Financial Markets (Regulators and KiwiSaver) Bill

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Hon Simon Power

Financial Markets (Regulators and KiwiSaver) Bill

Government Bill



Explanatory note

1 Title

2 Commencement

Part 1
Preliminary provisions

3 Purpose of Parts 1 to 4

4 Interpretation

5 Act binds the Crown

Part 2
Financial Markets Authority

Establishment of FMA

6 Financial Markets Authority established

7 FMA is Crown entity

FMA's main objective and functions

8 FMA's main objective

9 FMA's functions

Membership of board of FMA

10 Membership of board of FMA

11 Associate members

12 Associate member treated as member of board

13 Removal of associate members

Provisions relating to divisions

14 FMA may act by divisions

15 Membership, chairperson, meetings, and resolutions of division

16 Powers of division

Provisions relating to meetings of FMA

17 Quorum for meetings of FMA

18 Completion of proceedings where member unable to attend meeting

19 Assent to resolution without meeting

Miscellaneous matters

20 Minister may request that FMA inquire and report

21 Provisions relating to Government Superannuation Fund

22 Protection from liability for FMA and members and employees

23 FMA's warnings, reports, guidelines, or comments protected by qualified privilege

24 Evidence of orders and decisions of FMA

Part 3
General information-gathering and enforcement powers

Subpart 1General information-gathering powers

Power to obtain information, documents, and evidence

25 FMA may require person to supply information, produce documents, or give evidence

26 Powers of FMA to receive evidence

27 How evidence may be given

28 Witnesses' expenses

Power to enter and search place

29 Power to enter and search place

Subpart 2Sharing information and documents

Power to share information and documents with other law enforcement or regulatory agencies

