Securities Amendment Act 2011

1: Title
This Act is the Securities Amendment Act 2011.
2: Commencement
1: This Act (apart from sections 5(3) 16(3) 22 40 43(2) 49(3) to (6)
2: Sections 5(3) 16(3) 22 40 43(2) 49(3) to (6)
3: To the extent that the provisions referred to in subsection (2) are not previously brought into force under that subsection, those provisions come into force on 1 July 2013.
3: Principal Act amended
This Act Securities Act 1978 2011-05-01 Securities Act 1978
4: Long Title amended
The Long Title is amended by omitting to establish a Securities Commission; and
5: Interpretation
1: Section 2(1) Commission overseas regulator registered prospectus Registrar Takeovers Panel
2: Section 2(1) FMA Part 2 Financial Markets Authority Act 2011 registered prospectus
a: except if paragraph (b)
i: a prospectus that has been registered under section 42 section 43G(2)(b)
ii: a document that, except in the matters specified in section 41(1)
b: if an instrument that amends a prospectus of the kind specified in paragraph (a)(i) section 43 section 43G(2)(b)
i: that prospectus as so amended; or
ii: a document that, except for the matters specified in section 41(1) Registrar .
3: 2013-07-01 Securities Act 1978 see section 2(2); section 5(3) to come into force by OIC, but if not, then come into force on 1 July 2013 (see section 2(3)) Section 5(3) repealed 14 September 2013 section 4(2) Financial Markets (Repeals and Amendments) Act 2013
6: Meaning of advertisement
Section 2A(2)
c: documents, information, and other matters required to be made publicly available under section 54C
7: Exemptions from this Act
1: Section 5
2: An exemption under subsection (1) does not apply—
a: in the circumstances prescribed by regulations made under section 70AAA
b: if any additional requirements prescribed by regulations made under section 70AAA
2: Section 5(2C) 44 43B
3: Section 5(2D) 38F 38E and 43F
4: Section 5(3) 69 65F
5: Section 5(4) 38F 38E
6: Section 5(5) to (6)
8: Exemption for employer superannuation schemes
Section 5A 44 43B
9: Previously allotted securities
Section 6(1) 44 43B
10: Term implied in certain offers of previously allotted securities
Section 6A(1)(a) 44 43B
11: Part 1 repealed
Part 1
12: Restrictions on offer of securities to the public
1: Section 33(2)
ab: the trust deed complies with this Act and the regulations; and .
2: Section 33(3)
ab: the deed of participation complies with this Act and the regulations; and .
13: Restrictions on distribution of prospectuses
Section 34(1)(a) memorandum an instrument
14: Void irregular allotments
Section 37
1B: No allotment of a security offered to the public for subscription may be made in contravention of section 43D(1), 43I(4), or 43K(5)(b)
15: Court must make relief order in certain circumstances
Section 37AC(1)(e)
i: the contravention of section 37 was caused by a failure to comply with a condition of an exemption granted under section 5(5) (as in force before its repeal) or under section 70B .
16: Consent for purposes of section 37AC(1)(c) or (d)
1: Section 37AD(1)(b)(iii) granted under section 5(5) or provided under section 5(3A) or 5A of a kind referred to in section 37AC(1)(e)(i)
2: Section 37AD(1)(b)(iv) section 5 this Act
3:
4: Section 37AD(2) section 5 or section 5A this Act 2013-07-01 Securities Act 1978 see section 2(2); section 16(3) to come into force by OIC, but if not, then come into force on 1 July 2013 (see section 2(3)) Section 16(3) repealed 14 September 2013 section 4(2) Financial Markets (Repeals and Amendments) Act 2013
17: Voidable irregular allotments
Section 37A(1)(ab)(i)
B: every instrument that amends that prospectus that is registered under section 43 .
18: Prohibition of advertisements
Section 38B
7: The FMA must, after an order has been made under this section, give the issuer or the issuer's representative an opportunity to make written submissions and to be heard on the matter.
19: Section 38F repealed
Section 38F
20: Requirements relating to prospectuses delivered to Registrar for registration
Section 41
2: The prescribed information and documents (if any) must be supplied to the Registrar, when the prospectus is delivered to the Registrar for registration, in the manner specified by the Registrar.
21: New sections 42 to 43M substituted
Sections 42 to 44
42: Registration of prospectus
1: The Registrar must promptly register every prospectus delivered to him or her.
2: However, the Registrar must refuse to register a prospectus if,—
a: in his or her opinion,—
i: it does not comply with section 39(1)(a) or 41(1)(b)
ii: it contains any material matter that is not clearly legible; or
iii: section 41(2)
b: the prescribed amount payable on registration is not paid; or
c: the date of registration would be earlier than the date of the prospectus.
3: The Registrar must, on the registration of a prospectus under this section, give a certificate of the registration (and the certificate is conclusive evidence that the prospectus has been registered under this section).
4: The certificate must specify a registration number for the prospectus.
43: Amendment of registered prospectus
1: A registered prospectus may be amended by an instrument to amend the prospectus that is delivered to the Registrar and registered under this section.
2: The prescribed information and documents (if any) must be supplied to the Registrar, when an instrument to amend the prospectus is delivered to the Registrar for registration, in the manner specified by the Registrar.
3: Every instrument to amend a registered prospectus that is delivered to the Registrar must be—
a: signed by the issuer of the prospectus (if an individual) and every person who is a director of the issuer at the time the instrument is delivered to the Registrar, or by the issuer's or director's agent authorised in writing; and
b: accompanied by a copy of the registered prospectus as amended.
4: The Registrar must promptly register every instrument delivered to him or her in accordance with this section.
