Financial Services Legislation Amendment Bill

  • enacted

Hon Kris Faafoi

Financial Services Legislation Amendment Bill

Government Bill

291—3

Contents

Key
1Title
2Commencement
Part 1
Amendments to Financial Markets Conduct Act 2013
3Principal Act
4Section 5 amended (Overview)
5Section 6 amended (Interpretation)
6Section 8 amended (Definitions relating to kinds of financial products)
7Section 9 amended (Definitions of financial benefit and of managed investment scheme)
8New section 14A and cross-heading inserted
Transitional, savings, and related provisions
14ATransitional, savings, and related provisions
9Section 18 amended (Interpretation in this Part)
10Section 28 amended (Certain conduct does not contravene various provisions)
11Section 34 amended (Prohibition of offers in course of unsolicited meetings with persons acting otherwise than in trade)
12Section 351 amended (Regulations modifying this Part or Part 7 for licensed markets)
13Section 386 amended (Overview)
14Section 387 amended (Territorial scope for licensing of certain market services)
15New section 387A inserted (Other provisions relating to financial advice services and client money or property services)
387AOther provisions relating to financial advice services and client money or property services
16Section 388 amended (When provider of market services needs to be licensed)
17Section 389 amended (Exemptions from need for market services licence)
18Section 392 repealed (Meaning of discretionary investment management service and related terms)
19Section 393 amended (Principles guiding the exercise of FMA powers)
20Section 395 amended (Application for licence)
21Section 397 amended (Procedural requirements)
21ASection 398 amended (Notice of decision)
22Section 400 amended (Licence may cover related bodies corporate as authorised bodies)
23Section 403 amended (When FMA may impose permitted conditions)
23ANew section 406A inserted (Effect of condition requiring giver of advice or interposed person to be authorised by licence or registered)
406AEffect of condition requiring giver of advice or interposed person to be authorised by licence or registered
24Section 410 amended (Meaning of material change of circumstances)
25Section 414 amended (FMA’s powers in case of contravention of market services licensee obligation, material change, etc)
26Section 426 amended (Disclosure statement)
27New subparts 5A and 5B of Part 6 inserted
Subpart 5A—Additional regulation of financial advice and financial advice services
Preliminary matters
431AOverview of financial advice and financial advice services regime
431BAdditional purpose of subpart
Interpretation
431CMeaning of financial advice and regulated financial advice
431DWhen financial advice service is provided
431DAMeaning of engaged
Offences Limitations on giving regulated financial advice and holding out
431ELimitation on who can give regulated financial advice to retail clients on behalf of financial advice provider
431FProhibitions on holding out in relation to giving financial advice
Duties on persons giving regulated financial advice
431GLiability for duties
431HDuty to meet standards of competence, knowledge, and skill
431IDuty to ensure client understands nature and scope of advice
431JDuty to give priority to client’s interests
431KDuty to exercise care, diligence, and skill
431LDuty to comply with code of conduct
431MDuty relating to offer that contravenes Act or regulations
431NDuty to make prescribed information available
431OFalse or misleading statements and omissions
Additional duties on financial advice providers and interposed persons that engage others to give advice
431PPersons engaging others to give advice must ensure compliance with duties
431QDuties of persons who engage nominated representatives
Miscellaneous provisions
431RProtection of individual who reports breach
431SNomination of nominated representatives
431TLimitation on pecuniary penalty orders against financial advice providers
Subpart 5B—Regulation of client money or property services
Interpretation
431UOverview of client money or property services regime
Interpretation
431VMeaning of client money or property service and certain other terms
Disclosure obligations for services for retail clients
431WProvider must make disclosure before receiving client money or client property from retail client
431XFalse or misleading statements and omissions
Conduct obligations
431YApplication of conduct obligations
431ZProvider must exercise care, diligence, and skill
431ZAProvider must not receive client money if offer contravenes Act or regulations
Obligations for handling client money and client property
431ZBProvider must pay client money into separate trust account and hold client property on trust
431ZCProvider must account for client money and client property
431ZDProvider must keep records of client money and client property
431ZEProvider must report on client money and client property
431ZFRestrictions on use of client money and client property
431ZGProtection of client money and client property held on trust
Persons acting in course of business of employers or principals
431ZHWho is responsible for obligations
28New section 432A inserted (Meaning of discretionary investment management service and related terms)
432AMeaning of discretionary investment management service and related terms
29Section 446 replaced (Certain broker obligations of Financial Advisers Act 2008 may be enforced also under this Act)
446Certain client money or property service obligations under subpart 5B apply
30Section 449 amended (Part 6 services provisions)
31Section 451 amended (Meaning of FMC reporting entity)