30 Sharing of information and documents with law enforcement or regulatory agencies

Power to act on requests of overseas regulators

31 Power of FMA to act on requests of overseas regulators

32 FMA's consideration of requests


33 Conditions that may be imposed on providing information, documents, or evidence to other agencies or regulators

Subpart 3FMA may exercise person’s right of action

34 FMA may exercise person’s right of action

35 Requirements for FMA exercising person’s right of action

36 High Court may grant leave

37 Procedural requirements for leave to exercise person’s right of action

38 Costs of proceedings to be met by person

39 Powers of High Court for proceedings exercising person’s right of action

40 Representative actions

41 Proceedings must not be settled, compromised, or discontinued without approval

Subpart 4Other powers

Power to make confidentiality orders

42 Power to make confidentiality orders

43 Publication or disclosure with FMA's consent

Power to accept undertakings

44 FMA may accept undertakings

45 Enforcement of undertakings

Power to state case for opinion of High Court

46 FMA may state case for opinion of High Court

Power to require warning to be disclosed

47 FMA may require its warning to be disclosed

Subpart 5Miscellaneous provisions relating to powers

FMA may authorise person to obtain information or documents

48 Power to authorise person to obtain information or documents

49 Requirements for persons authorised to obtain information or documents

50 Disclosure of information or documents from exercise of powers

51 Non-disclosure of information or documents from exercise of powers under section 25

52 Protection from liability for persons exercising powers


53 Witnesses and counsel to have privileges of witnesses and counsel in court

Effect of proceedings on exercise of powers

54 Effect of proceedings

55 Effect of final decision that exercise of powers under section 25 unlawful


56 Criminal liability for obstructing exercise of powers

Other miscellaneous provisions

57 Notices

58 Service of notices

59 Powers not limited

60 Limitation on disclosure of information obtained in FMA's operations

61 Part does not limit Privacy Act 1993

Part 4
Miscellaneous provisions

Subpart 1Fees, charges, costs, and levies

62 Regulations relating to fees, charges, and costs

63 Levy of financial markets participants

64 FMA must consult about request for appropriation

Subpart 2Transitional provisions

65 Interpretation

Disestablishment of Securities Commission

66 Securities Commission disestablished

67 Consequences of disestablishment

68 References to Securities Commission

69 Transfer of employees

70 Effect of Act

71 Registers

Disestablishment of office of Government Actuary

72 Office of Government Actuary disestablished

73 Consequences of disestablishment

74 References to Government Actuary

Miscellaneous provisions

75 Ministry of Economic Development employees

Subpart 3Amendments to other enactments

76 Amendments to other enactments

77 Amendments consequential on replacement of Commission by FMA

78 Amendments consequential on replacement of Government Actuary by FMA

Part 5
Amendments to Securities Act 1978

79 Principal Act amended

80 Long Title amended

81 Interpretation

82 Meaning of advertisement

83 Exemptions from this Act

84 Exemption for employer superannuation schemes

85 Previously allotted securities

86 Term implied in certain offers of previously allotted securities

87 Part 1 repealed

88 Restrictions on offer of securities to public

89 Restrictions on distribution of prospectuses

90 Void irregular allotments

91 Court must make relief order in certain circumstances

92 Consent for purposes of section 37AC(1)(c) or (d)

93 Voidable irregular allotments

94 Prohibition of advertisements

95 Section 38F repealed

96 Requirements relating to prospectuses delivered to Registrar for registration

97 New sections 42 to 43M substituted

FMA's consideration of prospectuses, amendments, trust deeds, and deeds of participation

FMA's powers to prohibit distribution of investment statements, prohibit allotments, or cancel registration of prospectuses

