These regulations are the Securities Markets (Investment Advisers and Brokers) Regulations 2007.

These regulations come into force on 29 February 2008.

In these regulations, unless the context otherwise requires,—

In the case of investment advice that is given over the telephone to a member of the public,—

• (a) the investment adviser giving the advice is exempted from the requirement in section 41J(1) of the Act that the requisite disclosure must be made in a disclosure statement; and

• (b) if the investment adviser has previously given the recipient of the advice a disclosure statement that is out of date at the time of the telephone advice, the investment adviser is exempted from disclosing the matters required to be disclosed under section 41M(3).

Each exemption in regulation 4 is subject to the following conditions:

• (a) before giving the telephone advice to the member of the public, the investment adviser verbally discloses to that person the matters that must be disclosed under—

  • (i) sections 41B to 41F of the Act or, if section 41M applies, section 41M(3)(b); and

  • (ii) these regulations; and

• (b) not more than 5 working days after giving the telephone advice to the member of the public, the investment adviser sends to that person a disclosure statement that—

  • (i) complies with section 41J of the Act; and

  • (ii) discloses the matters required to be disclosed under—

    • (A) sections 41B to 41F of the Act or, if section 41M applies, section 41M(3)(b); and

    • (B) these regulations.

A lawyer or chartered accountant who gives investment advice to a member of the public is exempted from the requirement of disclosure in section 41A(1) of the Act if—

• (a) the lawyer or the chartered accountant gives the investment advice in that person's professional capacity; and

• (b) the investment advice is a necessary incident of the professional legal advice that the lawyer gives, or the professional accounting advice that the chartered accountant gives, to that member of the public.

(1) This regulation applies when investment advice is given to a person (A) but—

• (a) the investment advice is not given in relation to a specific investment; and

• (b) the investment adviser giving the advice reasonably believes that the disclosure of information otherwise required under section 41D or 41E or both is not material to A in light of the general nature of the advice.

(2) In any case to which this regulation applies, an investment adviser is exempt from disclosure under section 41D or 41E or both, subject to the conditions in subclause (3).

(3) The exemption in subclause (2) is subject to the conditions that, if the investment adviser subsequently gives specific investment advice to A for which disclosure is required under section 41D or 41E,—

• (a) except in the case of telephone investment advice,—

  • (i) the investment adviser must make the relevant disclosure before giving the investment advice; and

  • (ii) the disclosure must be made in accordance with section 41J; or

• (b) in the case of telephone investment advice, the investment adviser must comply with regulation 5.

(1) In the case of investment advice by an investment adviser in relation to a specific investment, for example, the purchase of specific securities, the investment adviser must also disclose the dollar amount, or a percentage formula, of any fee that will be charged to the member of the public receiving the advice, or any remuneration that the investment adviser will receive, in connection with the advice or a transaction resulting from it.

(2) Except in the case of telephone investment advice, the disclosure must be made in accordance with section 41J.

(3) In the case of telephone investment advice, the investment adviser must comply with regulation 5.

(1) This regulation applies to an investment adviser (A) who is an employee of, or an independent contractor to, another person (B) and gives investment advice in the course of B's business.

(2) A is exempted from the requirement under section 41E(1) to disclose an interest or relationship that B has if—

• (a) B has in place an internal information barrier and other procedures necessary to prevent A from knowing of the interest or relationship; and

• (b) at the time when A gives the investment advice A does not in fact know of the interest or relationship.

A disclosure statement must comply with the following requirements:

• (a) the disclosure document must be prominently identified, with a clear heading that includes the term “disclosure statement”; and

• (b) the disclosure statement must express the required information clearly, concisely, and in a manner likely to bring the information to the attention of a reasonable person; and

• (c) the disclosure statement must contain a specific heading relating to each item of the required information; and

• (d) if the disclosure statement is combined with or contained in any other document provided to the member of the public, it must be placed at the beginning or front of the document or documents.

(1) Subject to subclause (2), a person (A) who, on any occasion, gives investment advice in relation to a term life insurance policy is exempted from compliance with any investment advisers' disclosure obligation that would otherwise arise out of A giving that investment advice.

(2) If A on the same occasion also gives investment advice in relation to a security that is not a term life insurance policy, nothing in subclause (1) exempts A from compliance with any investment advisers' obligation that arises out of A giving investment advice in relation to the security that is not a term life insurance policy.

(1) For the purposes of the definition of security in section 2(1) of the Act, bank term deposit means a fixed term deposit product offered by a registered bank in New Zealand.

(2) In subclause (1), registered bank has the same meaning as in section 2 of the Reserve Bank of New Zealand Act 1989.