5: However, the Registrar must refuse to register an instrument under this section if,—
a: in his or her opinion,—
i: he or she could, under section 42(2)
ii: subsection (2) or (3)
b: the prescribed amount payable on registration is not paid; or
c: the date of the registered prospectus is altered.
6: The Registrar must, on the registration of an instrument of amendment under this section, give a certificate of that registration (and the certificate is conclusive evidence that the instrument has been registered under this section).
43A: Registrar not required to consider certain matters
It is not the function of the Registrar, when acting under section 42 or 43
a: complies with section 39(1)(b) or (c), 40, or 41(1)(a)
b: contains a statement that is false or misleading as to a material particular or omits any material particular.
43B: Publication of registration
1: If a prospectus, or an instrument to amend a prospectus, is registered under section 42 or 43
a: contains a reasonably prominent statement—
i: to the effect that the prospectus or instrument has been registered; and
ii: describing where a copy of the prospectus or instrument can be obtained; or
b: contains a reasonably prominent link to such a statement.
2: The statement or link referred to in subsection (1)
3: If a prospectus, or an instrument to amend a prospectus, is registered under section 42 or 43
4: The Registrar may, in any manner that the Registrar thinks fit, give notice to any person or class of persons or to the public generally of any changes in the information referred to in section 43P FMA's consideration of prospectuses, amendments, trust deeds, and deeds of participation
43C: FMA's consideration of prospectuses, amendments, trust deeds, and deeds of participation
1: The Registrar must, immediately after a prospectus or an instrument to amend a prospectus is registered under this Act, notify the FMA of the registration for the purpose of allowing the FMA an opportunity to consider whether the prospectus, or the prospectus as amended,—
a: complies with this Act and the regulations; or
b: contains any material misdescription or error or any material matter that is not clearly legible; or
c: is false or misleading as to a material particular or omits any material particular (whether or not it was so false or misleading, or the omission was material, at the time the prospectus or instrument was registered).
2: The Registrar must, immediately after a trust deed, a deed of participation, or an instrument to amend a deed of that kind is registered under this Act, notify the FMA of the registration for the purpose of allowing the FMA an opportunity to consider whether the trust deed or deed of participation, or the trust deed or deed of participation as amended,—
a: complies with this Act and the regulations; or
b: contains any material misdescription or error or any material matter that is not clearly legible.
3: The nature and extent of the consideration (if any) that the FMA gives to a prospectus, trust deed, or deed of participation or an instrument to amend a prospectus or deed is at the FMA's discretion.
4: Nothing in this section or any other provision of this Act limits the FMA's power to consider or reconsider at any time whether—
a: a registered prospectus—
i: complies with this Act and the regulations; or
ii: contains any material misdescription or error or any material matter that is not clearly legible; or
iii: is false or misleading as to a material particular or omits any material particular (whether or not it was so false or misleading, or the omission was material, at the time the prospectus or instrument was registered):
b: a trust deed or deed of participation—
i: complies with this Act and the regulations; or
ii: contains any material misdescription or error or any material matter that is not clearly legible.
43D: No allotments may be made and no applications or subscription money may be accepted during consideration period
1: No allotment of securities offered to the public for subscription may be made, and no applications for those securities or subscriptions for those securities may be accepted, during the period—
a: starting on the date that the prospectus relating to the offer of the securities is registered; and
b: ending on the close of—
i: the date that is 5 working days after that date; or
ii: a later date specified by the FMA by notice to the issuer.
2: However,—
a: if the prospectus is a continuous issue prospectus, subsection (1) section 43EA
b: if subsection (1) subsection (1)
i: an offer and allotment of those securities being made in accordance with this Act in reliance upon the other registered prospectus; and
ii: applications for those securities and subscriptions for those securities from being accepted in respect of the offer and allotment referred to in subparagraph (i)
3: In subsection (2) and section 43EA continuous issue prospectus
a: relates to securities that the issuer, in the ordinary course of its business, continuously offers to the public for subscription; and
b: is not the first prospectus to be registered in respect of that class of securities.
4: The later date specified under subsection (1)(b)(ii)
5: If a person contravenes subsection (1) section 37(1B) subsection (1)
43E: FMA may remove restrictions if its consideration is complete or consideration or further consideration is unnecessary
1: This section applies if the FMA is satisfied that—
a: its consideration of a prospectus is complete; or
b: consideration or further consideration of a prospectus is, in the circumstances, unnecessary.
2: The FMA may give notice to the issuer that—
a: the period that applies under section 43D section 43D
b: section 43D(1)
3: Section 43D
4: Nothing in this section limits section 70B section 43D
43EA: FMA may prescribe classes of continuous issue prospectuses to which section 43D(1) applies
1: The FMA may issue a notice that prescribes the class or classes of continuous issue prospectuses to which section 43D(1)
2: The FMA must, before issuing a notice under subsection (1) section 43C(1)
3: A notice issued by the FMA—
a: is a regulation for the purposes of the Regulations (Disallowance) Act 1989 and must be presented to the House of Representatives under section 4 of that Act; and
b: is a regulation for the purposes of the Acts and Regulations Publication Act 1989.
4: The FMA may vary or revoke a notice issued under this section, and subsections (2) and (3) FMA's powers to prohibit distribution of investment statements, prohibit allotments, or cancel registration of prospectuses
43F: Prohibition of distribution of investment statement
1: The FMA may, at any time, make an order prohibiting the distribution of an investment statement if the FMA is of the opinion that the investment statement—
a: is likely to deceive, mislead, or confuse with regard to any particular that is material to the offer of securities to which it relates; or
b: is inconsistent with any registered prospectus referred to in it; or
c: does not comply with this Act or the regulations.
2: If an order is made under subsection (1)
a: no allotment may be made of any securities subscribed for whether before or after the order is made (being securities to which the investment statement relates):
b: all subscriptions received for securities to which the investment statement relates, not being subscriptions for securities that were allotted before the order is made or subscriptions received after the order is revoked, must be immediately repaid to the subscribers.
3: An allotment made in contravention of subsection (2)(a)
43G: FMA may prohibit allotment or cancel registration
1: This section applies if, at any time, the FMA is of the opinion that—
a: a registered prospectus does not comply with this Act or the regulations; or
b: a registered prospectus contains any material misdescription or error or any material matter that is not clearly legible; or
c: a registered prospectus is false or misleading as to a material particular or omits any material particular (whether or not it was so false or misleading, or the omission was material, at the time the prospectus was registered); or
d: section 41 has not been complied with in respect of a registered prospectus; or
e: a trust deed or deed of participation in respect of the securities offered in a registered prospectus—
i: does not comply with this Act or the regulations; or
ii: contains any material misdescription or error or any material matter that is not clearly legible.
2: The FMA may exercise either or both of the following powers in respect of the registered prospectus if it considers that it is desirable in the public interest:
a: make an order prohibiting the allotment of securities under the registered prospectus for a period not exceeding 18 months:
b: cancel the registration of the registered prospectus (with effect from the time that the Registrar is notified of the cancellation).
3: If an order is made under subsection (2)(a)
a: during the period in which the order is in force, no allotment may be made of any securities subscribed for whether before or after the order is made (being securities to which the prospectus relates); and
b: all subscriptions received for securities to which the prospectus relates, not being subscriptions for securities that were allotted before the order is made or subscriptions received after the order ceases to be in force, must be immediately repaid to the subscribers.
4: If the registration of a registered prospectus is cancelled,—
a: no allotment may be made of any securities subscribed for whether before or after the cancellation (being securities to which the prospectus relates); and
b: all subscriptions received for securities to which the prospectus relates, not being subscriptions for securities that were allotted before the cancellation, must be immediately repaid to the subscribers.
5: An allotment made in contravention of subsection (3)(a) or (4)(a)
43H: Repayment of subscriptions
1: If any subscriptions that are required under section 43F or 43G
2: A director of an issuer is not liable to repay any subscriptions and interest on the subscriptions under subsection (1)
3: In this section, relevant date
a: in the case of subscriptions received before the order is made under section 43F or 43G
b: in any other case, the date that the subscriptions are received by or on behalf of the issuer.
43I: Order may be made on terms and conditions and may be varied or revoked
1: The FMA may make an order under section 43F or 43G
2: The FMA may vary an order under section 43F or 43G
3: The FMA may, either of its own volition or on the application of the person concerned, revoke an order under section 43F or 43G
4: No allotment may be made of a security—
a: to which an investment statement relates in contravention of the terms or conditions of an order under section 43F
b: that is offered under a prospectus to which an order under section 43G
5: If a person contravenes subsection (4) section 37(1B)
43J: Notices and submissions concerning exercise of power under section 43F, 43G, or 43I(2) or (3)
1: The FMA may exercise a power under section 43F, 43G, or 43I(2) or (3)
a: the FMA gives the issuer at least 5 working days' written notice of the following matters before the FMA exercises the power:
i: that the FMA may make an order under section 43F or 43G section 43I(2) or (3) section 43G
ii: the reasons why it is considering exercising that power; and
b: the FMA gives the issuer or the issuer's representative an opportunity to make written submissions and to be heard on the matter within that notice period.
2: If the FMA exercises a power under section 43F or 43G
a: it must, immediately after exercising the power, notify the issuer of—
i: the reasons for making the order or for the cancellation; and
ii: the terms and conditions of the order (if any); and
b: it must, immediately after exercising the power, give notice to the Registrar and on its Internet site of—
i: the reasons for making the order or for the cancellation; and
ii: the terms and conditions of the order (if any); and
iii: any other information the FMA thinks relevant in the circumstances; and
c: it may give public notice by any other means of the matters in paragraph (b)
d: it may notify any other person of the matters in paragraph (b)
3: If the FMA varies or revokes an order under section 43I
a: it must, immediately after exercising the power, notify the Registrar and the issuer of—
i: the terms and conditions of the variation or revocation; and
ii: the reasons for the variation or revocation; and
iii: any other information the FMA thinks relevant in the circumstances; and
b: it may give notice on its Internet site or give public notice by any other means of those matters; and
c: it may notify any other person of those matters.
43K: FMA may make interim orders pending exercise of powers
1: The FMA may make an interim order that prohibits the allotment of securities—
a: to which an investment statement relates while the interim order is in force if—
i: the FMA is considering, at any time, whether it may exercise a power under section 43F
ii: the FMA considers that making an interim order is desirable in the public interest:
b: under a registered prospectus while the interim order is in force if—
i: the FMA is considering, at any time, whether it may exercise a power under section 43G
ii: the FMA considers that making an interim order is desirable in the public interest.
2: An interim order under subsection (1)
a: the date that is 15 working days after the day on which it is made; or
b: a later date specified by the FMA by notice to the issuer.
3: For the purposes of subsection (2)(b)
a: the FMA may specify a later date if the FMA is of the opinion that it is not reasonably practicable for it to complete its consideration as referred to in subsection (1)(a)(i) or (b)(i) subsection (2)(a)
b: the later date must be a date that is no more than 30 working days after the day on which the interim order is made.
