Financial Markets Conduct Regulations 2014

114 Terms implied into trust deed of Schedule 3 schemes

The following provisions are implied into the trust deed of a Schedule 3 scheme:

1 Trustees must keep proper accounting records


The trustees must ensure that there are kept at all times accounting records that—


correctly record the transactions of the scheme; and


will enable the trustees to ensure that the financial statements of the scheme comply with generally accepted accounting practice; and


will enable the financial statements of the scheme to be readily and properly audited (if an audit is required by any enactment).


The trustees must establish and maintain a satisfactory system of control of those accounting records.


In this clause and clause 2, financial statements and generally accepted accounting practice have the same meanings as in the Financial Reporting Act 2013.

2 Financial statements must be prepared

The trustees must ensure that, within 5 months after the balance date of the scheme, financial statements that comply with generally accepted accounting practice are—


completed in relation to the scheme and that balance date; and


dated and signed on behalf of the trustees by 2 trustees or, if the scheme has only 1 trustee, by that trustee.

3 Prohibition on transactions giving related party benefits


The trustees must not, unless permitted under subclause (3), enter into a transaction that provides for a related party benefit to be given.


A related party benefit is a benefit that is given out of, or creates an exposure to loss for, scheme property and that is given to, or received by, the scheme participant or any associated person of the scheme participant (for example, benefits from the personal use of scheme property by the scheme participant or indirect financial advantages derived by the scheme participant).


Subclause (1) does not apply to—


withdrawals permitted by the trust deed; or


a transaction entered into on terms that—


would be reasonable in the circumstances if the parties were connected or related only by the transaction in question, each acting independently, and each acting in its own best interests; or


are less favourable to the scheme participant or associated person than the terms referred to in subparagraph (i).


This clause does not affect the validity of any transaction entered into before the scheme is approved as a Schedule 3 scheme.


In this clause, associated person has the same meaning as in section 12 of the Financial Markets Conduct Act 2013.