Financial Markets Conduct Amendment Bill - Amendment paper No 446
Financial Markets Conduct Amendment Bill - Amendment paper No 446
Financial Markets Conduct Amendment Bill - Amendment paper No 446
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No 446
House of Representatives
Amendment Paper
Financial Markets Conduct Amendment Bill
Proposed amendments
Hon Scott Simpson, in Committee, to move the following amendments:
New clause 4A
After clause 4 (page 6, after line 2), insert:
4A New section 26A inserted (Unsubstantiated representations prohibition does not apply to climate statements)
After section 26, insert:
26A Unsubstantiated representations prohibition does not apply to climate statements
(1)
Section 23 does not apply to any representations in any climate statements if the statements are prepared in accordance with—
(a)
applicable climate standards; or
(b)
an exemption granted under subpart 2 of Part 9.
(2)
This section applies regardless of whether the climate statements are required to be prepared under Part 7A (for example, it may apply to climate-related disclosures voluntarily prepared for an entity).
(3)
In this section,—
applicable climate standard—
(a)
has the meaning set out in section 6(1); and
(b)
in relation to an entity that is not a climate reporting entity, includes a climate standard within the meaning of section 5(1) of the Financial Reporting Act 2013 that is applied with all necessary modifications as if the entity were a climate reporting entity
climate statements—
(a)
has the meaning set out in section 6(1); and
(b)
includes climate-related disclosures provided under an exemption granted under subpart 2 of Part 9; and
(c)
in relation to an entity that is not a climate reporting entity, also includes climate statements within the meaning of section 6(1) applied with all necessary modifications as if the entity were a climate reporting entity.
New clauses 28A to 28Q
After clause 28 (page 19, after line 8), insert:
28A Section 461O amended (Meaning of climate reporting entity)
(1)
Repeal section 461O(2).
(2)
In section 461O(3), repeal the definition of large manager.
28B Section 461P amended (Definitions relating to listed issuers)
In section 461P(1)(a)(ii) and (b)(ii), replace “$60 million”
with “$1 billion”
.
28C Section 461Q amended (Meaning of large (in relation to registered banks, licensed insurers, credit unions, and building societies))
(1)
In section 461Q(2)(b), replace “gross premium revenue”
with “total insurance revenue”
.
(2)
In section 461Q(3), delete “, credit union, building society,”
.
(3)
In section 461Q(3)(b), replace “section 461O(1)(b) to (e)”
with “section 461O(1)(b) or (c)”
.
(4)
Replace section 461Q(4) with:
(4)
The New Zealand business of an overseas company or its group is large in respect of an accounting period if at least 1 of the following paragraphs applies (calculated as if the New Zealand business were an entity):
(a)
the overseas company is a registered bank and, as at the balance date of each of the 2 preceding accounting periods, the total assets of the New Zealand business exceed $1 billion:
(b)
the overseas company is a licensed insurer and, as at the balance date of each of the 2 preceding accounting periods, the total assets of the New Zealand business exceed $1 billion:
(c)
the overseas company is a licensed insurer and, in each of the 2 preceding accounting periods, the annual total insurance revenue of the New Zealand business exceeds $250 million.
(5)
In section 461Q(5), replace “subsection (4) must be applied in determining whether that provision applies”
with “this section must be applied in determining whether this section applies”
.
28D Section 461S repealed (Meaning of large manager)
Repeal section 461S.
28E Section 461T amended (Application if person’s status changes during accounting period)
Repeal section 461T(4).
28F Section 461V amended (Climate reporting entities must keep proper CRD records)
(1)
Repeal section 461V(2).
(2)
In section 461V(4), repeal the definition of climate statements relating to the registered scheme.
28G Section 461Y amended (Inspection of CRD records)
(1)
In section 461Y(1)(b), delete “or the manager of a registered scheme”
.
(2)
In section 461Y(1)(d), delete “or scheme”
.
28H Section 461Z amended (Climate statements must be prepared)
(1)
Repeal section 461Z(2)(c).
(2)
In section 461Z(2), repeal the example.
28I Section 461ZA amended (Group climate statements must be prepared)
Repeal section 461ZA(3)(b).
28J Sections 461ZC and 461ZD and cross-heading repealed
Repeal sections 461ZC and 461ZD and the cross-heading above section 461ZC.
28K Section 461ZE amended (Climate statements may be combined in single document)
Repeal section 461ZE(b).
28L Section 461ZG amended (Offence to knowingly fail to comply with climate standards)
Replace section 461ZG(1)(a)(iii) and (iv) with:
(iii)
the climate statements or group climate statements prepared by the entity under section 461ZB; and
28M Section 461ZH amended (Assurance engagement required for parts of climate statements relating to greenhouse gas emissions)
In section 461ZH(1), replace “461ZC”
with “461ZB”
.
28N Section 461ZHB amended (Assurance practitioner’s report)
(1)
In section 461ZHB(1), replace “461ZC”
with “461ZB”
.
(2)
In section 461ZHB(2)(c), delete “or a manager of a registered scheme”
.
28O Section 461ZHD amended (Climate reporting entity must give assurance practitioner access to information)
In section 461ZHD(1)(a) and (b), delete “or scheme”
.
28P Section 461ZI amended (Lodgement of climate statements)
Repeal section 461ZI(2).
28Q Section 461ZK amended (Part 7A climate-related disclosure provisions)
In section 461ZK(3)(b), replace “461ZC”
with “461ZB”
.
New clauses 29A and 29B
After clause 29 (page 19, after line 10), insert:
29A Section 501 amended (Additional disclosure or financial reporting or climate-related disclosure defence for directors who are treated as contravening)
(1)
In the heading to section 501, delete “or climate-related disclosure”
.
(2)
In section 501(1)(a), replace “461H, 461Z to 461ZC, 461ZH, and 461ZI”
with “and 461H”
.
29B Section 534 amended (Directors treated as having contravened in case of defective disclosure, financial reporting contravention, or climate-related disclosure contravention)
(1)
In the heading to section 534, replace “, financial reporting contravention, or climate-related disclosure contravention”
with “or financial reporting contravention”
.
(2)
Repeal section 534(1)(cb).
(3)
In section 534(3) and (5), delete “climate reporting entity,”
.
(4)
In section 534(3), delete “(cb),”
.
New clause 30A
After clause 30 (page 19, after line 18), insert:
30A New section 547 inserted (Regulations for purposes of Part 7A (Climate-related disclosures))
After section 546, insert:
547 Regulations for purposes of Part 7A (Climate-related disclosures)
(1)
The Governor-General may, by Order in Council, on the recommendation of the Minister, make regulations for the purpose of amending an amount in 1 or more of the following provisions:
(a)
section 461P(1)(a)(ii) and (b)(ii) (large listed issuers):
(b)
section 461Q(1)(a) and (4)(a) (large registered banks, credit unions, or building societies):
(c)
section 461Q(2)(a) and (b) and (4)(b) and (c) (large licensed insurers).
(2)
The regulations—
(a)
may only increase an amount; and
(b)
must not be made if the amount has been previously increased by regulations made under this section within the previous 3-year period.
(3)
The Minister must, before making a recommendation,—
(a)
consult the Financial Markets Authority and the External Reporting Board; and
(b)
consult the Reserve Bank if the regulations amend an amount in a provision referred to in subsection (1)(b) or (c); and
(c)
consult the persons or representatives of the persons that the Minister considers will be substantially affected by the regulations; and
(d)
have regard to whether the regulations—
(i)
are necessary or desirable to ensure that entities are not subject to costs of complying with Part 7A that are disproportionate to the benefits of that compliance (whether those benefits are received by the public generally, the entities, or any other persons); and
(ii)
are consistent with promoting the confident and informed participation of businesses, investors, and consumers in the financial markets; and
(e)
have regard to when entities are subject to substantially similar climate reporting requirements in the overseas jurisdictions that the Minister considers are relevant.
(4)
Sections 48 and 49 of the Financial Reporting Act 2013 do not limit this section and this section does not limit those provisions.
(5)
Regulations made under this section are secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).
Schedule 1
In Schedule 1, after new clause 107 (page 30, after line 8), insert:
108 Climate-related disclosures
(1)
The provisions of Part 7A of this Act, as amended by the Financial Markets Conduct Amendment Act 2025, apply to the following accounting periods of an entity or a scheme:
(a)
an accounting period that started before commencement (including an accounting period that ended before commencement) if commencement is before the climate statements or group climate statements for that period would otherwise be required to be lodged under Part 7A of this Act; and
Example
Before commencement, an entity (A) is a climate reporting entity in respect of a registered scheme (the scheme). On commencement, an accounting period of the scheme has just ended. The 4-month time frame for lodging the climate statements for the period under section 461ZI has not yet elapsed.
Under this clause, the amendments made by the Financial Markets Conduct Amendment Act 2025 apply to the accounting period. After those amendments are made, A is no longer a climate reporting entity and climate statements for the scheme for the accounting period no longer need to be prepared or lodged.
(b)
subsequent accounting periods.
(2)
Subclause (3) applies to a person if the person—
(a)
was a climate reporting entity immediately before commencement; but
(b)
has ceased to be a climate reporting entity on commencement.
(3)
If this subclause applies, the CRD records that the person held on commencement must continue to be held for the period referred to in section 461X (and, for that purpose, this Act continues to apply as if the Financial Markets Conduct Amendment Act 2025 had not been enacted).
(4)
Regulations 252D and 252E of the Financial Markets Conduct Regulations 2014 continue to apply to information held, immediately before commencement, on the climate-related disclosures register in respect of registered schemes (and, for that purpose, those regulations continue to apply as if the Financial Markets Conduct Amendment Act 2025 had not been enacted).
Guidance note
Regulations 252D and 252E relate to the contents of the climate-related disclosures register and to searches of that register.
(5)
In this clause, commencement means the commencement of this clause.
Schedule 3
In Schedule 3, after the Part 1 heading (page 33, after line 5), insert:
Deposit Takers Act 2023 (2023 No 35)
In Schedule 3, Part 1, item relating to the Financial Markets Conduct Act 2013, after the item relating to section 461Q(3), insert:
In section 461Q(4)(a), replace “registered bank” with “licensed bank”.
In Schedule 3, Part 1, after the item relating to section 48P of the Fair Trading Act 1986 (page 33, after line 8), insert:
In section 48R(1), after “register entry”
, insert “or a representation of the kind referred to in section 26A(1) of that Act”
.
Financial Reporting Act 2013 (2013 No 101)
In section 48(1)(a), replace “sections 461Q and 461S”
with “section 461Q”
.
In section 49(1)(i), replace “sections 461Q and 461S”
with “section 461Q”
.
Repeal section 49(1)(j).
In Schedule 3, after the Part 2 heading (page 33, after line 13), insert:
Financial Markets Authority (Levies) Regulations 2012 (SR 2012/121)
Revoke regulation 12A(2)(b).
In regulation 12A(3)(b), replace “gross premium revenue”
with “total insurance revenue”
.
Replace regulation 12A(5) to (6) with:
(5)
For the purposes of subclause (3), annual total insurance revenue means—
(a)
the annual total insurance revenue of A and A’s subsidiaries (if any); or
(b)
if A is an overseas company, the annual total insurance revenue of A’s New Zealand business or its group’s New Zealand business, calculated as if the New Zealand business were an entity (and determined after applying the financial reporting standard (or part of a standard) referred to in section 461Q(5) of the FMC Act (if any)).
In Schedule 2, item relating to class 16, replace “or (2) of the FMC Act (but subject to regulation 12A(5A))”
with “of the FMC Act”
.