98 New heading and sections 43N to 43S inserted

Register of securities

99 Notices and submissions concerning delayed allotment orders

100 Limited notice and submissions for urgent delayed allotment orders

101 Notices and submissions concerning prohibition orders

102 Commission's powers in respect of contributory mortgages

103 Sections 46 to 47A substituted

104 New sections 54C to 54F inserted

105 Which persons are liable for misstatements

106 Which experts are liable for misstatements

107 Criminal liability for misstatement in advertisement or registered prospectus

108 Section 59A substituted

109 Other offences

110 When Court may make management banning orders

111 Persons automatically banned from management

112 When Court may prohibit payment or transfer of money, securities, or other property

113 New sections 65G and 65H inserted

114 Section 66 repealed

115 Part 3 repealed

116 Heading to Part 4 amended

117 Regulations and Orders in Council

118 New section 70AB inserted

119 Fees and charges

120 New sections 70B to 70D inserted

121 Matters that must be stated in regulations implementing application regime

122 Schedule 1 repealed

Transitional provisions

123 Registration of prospectus continues

124 Regulations for purposes of section 123

125 Registration of deeds continues

126 Prospectuses, amendments, and deeds delivered but not yet registered must be dealt with under old law

127 Exemptions continue in force

Part 6
Amendments to Securities Markets Act 1988

128 Principal Act amended

129 Interpretation

130 Purpose of this subpart

131 Public issuers must disclose in accordance with listing rules if continuous disclosure listing rules apply

132 Heading to subpart 1 of Part 2B amended

133 Registration of exchanges

134 New subpart 1A of Part 2B inserted

Key requirements

Process for approving new market rules and changes

Miscellaneous provisions on market rules

Market integrity regulations

Application of subpart to futures markets

135 Heading above section 36S substituted

136 Heading above section 36X and sections 36X to 36Z repealed

137 Heading to subpart 2 of Part 2B substituted

138 New heading and sections 36Y to 36YF inserted

General obligations of registered exchange

139 Registered exchange must notify Commission of disciplinary actions and suspected contraventions

140 Registered exchange must give Commission material information given to market participants

141 When disclosure of material information required

142 Form and method of disclosure

143 New section 36ZK substituted

144 Power to disclose further information

145 Commission may give directions to registered exchanges

146 Offence

147 New heading and section 36ZXA inserted

Application of subpart to futures markets

148 New subpart 3 of Part 2B inserted

149 Interpretation of terms used in this Part

150 Dealers in futures contracts to be authorised

151 New Part inserted

Securities Markets Rulings Panel

Divisions of Rulings Panel




Hearings and decisions


Reviews of decisions

152 Only 1 pecuniary penalty order may be made for same conduct

153 Penalties for failing to comply with Part 2B

154 Persons automatically banned from management

155 No pecuniary penalty and fine for same conduct

156 New heading and section 47A inserted


157 New sections 48 to 48B substituted

158 New section 49CA inserted

159 New Schedule added

Transitional provisions

160 Transitional provisions for conduct rules and registered exchanges

161 Exemptions continue in force

162 Consequential amendment to Remuneration Authority Act 1977

163 Amendment to Securities Markets Amendment Act 2002

Part 7
Amendments to KiwiSaver Act 2006

164 Principal Act amended

165 Interpretation

166 Meaning of provider

167 Application

168 Effect on existing members of change, etc, in employer chosen scheme

169 Notification of transfers and requirement to transfer funds and information

170 Involuntary transfers

171 Compulsory employer contribution amount: general rule

172 Schemes eligible to be KiwiSaver scheme

173 New sections 116A to 116D inserted

174 Additional duty of independent trustees

175 Heading above section 118 repealed

176 KiwiSaver scheme must be treated as registered superannuation scheme for most purposes

177 New headings and sections 119 to 122 substituted

Trust deeds

Financial information

Prospective members' rights to information

Members' rights to information

178 New heading inserted

Annual reports, returns, and statements

179 Requirement for annual report

180 Requirement for annual return

181 Requirement for annual personalised statement of contributions and accumulations for members

182 KiwiSaver scheme rules are implied in trust deeds establishing KiwiSaver scheme

183 Section 128 repealed

184 Amendment of trust deed or participation agreement governing KiwiSaver scheme

185 New sections 129A and 129B and heading inserted

Reversion of scheme assets to employer

186 Consent to reversion of assets to employer

187 Applications for registration of scheme governed by trust deed

188 Section 132 repealed

189 Matters required to be specified in application

190 Registration of scheme

191 Heading above section 135, heading above section 148, and sections 135 to 155 repealed

192 Contents of register in relation to KiwiSaver schemes

193 Cancellation of registration and order to wind up KiwiSaver scheme

194 New section 168A inserted

195 Powers of FMA in event of scheme operating in contravention of this Act, etc

196 Implied terms continue to be implied on cancellation of registration

197 Receiver or liquidator to designate or appoint independent trustee if required

198 Initial steps in winding up of KiwiSaver scheme

199 New section 174A inserted

200 Appointment of default providers

201 Power of High Court to act in respect of terms and conditions of appointment as default KiwiSaver scheme and regulations relating to default KiwiSaver schemes

202 Offence to fail to provide information under this Part

203 Application of section 13G of Trustee Act 1956 if power of investment exercised in relation to member allocated to scheme under sections 50 to 52

204 Certain sections of Securities Act 1978 modified in relation to KiwiSaver scheme

205 Regulations

206 Schedule 1 amended

Rules applying to KiwiSaver schemes other than restricted schemes

Rules applying to all KiwiSaver schemes

207 Schedule 2 amended

Consequential amendments

208 Consequential amendments

Transitional provisions

209 Interpretation

210 Registrar must amend register to identify restricted schemes

211 Certain employer schemes are restricted schemes

212 Certain restricted-entry schemes are restricted schemes

213 Certain participation agreements executed before registration continue to have effect

214 Certain scheme provider agreements continue in force

215 Parties to trust deed may execute amendment to trust deed

216 References to department in instruments of appointment

Part 8
Amendments to Financial Advisers Act 2008

217 Principal Act amended

218 Office of Commissioner for Financial Advisers disestablished

Amendments to Financial Advisers Act 2008

219 Interpretation

220 Outline of this Part

221 Heading to subpart 1 of Part 4 amended

222 Heading above section 79 and sections 79 and 80 repealed

223 Section 81 substituted

224 Membership of disciplinary committee

225 Failure to comply with summons by Commissioner to attend disciplinary committee hearing

226 Levy

227 Consequential replacements of references to Commission

Transitional provisions

228 Transitional provisions for general transfer of functions of Commissioner for Financial Advisers to FMA

229 Functions of Commissioner for Financial Advisers as chair of disciplinary committee continue to reside with chair

Schedule 1
Financial markets legislation

Schedule 2
Provisions relating to search power

Schedule 3
Amendments to other enactments

Schedule 4
Amendments to replace references to Securities Commission or Government Actuary

Schedule 5
New Schedule added to Securities Markets Act 1988

Schedule 6
Amendments consequential on amendments to KiwiSaver Act 2006

Schedule 7
Amendments to replace references to Commissioner for Financial Advisers

The Parliament of New Zealand enacts as follows: