Financial Markets Conduct Act 2013

11 Definitions of issued and issuer

(1)

In this Act,—

(a)

a financial product is issued to a person when it is first issued, granted, or otherwise made available to a person (subject to subsection (2)):

(b)

issuer means, in relation to—

(i)

a debt security, the person that is liable to repay money or pay interest or other returns under the security (other than as a guarantor):

(ii)

an equity security, the company, industrial and provident society, building society, or other entity to which the security relates:

(iii)

a managed investment product, the manager of the managed investment scheme to which the product relates:

(iv)

a derivative, the derivatives issuer that entered into the derivative.

(2)

Despite subsection (1)(a),—

(a)

a managed investment product that is an interest in a superannuation scheme, KiwiSaver scheme, workplace savings scheme, or other prescribed scheme is issued to a person when the person becomes a member of the scheme:

(b)

a derivative is issued to a person when the person enters into the legal relationship that constitutes the derivative:

(c)

none of the following are taken to give rise to the issue of a financial product to a person (A):

(i)

A making a further contribution to, or investment in, a superannuation scheme, a KiwiSaver scheme, a workplace savings scheme, or any other prescribed scheme of which A is already a scheme participant:

(ii)

an employer of A or any other person making, for the benefit of A, a further contribution to, or investment in, a superannuation scheme, a KiwiSaver scheme, a workplace savings scheme, or any other prescribed scheme of which A is already a scheme participant:

(iii)

A making a further deposit into a prescribed deposit product:

(iv)

A engaging in conduct specified in regulations made for the purposes of this subparagraph in relation to a financial product already held by A.

(3)

Despite subsection (1)(b), if a debt security is offered for the purposes of a managed investment scheme, the manager of the scheme is the issuer for the purposes of this Act.

(4)

If each person that enters into a derivative is a derivatives issuer, each of those persons is the issuer.

Example

A and B enter into a futures contract.

Both A and B are derivatives issuers. Accordingly, both A and B are issuers of the futures contract.

Although both parties are issuers, whether any particular party has disclosure or other obligations will depend on the circumstances.

If both A and B hold a market services licence, both A and B will be wholesale investors under clause 37(1)(f) of Schedule 1. Accordingly, neither party will be required to make disclosure under Part 3 to the other party.

(5)

In this Act, a reference to an issuer in relation to events, circumstances, or other matters before the financial products are issued is a reference to the person that will be, or is intended to be, the issuer when those products are issued.

(6)

In this Act, a person ceases to be an issuer in relation to financial products when those products are cancelled, redeemed, or forfeited, or all of the obligations owing under those products have been discharged.

(7)

Subsections (1) to (6) are subject to a declaration under section 562(1)(g).

(8)

For the purposes of this Act, the issue of a financial product is not a sale of the financial product.

(9)

If the terms of a financial product require or allow the person acquiring the product to pay separate amounts of money at different times, each of those payments must, for the purposes of this Act, be treated as payment for the same financial product as each of those other payments.