32Section 452 amended (Company that issues equity securities not FMC reporting entity if fewer than 50 shareholders)
33Section 462 amended (When FMA may make stop orders)
34Section 469 amended (Terms of direction orders)
35Section 475 amended (FMA must follow steps before making orders)
36Section 489 amended (When court may make pecuniary penalty orders)
37Section 499 amended (General defences for person in contravention)
38Section 500 amended (Disclosure defences for person in contravention)
39Section 501 amended (Additional disclosure or financial reporting defence for directors who are treated as contravening)
40Section 503 amended (General defences for person involved in contravention)
41Section 507 amended (No pecuniary penalty and fine for same conduct)
42Section 511 amended (Offence of knowingly or recklessly contravening other provisions relating to defective disclosure)
43Section 518 amended (Terms of banning orders)
44New sections 532A to 532C inserted
532AAppeals against decisions of disciplinary committee
532BOrders as to publication of names
532CAppeal on question of law
45Section 543 amended (Regulations for purposes of Part 3 (Disclosure of offers of financial products))
46Section 546 amended (Regulations for purposes of Part 6 (market services))
47Section 548 amended (Other regulations)
48Section 550 amended (Procedural requirements for regulations relating to exemptions, exclusions, and definitions)
49Section 562 amended (FMA’s designation power)
50Section 563 amended (Procedural requirements)
51New section 571A inserted (Deferral of obligations to publish, notify, and make available non-class exemptions)
571ADeferral of obligations to publish, notify, and make available non-class exemptions
52Heading to subpart 8 of Part 9 amended
53Section 597 repealed (Transitional provisions)
54Schedule 1 amended
55Schedule 2 amended
56Schedule 3 amended
57Schedule 4 amended
58New Schedule 5 inserted
Part 2
Amendments to Financial Service Providers (Registration and Dispute Resolution) Act 2008
59Principal Act
60Section 4 amended (Interpretation)
61Section 5 amended (Meaning of financial service)
62Section 6 amended (Meaning of in the business of providing a financial service)
63Section 7 amended (Application of Act)
64New section 7A inserted (Application of Act)
7AApplication of Act
65Section 8A replaced (Territorial scope)
8ATransitional, savings, and related provisions
66Section 10 amended (Registration and deregistration)
67Heading to subpart 1 of Part 2 replaced
Subpart 1—Requirements for registration and being member of approved dispute resolution scheme and prohibition against holding out
68Section 11 amended (No being in business of providing financial service unless registered and member of approved dispute resolution scheme)
69Section 12 amended (No holding out that in business of providing financial service unless registered and member of approved dispute resolution scheme)
69ANew section 12A inserted (Registration for certain overlapping services not required)
12ARegistration for certain overlapping services not required
70Section 14 amended (Disqualified person)
71Section 15 amended (Application to be registered as financial service provider)
72Section 16 amended (Registration of financial service provider)
73Section 17 amended (Duty to notify changes relating to financial service provider)
74Section 18 amended (Deregistration of financial service provider)
75Section 20 amended (Objection to proposed deregistration of financial service provider)
76Section 21 amended (Notification of deregistration of financial service provider)
77Section 22 amended (Reregistration of financial service provider)
78New sections 22A to 22C 22D and cross-headings inserted
22ARegistrar must not reregister financial adviser if direction has been made
Suspension of registration
22BSuspension of registration
Registration of financial advisers
22CRegistration of financial advisers
22DFinancial adviser may be deregistered if not engaged by provider for extended period
78ASection 26 amended (Purposes of register)
79Section 27 amended (Contents of register)
80Section 29 amended (Registrar must amend register in certain circumstances)
81Section 34 amended (Sharing information with other persons or bodies)
82Section 37 amended (Registrar’s inspection powers)
83Section 42 amended (Appeals from Registrar’s decisions and FMA directions)
84Section 44 amended (Regulations under Part 1 and this Part)
84ANew sections 44A and 44B inserted
44AWho financial adviser is treated as engaged by when engaged indirectly
44BFMA acts as licensing authority in relation to operators of financial product markets
84BSection 48 amended (Financial service provider must be member of dispute resolution scheme)
85New section 48A inserted (When financial adviser is exempt from being member)
48AWhen financial adviser is exempt from being member
86Section 49 amended (Who are retail clients)
87Section 67 replaced (Duty to co-operate and communicate information in certain circumstances)
67Duty to co-operate and communicate information in certain circumstances
87ASection 79 amended (Regulations under this Part)
88New Schedule 1AA inserted
89Schedule 2 amended
Part 3
Repeals and amendments to other Acts
90Repeals and revocations
91Consequential amendments
Schedule 1
New Part 6 inserted into Schedule 4 of Financial Markets Conduct Act 2013
Schedule 2
New Schedule 5 inserted into Financial Markets Conduct Act 2013
Schedule 3
New Schedule 1AA inserted into Financial Service Providers (Registration and Dispute Resolution) Act 2008
Schedule 4
Consequential amendments
Legislative history

The Parliament of New Zealand enacts as follows: