Fair Trading (Uninvited Direct Sales—Financial Products) Regulations 2014

2014/189

Coat of Arms of New Zealand

Fair Trading (Uninvited Direct Sales—Financial Products) Regulations 2014

Rt Hon Dame Sian Elias, Administrator of the Government

Order in Council

At Wellington this 9th day of June 2014

Present:
Her Excellency the Administrator of the Government in Council

Pursuant to section 36S of the Fair Trading Act 1986, Her Excellency the Administrator of the Government, acting on the advice and with the consent of the Executive Council and on the recommendation of the Minister of Consumer Affairs made in accordance with section 36S(2) of that Act, makes the following regulations.

Regulations

1 Title

  • These regulations are the Fair Trading (Uninvited Direct Sales—Financial Products) Regulations 2014.

2 Commencement

  • These regulations come into force on 17 June 2014.

3 Interpretation

  • (1) In these regulations, unless the context otherwise requires, FMC Act means the Financial Markets Conduct Act 2013.

    (2) Any term or expression that is defined in the FMC Act and used, but not defined, in these regulations has the same meaning as in the FMC Act.

4 Exempting agreements for issue or sale of financial product from uninvited direct sale provisions

  • An agreement for the issue or sale of a financial product is exempt from sections 36L to 36R of the Fair Trading Act 1986 if the agreement results from—

    • (a) an offer described in section 34(2)(a) of the FMC Act in respect of the exclusions in any of the following clauses of Schedule 1 of that Act:

      • (i) clauses 3 to 5 (offers to wholesale investors, close business associates, or relatives):

      • (ii) clause 7 (offers through DIMS licensees):

      • (iii) clause 8 (offers under employee share purchase schemes):

      • (iv) clause 9 (offers to persons under control) to the extent that it relates to any of clauses 3 to 5, 7, or 8 of Schedule 1 of that Act:

      • (v) clause 10 (offers under dividend reinvestment plans):

      • (vi) clause 21(a) or (c) (offers of category 2 products by a registered bank or a subsidiary of a registered bank); or

    • (b) an offer through an authorised financial adviser or a QFE adviser who is acting in the ordinary course of business as a financial adviser; or

    • (c) an offer that is an offer of quoted financial products made to an investor through a person who, under the Financial Advisers Act 2008, is permitted to give personalised financial advice to the investor in respect of those products (including as a result of an exemption by or under that Act).

Michael Webster,
Clerk of the Executive Council.

Explanatory note

This note is not part of the regulations, but is intended to indicate their general effect.

These regulations, which come into force on 17 June 2014, exempt certain classes of agreements for the issue or sale of financial products from the uninvited direct sales provisions in subpart 2 of Part 4A of the Fair Trading Act 1986. The uninvited direct sales provisions also come into force on 17 June 2014 and replace the provisions of the Door to Door Sales Act 1967.

The exemptions are based on similar exemptions in section 34 of the Financial Markets Conduct Act 2013 (which prohibits offers of financial products in the course of unsolicited meetings with consumers). The exemptions apply in relation to—

  • offers to wholesale investors (for example, investment businesses or large entities):

  • offers to investors who are close business associates of the offeror or are relatives of the offeror:

  • offers through a licensee for a discretionary investment management service:

  • offers under employee share purchase schemes or dividend reinvestment plans:

  • offers to persons who are under the control of wholesale investors or certain other persons who do not require disclosure under that Act:

  • offers through financial advisers (who are required to comply with obligations under the Financial Advisers Act 2008):

  • offers of standard banking products by a registered bank or a subsidiary of a registered bank.

Regulatory impact statement

The Ministry of Business, Innovation, and Employment produced a regulatory impact statement on 4 June 2014 to help inform the decisions taken by the Government relating to the contents of this legislative instrument.

A copy of this regulatory impact statement can be found at—

Issued under the authority of the Legislation Act 2012.

Date of notification in Gazette: 12 June 2014.

These regulations are administered by the Ministry of Business, Innovation, and Employment.