This notice, which comes into force on 16 September 2021 and is revoked on 15 September 2026, provides exemptions relating to the requirement for restricted schemes to have a licensed independent trustee that satisfies paragraph (c) of the definition of independent in section 131(3) of the Financial Markets Conduct Act 2013 (the Act). The exemptions apply only to the extent that paragraph (c) provides that the licensed independent trustee must not be a director of a related body corporate of an employer that provides access to the restricted scheme for its employees or of an administration manager or an investment manager of the restricted scheme. The exemptions are further limited to certain situations involving the use of a sole corporate trustee.

The conditions of the exemptions prevent the licensed independent trustee from being a director of any other related body corporate (other than the sole corporate trustee) and contain a restriction relating to the sole corporate trustee’s constitution.

The Financial Markets Authority (the FMA), after satisfying itself as to the matters set out in section 557 of the Act, considers it appropriate to grant the exemptions because,—

• without the exemptions, restricted schemes may be required to restructure their trustee arrangements or use external administration managers or investment managers even though those changes do not result in any greater degree of independence of the licensed independent trustee. The exemptions therefore promote a purpose of the Act by avoiding unnecessary compliance costs; and

• the substance of the independence requirement is preserved by the exemptions. This is because licensed independent trustees will still be required to be independent of an employer that provides access to the scheme for its employees and the administration manager or investment manager of the scheme (and their related bodies corporate other than the sole corporate trustee). In addition, the other independence requirements of section 131(3) of the Act must still be satisfied. The exemptions therefore promote another purpose of the Act by ensuring that appropriate governance arrangements apply to financial products that allow for effective monitoring and reduce governance risks; and

• the exemptions apply only in limited situations where a licensed independent trustee acts as a director of a restricted scheme’s sole corporate trustee. The exemptions clarify that the licensed independent trustee’s independence under the Act is not compromised merely by its status as a director of that sole corporate trustee regardless of the sole corporate trustee’s corporate relationships. Therefore, the exemptions are not broader than is reasonably necessary to address the matters that gave rise to the exemptions.