt from Act and regulations under recognition regime
577	Matters that must be stated in regulations implementing recognition regime
578	FMA may declare failure to meet preconditions of recognition regime to be non-material
579	Offence for breach of regulations implementing recognition regime
	Extension of Act and regulations to overseas offers under application regime
580	Extension of Act and regulations to overseas offers under application regime
581	Power to extend Act and regulations under application regime
582	Matters that must be stated in regulations implementing application regime
	Subpart 7—Enforcement of overseas pecuniary penalties under application regime
583	Purpose of this subpart
584	Enforcement of overseas pecuniary penalties under application regime
585	Power to enforce overseas penalties under application regime
586	Interpretation
587	Registration of judgment
588	Effect of registration
589	Enforceability of registered judgment
590	Stay may be granted
591	Costs
592	Interest
593	Rules of private international law not to apply
594	Other regulations for registration of judgments under application regime
	Subpart 8—Transitional and miscellaneous provisions
595	Registers
596	Schedule 3 schemes
597	Transitional provisions
	Schedule 1 Provisions relating to when disclosure is required and exclusions for offers and services
	Schedule 2 Registers
	Schedule 3 Schedule 3 schemes
	Schedule 4 Transitional provisions
	Reprint notes

The Parliament of New Zealand enacts as follows:

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Financial Markets Conduct Act 2013

Financial Markets Conduct Act 2013

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