Financial Markets Conduct (Fees) Regulations 2014 (LI 2014/110)
In Schedule 3, revoke clause 3 and the cross-heading above clause 3.
In Schedule 3, table, item relating to the climate statements fee, replace “or (2) of the Act or the delivery of a notice of exemption from compliance (but subject to clause 3)”
with “of the Act or the delivery of a notice of exemption from compliance”
.
In Schedule 3, table, item relating to the climate statements fee, replace “s 461ZI(1) or (2)”
with “s 461ZI(1)”
.
In Schedule 3, Part 2, after the item relating to regulation 111(b)(i) of the Financial Markets Conduct Regulations 2014 (page 33, after line 16), insert:
Revoke regulation 252D(2) and the heading above regulation 252D(2).
Revoke regulation 252E(1)(c).
In regulation 252E(2)(a) and (c), delete “or (2)”
.
Explanatory note
This Amendment Paper amends the Financial Markets Conduct Amendment Bill. The amendments concern the climate-related disclosure requirements (the requirements) in Part 7A of the Financial Markets Conduct Act 2013 (the FMCA).
The main amendments are as follows:
new section 26A of the FMCA (inserted by new clause 4A) provides that the prohibition against unsubstantiated representations in section 23 of the FMCA does not apply to representations made in climate statements if the statements are prepared in accordance with applicable climate standards (or an exemption). This provision applies regardless of whether the climate statements are required to be prepared under the FMCA or are prepared voluntarily. A similar amendment has been made in relation to the prohibition against unsubstantiated representations in the Fair Trading Act 1986:
the requirements no longer apply to registered schemes. This means, for example, that managers are no longer required to prepare climate statements for those schemes:
the thresholds at which a listed issuer is subject to the requirements are increased. Currently, a listed issuer must prepare climate statements if it has equity securities (for example, shares) that have a total value that exceeds $60 million or it has quoted debt securities with a total face value that exceeds $60 million. Those amounts are increased to $1 billion:
new clause 29B amends section 534 of the FMCA. This section provides that a director of a climate reporting entity is treated as contravening a requirement if the entity has contravened the requirement. This means that a director could be liable to pay a pecuniary penalty or compensation. The amendments remove this liability for directors:
new section 547 of the FMCA (inserted by new clause 30A) provides for certain amounts to be increased by regulations. The amounts are used to determine whether various entities are
“large”
and, accordingly, whether they are subject to the requirements. Before recommending the regulations, the Minister must consult the Financial Markets Authority, the External Reporting Board, the Reserve Bank, and persons who the Minister considers will be substantially affected. The Minister must also have regard to—whether the regulations are necessary or desirable to ensure that entities are not subject to compliance costs that are disproportionate to the benefits of compliance; and
whether the regulations are consistent with promoting the confident and informed participation of businesses, investors, and consumers in the financial markets; and
when entities are subject to substantially similar climate reporting requirements in relevant overseas jurisdictions:
terminology used in the tests for whether a licensed insurer is large is aligned with terminology used in financial reporting standards.
New clause 108 of Schedule 4 of the FMCA (inserted into Schedule 1 of the Bill) provides for transitional arrangements. The changes apply to an accounting period that started before the changes come into force if the time for lodging the climate statements for that period has not yet elapsed (and to subsequent periods).
Departmental disclosure statement
The Ministry of Business, Innovation, and Employment is required to prepare a disclosure statement to assist with the scrutiny of this Amendment Paper. The disclosure statement provides access to information about any material policy changes to the Bill and identifies any new significant or unusual legislative features of the Bill as amended.
A copy of the statement can be found at http://legislation.govt.nz/disclosure.aspx?type=ap&subtype=government&year=2025&no=446&
Regulatory impact statement
The Ministry of Business, Innovation, and Employment produced a regulatory impact statement on 29 May 2025 to help inform the new policy decisions taken by the Government relating to the contents of this Amendment Paper.
A copy of this regulatory impact statement can be found at—
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Financial Markets Conduct Amendment Bill - Amendment paper No 446
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