4: The FMA—
a: may act under subsection (1) or (2)(b)
b: must, after acting under subsection (1) or (2)(b)
5: If an interim order is made in respect of an investment statement or a registered prospectus,—
a: the FMA must immediately after making the order notify the issuer and the Registrar that the order has been made and the reasons for the order; and
b: during the period in which the order is in force, no allotment may be made of any securities subscribed for whether before or after the order is made (being securities to which the investment statement or prospectus relates); and
c: section 37(1B) paragraph (b)
43L: FMA may revoke interim order
1: The FMA may revoke an interim order made under section 43K
2: If an interim order is revoked, the FMA must immediately notify the issuer and the Registrar of the revocation.
43M: Nothing done or omitted to be done by Registrar or FMA guarantees or represents that prospectus complies with Act and regulations
1: Nothing done or omitted to be done under this Act by the Registrar or the FMA guarantees or represents that—
a: a prospectus—
i: complies with this Act and the regulations:
ii: does not contain any material misdescription or error or any material matter that is not clearly legible:
iii: is not false or misleading as to a material particular:
iv: does not omit any material particular; or
b: the FMA has considered a prospectus with a view to determining whether it—
i: complies with this Act and the regulations:
ii: contains any material misdescription or error or any material matter that is not clearly legible:
iii: is false or misleading as to a material particular:
iv: omits any material particular.
2: This section does not limit section 22 Financial Markets Authority Act 2011
22: New heading and sections 43N to 43S inserted
2013-07-01 Securities Act 1978 see section 2(2); section 22 to come into force by OIC, but if not, then comes into force on 1 July 2013 (see section 2(3)) Section 22 repealed 14 September 2013 section 4(2) Financial Markets (Repeals and Amendments) Act 2013
23: Notices and submissions concerning delayed allotment orders
Section 44AB
1: The FMA may make a delayed allotment order only if—
a: the FMA gives the issuer at least 3 working days' written notice of the following matters before the FMA makes the delayed allotment order:
i: that the FMA is considering making a delayed allotment order; and
ii: the paragraph of section 44A(1) that is alleged to apply to the issuer; and
iii: the reasons why the FMA is considering making a delayed allotment order; and
b: the FMA gives the issuer or the issuer's representative an opportunity to make written submissions and to be heard on the matter within that notice period.
24: Limited notice and submissions for urgent delayed allotment orders
Section 44AC
a: it may give less than 3 working days' notice before it makes the order, and the notice and the submissions may be oral rather than written; but .
25: Notices and submissions concerning prohibition orders
Section 44AF
1: The FMA may make a prohibition order only if—
a: the FMA gives the person concerned ( person A
i: that the FMA is considering making a prohibition order; and
ii: the nature of person A's failure to comply with his, her, or its disclosure obligations; and
iii: the reasons why the FMA is considering making the prohibition order; and
b: the FMA gives person A or person A's representative an opportunity to make written submissions and to be heard on the matter within that notice period.
26: Commission's powers in respect of contributory mortgages
Section 44B
2: The FMA may, either on the receipt of that report or for any other reason, if it is satisfied that a contributory mortgage broker is contravening, or has contravened, any of the provisions of this Act or the regulations, and that it is desirable in the public interest to do so, exercise any 1 or more of the following powers:
a: make an order prohibiting the contributory mortgage broker from offering interests in contributory mortgages to the public for subscription for a period not exceeding 10 working days; or
b: make an order prohibiting the contributory mortgage broker from offering interests in contributory mortgages to the public for subscription for the period that the FMA thinks fit; or
c: make an order that the contributory mortgage broker must promptly cease to act as contributory mortgage broker in respect of all or any contributory mortgages that have previously been allotted by him, her, or it, and make an order appointing another person to act as contributory mortgage broker in his, her, or its place with respect to those contributory mortgages; or
d: make an order removing any of the directors of any nominee company of the contributory mortgage broker and make an order appointing any person as a director in his or her place.
2A: The FMA—
a: may act under subsection (2)(a)
b: must, after acting under subsection (2)(a)
2B: The FMA may make an order under subsection (2)(b) to (d)
a: the FMA gives the relevant person or persons at least 5 working days' written notice of the following matters before the FMA makes the order:
i: that the FMA is considering making an order under subsection (2)(b), (c), or (d)
ii: the reasons why it is considering making the order; and
b: the FMA gives the relevant person or persons or a representative of the relevant person or persons an opportunity to make written submissions and to be heard on the matter within that notice period.
2C: In subsection (2B) relevant person or persons
a: in the case of subsection (2)(b) or (c)
b: in the case of subsection (2)(d)
27: Sections 46 to 47A substituted
Sections 46 47
46: Registration of trust deeds and deeds of participation
1: The Registrar must promptly register every copy of a trust deed or deed of participation delivered to him or her for registration under this Act.
2: However, the Registrar must refuse to register a copy of a trust deed or deed of participation if,—
a: in his or her opinion, it contains any material matter that is not clearly legible; or
b: the prescribed amount payable on registration is not paid.
3: The Registrar must, on the registration of a copy of a trust deed or deed of participation under this section, give a certificate of that registration (and the certificate is conclusive evidence that the deed has been registered under this section).
47: Amendment of registered deed
1: If a trust deed or deed of participation that has been registered under this Act has been lawfully amended, the issuer must ensure that there is delivered to the Registrar, as soon as practicable after the amendment, a copy of the instrument by which the amendment to the deed was made.
2: The Registrar must promptly register every copy of an instrument amending a deed that—
a: is delivered to him or her for registration under this section; and
b: if the Registrar so requires, is accompanied by a copy of the deed as amended.
3: However, the Registrar must refuse to register a copy of an instrument amending a deed if,—
a: in his or her opinion, the deed as amended contains any material matter that is not clearly legible; or
b: the prescribed amount payable on registration is not paid.
4: The Registrar must, on the registration of a copy of an instrument of amendment under this section, give a certificate of that registration (and the certificate is conclusive evidence that the instrument has been registered under this section).
47A: Registrar not required to consider certain matters
It is not the function of the Registrar, when acting under section 46 or 47
a: complies with this Act or the regulations; or
b: contains any misdescription or error.
28: New sections 54C to 54F inserted
The following sections are inserted after section 54B
54C: Documents, information, and other matters to be made publicly available
1: Every issuer of securities offered to the public for subscription must, at the prescribed times or on the occurrence of the prescribed events and otherwise in the prescribed manner, make publicly available the documents, information, and other matters that are required to be made publicly available by the regulations.
2: The documents, information, and other matters must, if required by the regulations, be presented, calculated, or prepared in accordance with the frameworks or methodologies specified in a notice issued by the FMA under section 54D
54D: FMA may specify frameworks or methodologies
1: The FMA may issue a notice that specifies frameworks or methodologies relating to the manner in which documents, information, or other matters that are to be made publicly available under section 54C
2: A notice issued by the FMA—
a: may specify different matters and requirements in respect of different kinds of securities or different classes of issuers:
b: must not specify matters and requirements that are inconsistent with regulations made under section 70(1)(cb)
3: A notice issued by the FMA—
a: is a regulation for the purposes of the Regulations (Disallowance) Act 1989 and must be presented to the House of Representatives under section 4 of that Act; but
b: is not a regulation for the purposes of the Acts and Regulations Publication Act 1989.
4: A notice issued by the FMA must, as soon as practicable after it is issued, be—
a: published on an Internet site maintained by or on behalf of the FMA; and
b: notified in the Gazette
c: made available in printed form for purchase on request by members of the public.
5: A notification in the Gazette subsection (4)(b)
54E: Consultation
1: The FMA must not issue a notice under section 54D
2: A failure to comply with subsection (1)
54F: FMA may vary or revoke notice
1: The FMA may vary or revoke a notice issued under section 54D
2: Sections 54D(2) to (5) and 54E
29: Which persons are liable for misstatements
Section 56(3)
a: the advertisement was distributed or the prospectus was registered, as the case may be, without his or her knowledge or consent, and on becoming aware of its distribution or registration he or she promptly gave notice to the trustee, statutory supervisor, unit trustee, or superannuation trustee (if any) and the FMA that it was distributed or registered without his or her knowledge or consent; or
b: after the distribution of the advertisement or the registration of the prospectus, as the case may be, and before the securities were subscribed for, he or she, on becoming aware of any untrue statement in the advertisement or the prospectus, withdrew his or her consent to the distribution or the registration and promptly gave notice to the trustee, statutory supervisor, unit trustee, or superannuation trustee (if any) and the FMA of the withdrawal and of the reason for the withdrawal; or .
30: Which experts are liable for misstatements
Section 57(2)
b: after distribution of the advertisement or registered prospectus and before the securities were subscribed for, he or she, on becoming aware of the untrue statement or omission, withdrew his or her consent in writing and gave notice to the trustee, statutory supervisor, unit trustee, or superannuation trustee (if any) and the FMA of the withdrawal and of the reason for the withdrawal; or .
31: Time limit for applying for civil remedies
1: Section 57E(1) 2 years 3 years
2: Nothing in subsection (1)
a: enables an application for a pecuniary penalty order to be made that was barred before the commencement of this section; or
b: affects any proceedings commenced before the commencement of this section.
32: Criminal liability for misstatement in advertisement or registered prospectus
Section 58(3) 41(b) 41(1)(b)
33: Section 59A substituted
Section 59A
59A: Criminal liability for delivering prospectus or amendment for registration that does not comply with various requirements
1: The issuer of securities to which a prospectus relates commits an offence if, when the prospectus is delivered to the Registrar for registration under this Act,—
a: any of sections 39(1), 40, or 41(1)
b: the issuer knows, or ought reasonably to know, that any of sections 39(1), 40, or 41(1)
2: The issuer of securities to which a registered prospectus relates commits an offence if—
a: an instrument to amend the prospectus is delivered to the Registrar for registration under this Act that would result, if the amendment were made, in the prospectus failing to comply with section 39(1) or 40; and
b: when the instrument is delivered for registration under this Act, the issuer knows, or ought reasonably to know, that if the amendment in the instrument were made it would result in the prospectus failing to comply with section 39(1) or 40.
3: An issuer that commits an offence under subsection (1) or (2)
4: This section applies in respect of prospectuses and instruments of amendment delivered to the Registrar for registration under this Act on or after the commencement of this section.
34: Other offences
1: Section 60(1)(c)
2: Section 60(1)(d) 43B(1), 35,
3: Section 60(2)
a: inserting 43D(1), 37(4),
b: omitting 54A, and 54B and 54A to 54C
35: When Court may make management banning orders
1: Section 60A(1)(a) any of sections 58, 59, or 59A section 58 or 59
2: Section 60A(1)
ab: A has been convicted of an offence against section 51 or 61 Financial Markets Authority Act 2011 .
36: Persons automatically banned from management
1: Section 60E
1: This section applies to a person if—
a: the person has been convicted of an offence against section 58 of this Act or section 51 or 61 Financial Markets Authority Act 2011
b: a pecuniary penalty order has been made against the person under this Act.
2: Section 60E
2A: The Court may give leave for the purposes of subsection (2)—
a: at the time of conviction or making of the order, or at any other time on the application of the relevant person:
b: in respect of a particular incorporated or unincorporated body, a class of incorporated or unincorporated bodies, or incorporated or unincorporated bodies generally.
37: When Court may prohibit payment or transfer of money, securities, or other property
1: Section 60G
1: This section applies if—
a: an investigation is being carried out under the Financial Markets Authority Act 2011 in relation to an act or omission by a person that—
i: constitutes or may constitute a contravention of this Act; or
ii: constitutes or may constitute a contravention of any other financial markets legislation in connection with an offer of securities to the public or securities offered to the public; or
iii: may result in a prosecution or civil proceedings of the kind referred to in any of paragraphs (b) to (d) being begun against the person; or
b: a prosecution has begun against a person for a contravention of—
i: this Act; or
ii: any other financial markets legislation in connection with an offer of securities to the public or securities offered to the public; or
c: civil proceedings have begun against a person under, or in respect of,—
i: this Act; or
ii: any other financial markets legislation in connection with an offer of securities to the public or securities offered to the public; or
d: civil proceedings have begun against a person, being proceedings that, in connection with an offer of securities to the public or securities offered to the public, seek damages or other relief for fraud, negligence, default, breach of duty, or other misconduct.
2: Section 60G(3) civil proceedings financial markets legislation Financial Markets Authority Act 2011 .
3: Section 60G(1)
a: a contravention, fraud, negligence, default, breach of duty, or other misconduct regardless of whether it was committed before or after the commencement of this section; and
b: a prosecution or proceeding regardless of whether it begins before or after the commencement of this section.
38: What orders may be made
1: Section 60H(1)
ga: an order—
i: removing a person from being a manager of a scheme to which the investigation, prosecution, or proceedings referred to in section 60G(1) relates; and
ii: appointing another person as the manager of the scheme (with any powers that the court orders): .
2: Section 60H(1)(ga)
a: a contravention, fraud, negligence, default, breach of duty, or other misconduct regardless of whether it was committed before or after the commencement of this section; and
b: a prosecution or proceeding regardless of whether it begins before or after the commencement of this section.
39: New sections 65G and 65H inserted
The following sections are inserted after section 65F
65G: Appeals against decisions of FMA on questions of law only
A person that considers that a decision of the FMA under any of the following provisions is wrong in law may appeal against the decision to the High Court on a question of law only:
a: section 38B (which relates to the prohibition of advertisements):
b: section 43F
c: section 43G
d: section 44A (which relates to delayed allotment orders):
e: section 44AE (which relates to prohibition orders):
f: section 44B (which relates to the FMA's powers in respect of contributory mortgages).
65H: Power of Registrar to delegate
1: The Registrar may delegate to any person, either generally or particularly, any of the Registrar's functions, duties, and powers under this Act except the power of delegation.
2: A delegation—
a: must be in writing; and
b: may be made subject to any restrictions and conditions the Registrar thinks fit; and
c: is revocable at any time, in writing; and
d: does not prevent the performance or exercise of a function, duty, or power by the Registrar.
3: A person to whom any functions, duties, or powers are delegated may perform and exercise them in the same manner and with the same effect as if they had been conferred directly by this Act and not by delegation.
4: A person who appears to act under a delegation is presumed to be acting in accordance with its terms in the absence of evidence to the contrary.
40: Section 66 repealed
2013-07-01 Securities Act 1978 see section 2(2); section 40 to come into force by OIC, but if not, then comes into force on 1 July 2013 (see section 2(3)) Section 40 repealed 14 September 2013 section 4(2) Financial Markets (Repeals and Amendments) Act 2013
41: Part 3 repealed
Part 3
42: Heading to Part 4 amended
The heading to Part 4 and exemptions
43: Regulations and Orders in Council
1: Section 70(1)
cb: prescribing, in respect of securities offered to the public, the documents, information, and other matters that must be made publicly available under section 54C .
2: 2013-07-01 Securities Act 1978 see section 2(2); section 43(2) to come into force by OIC, but if not, then comes into force on 1 July 2013 (see section 2(3)) Section 43(2) repealed 14 September 2013 section 4(2) Financial Markets (Repeals and Amendments) Act 2013
44: New section 70AAA inserted
The following section is inserted after section 70
70AAA: Regulations relating to exemptions under section 5(1)
1: The Governor-General may, by Order in Council, on the recommendation of the Minister in accordance with subsection (2)
a: prescribing circumstances in which any exemption under section 5(1) does not apply:
b: prescribing additional requirements that must be satisfied before any exemption under section 5(1) may apply:
c: prescribing transitional and savings provisions in connection with any regulations made under paragraph (a) or (b)
2: The Minister must, before making a recommendation under subsection (1)
a: consult with the FMA; and
b: be satisfied that the regulations are needed in order to prevent an exemption in section 5(1) from applying in inappropriate circumstances, having regard to whether the exemption may, in relation to securities of a particular kind, cause significant detriment to subscribers for those securities who are members of the public in New Zealand.
45: Fees and charges
1: Section 70A(1)(b) a memorandum of amendments to an instrument that amends
2: Section 70A(1) ; and
c: prescribing the amount to be paid on the registration of any other information or document under this Act and different amounts may be prescribed in respect of different amounts of securities being offered, different kinds of securities, or different classes of issuers or offerees:
d: requiring the Registrar to provide to the FMA a portion of any amounts paid on the registration of a prospectus, trust deed, deed of participation, or an instrument that amends any of those kinds of documents.
3: Section 70A
1A: Regulations made under subsection (1) may prescribe amounts to be paid on the registration of a prospectus, trust deed, deed of participation, or an instrument that amends any of those kinds of documents on the basis that those amounts recover (in whole or in part) the costs of the FMA in performing or exercising functions, powers, or duties under sections 43C to 43L
46: New sections 70B to 70D inserted
The following sections are inserted after section 70A
70B: FMA may grant exemptions
1: The FMA may, on the terms and conditions (if any) that it thinks fit, exempt any person or class of persons or any transaction or class of transactions from compliance with any provision or provisions of—
a: Part 2; or
b: any regulations made under section 70(1).
2: The FMA must not grant an exemption under this section unless it is satisfied that—
a: the exemption would not cause significant detriment to subscribers for the securities to which the exemption relates who are members of the public in New Zealand; and
b: the extent of the exemption is not broader than is reasonably necessary to address the matters that gave rise to the exemption.
3: Nothing in Part 5 limits subsection (1)
70C: Status and publication of exemptions
1: An exemption granted under section 70B
a: is a regulation for the purposes of the Regulations (Disallowance) Act 1989; and
b: must be presented to the House of Representatives under section 4 of that Act.
2: A class exemption (but not any other exemption granted under section 70B
3: An exemption granted under section 70B
a: published on an Internet site maintained by or on behalf of the FMA; and
b: notified in the Gazette
c: made available in printed form for purchase on request by members of the public.
4: A notification in the Gazette subsection (3)(b)
5: The FMA's reasons for granting an exemption under section 70B
6: In this section, class exemption
a: means an exemption granted under section 70B
b: does not include an exemption granted under section 70B
i: a particular person or transaction; or
ii: persons associated with, or transactions involving, a particular entity.
70D: Variation or revocation of exemptions
1: The FMA may vary or revoke an exemption granted under section 70B
2: Sections 70B(2) and 70C
47: Matters that must be stated in regulations implementing application regime
Section 79(1)
d: whether or not, or the extent to which, exemptions from those provisions granted by the FMA under section 70B .
48: Schedule 1 repealed
Schedule 1 Transitional provisions
49: Registration of prospectus continues
1: If a prospectus was registered under the principal Act before the commencement of this subsection (or is registered in accordance with section 53
a: the prospectus must continue to be treated as being a registered prospectus under the principal Act
b: the principal Act section 42
c: every memorandum of amendments to the prospectus registered under the principal Act section 53
2: However,—
a: subsection (1) does not apply if, before the commencement of this subsection, the registration of the prospectus has been cancelled; and
b: sections 43B to 43E
c: sections 43B and 43C
3:
4:
5:
6: 2013-07-01 Securities Act 1978 see section 2(2); section 49(3) to (6) to come into force by OIC, but if not, then comes into force on 1 July 2013 (see section 2(3)) Section 49(3) repealed 14 September 2013 section 4(2) Financial Markets (Repeals and Amendments) Act 2013 Section 49(4) repealed 14 September 2013 section 4(2) Financial Markets (Repeals and Amendments) Act 2013 Section 49(5) repealed 14 September 2013 section 4(2) Financial Markets (Repeals and Amendments) Act 2013 Section 49(6) repealed 14 September 2013 section 4(2) Financial Markets (Repeals and Amendments) Act 2013
50: Regulations for purposes of section 49
1: The Governor-General may, by Order in Council, on the recommendation of the Minister in accordance with subsection (2), make regulations prescribing—
a: information and documents for the purposes of section 49(3)
b: the manner of supplying that information and those documents to the Registrar; and
c: information and documents for the purposes of section 49(4)(b)
2: The Minister must consult with the FMA before making a recommendation under subsection (1).
3: Different matters may be prescribed under subsection (1) in respect of different kinds of securities or different classes of issuers.
51: FMA may perform functions formerly performed by Registrar of Companies in relation to registration of prospectuses
For the purpose of effectively managing the transition relating to the amendments in sections 20 21 Act
52: Registration of deeds continues
If a trust deed or deed of participation was registered under the principal Act section 53
a: the deed must continue to be treated as being a deed that is registered under the principal Act
b: the principal Act section 46
c: every instrument of amendments to the deed registered under the principal Act section 53
53: Prospectuses, amendments, and deeds delivered but not yet registered must be dealt with under old law
1: If, before the commencement of this section,—
a: a prospectus is delivered for registration under the principal Act section 42 section 21
b: a memorandum of amendments is delivered for registration under section 43 section 21
c: a copy of a trust deed or deed of participation is delivered for registration under section 46 section 27
d: an instrument of amendments is delivered for registration under section 47 section 27
2: In subsection (1), Registrar section 2(1) section 5(2)
54: Exemptions continue in force
1: This section applies to every exemption granted under section 5(5)
2: The exemption—
a: continues in force as if it were granted under section 70B
b: may be amended or revoked as if granted under that section.


Securities Markets Amendment Act 2011

1: Title
This Act is the Securities Markets Amendment Act 2011.
2: Commencement
This Act comes into force on 1 May 2011.
3: Principal Act amended
This Act amends the Securities Markets Act 1988 2011-05-01 Securities Markets Act 1988
4: Interpretation
1: Section 2(1) business rules conduct rules listing rules registered exchange
2: Section 2(1) authorised futures market business rules section 36H(1)(b) section 36H(2) change section 36J(2) exchange participant
a: a public issuer:
b: a person authorised by a registered exchange to undertake trading activities on, or otherwise participate in, a registered market issuer listing rules section 36H(1)(a) market rules
a: in relation to a securities market, the business rules and listing rules of a registered exchange for the securities market; and
b: in relation to a futures market, the business rules of a registered exchange for the futures market registered exchange
a: a person that holds a market registration under section 36F
b: a subsidiary of a person to which paragraph (a)
c: a person that is treated as if it were a registered exchange under section 36ZY(4) registered market
a: a securities or futures market that is registered under section 36F
b: a securities or futures market that is treated as if it were a registered market under section 36ZY(4) unsolicited offer section 48DA(1) unsolicited offer obligation section 48DB .
3: The definition of control section 2(1) subpart 1 subpart 1B
4: Paragraph (a) of the definition of dealings in securities section 2(1) the securities of a public issuer securities listed on a registered market
5: Paragraph (a)(i) of the definition of dealings in securities section 2(1) (and, in the case of a futures contract, these steps include acquiring or disposing of as defined in section 37(1) securities
6: Paragraph (b) of the definition of dealings in securities section 2(1) registered exchange registered market
7: The definition of listed section 2(1) the relevant registered exchange's securities market a registered market
8: Paragraph (a) of the definition of public issuer section 2(1) in relation to a registered market (and includes a registered exchange that is listed on its own registered market)
9: The definition of public issuer section 2(1)
b: a person to whom paragraph (a) previously applied, in respect of any action or event or circumstance to which this Act applied at that time .
10: The definition of registered exchange's securities market section 2(1 operated by a registered exchange that is a registered market
11: Paragraph (b) of the definition of security section 2(1) registered exchange's securities market or approved for trading on an authorised futures exchange registered market or approved for trading on an authorised futures market
12: The definition of trading day section 2(1) registered exchange's securities market registered market
13: Section 2
5: For the purposes of this Act and every other enactment, unless the context otherwise requires, a person is a party to a listing agreement with a registered exchange if the person is party to that listing agreement in respect of a registered market of the registered exchange (or, in the case of a registered exchange, if the exchange is listed on its own registered market, whether or not under a listing agreement).
5: What is material information in relation to futures contract
Section 3A authorised futures exchange authorised futures market
6: Situations not giving rise to relevant interests
Section 6(1)(b) registered exchange's securities market registered market
7: Application of subpart 1 to insider conduct in relation to futures contract
Section 11E authorised futures exchange authorised futures market
8: Purpose of this subpart
1: Section 19A(2)
a: promoting fair, orderly, and transparent listed markets:
b: providing an appropriate level of protection for investors: .
2: Section 19A(2)
f: recognising the importance to the New Zealand listed markets of attracting and retaining exchange participants and maintaining international competitiveness: .
9: Public issuers must disclose in accordance with listing rules if continuous disclosure listing rules apply
Section 19B(2) this Act Part 5
10: Registered exchange must publish disclosures
Section 35G(a) and (b) registered exchange's securities market relevant registered market
11: New heading to Part 2B substituted
The heading to Part 2B Registered markets
12: Heading to subpart 1 of Part 2B amended
The heading to subpart 1 , conduct, and control of exchanges of markets
13: No holding out as securities exchange unless registered under this subpart
Section 36A
2: Subsection (1)(a) and (b)(i) do not apply to—
a: a registered exchange; or
b: a subsidiary of a registered exchange.
2A: Subsection (1)(b)(ii) does not apply to—
a: a registered exchange in respect of its registered market; or
b: a subsidiary of a registered exchange in respect of the exchange's registered market.
14: Power to exempt securities markets and futures markets from this Part
1: The heading to section 36E Part 2 and from
2: Section 36E(1) Part 2 and provisions of
3: Section 36E
2A: The Minister must, in considering whether to grant an exemption, have regard to—
a: the nature of the relevant securities or futures market, or class of securities or futures markets; and
b: the likely effect of the proposed exemption on the integrity or effectiveness of securities or futures markets in New Zealand; and
c: the likely effect of the proposed exemption on the confidence of investors in securities or futures markets in New Zealand; and
d: whether there are public benefits from the securities or futures market, or class of securities or futures markets, being operated under the proposed exemption; and
e: any other matters he or she considers relevant.
15: New headings and sections 36F to 36FB substituted
The heading above section 36F How to obtain registration of market
36F: Application for market registration
1: A body corporate may apply for a market registration for—
a: 1 or more securities markets; or
b: 1 or more securities markets and 1 or more futures markets; or
c: 1 or more futures markets, if the body corporate already holds a market registration for a securities market.
2: The applicant for a market registration must deliver to the FMA—
a: an application for registration in the form, and containing the information, required by the FMA, but which must—
i: include a copy of any proposed new market rules, or proposed changes to existing market rules, for the relevant market (the proposed market rules
ii: identify any existing market rules that it proposes to apply to the relevant market; and
b: any fees required to be paid to the FMA by regulations made under section 49D.
3: The FMA must grant the applicant a market registration, by written notice to the applicant, after—
a: receipt of the documents referred to in subsection (2)
b: receipt of any fees, charges, and costs required to be paid to the FMA by regulations made under section 49D; and
c: approval, under sections 36K and 36L subsection (2)(a)(i)
36FA: Notification of market registration
1: A notice of market registration under section 36F(3)
a: must identify the market registered and the person that holds the market registration under that section (the registered exchange
b: must identify the proposed market rules approved for the market (if any), and must identify the existing market rules that apply to the market (if any), but need not incorporate them; and
c: is a regulation for the purposes of the Regulations (Disallowance) Act 1989 (but not for the purposes of the Acts and Regulations Publication Act 1989); and
d: must, as soon as practicable after it is given, be—
i: published on an Internet site maintained by or on behalf of the FMA; and
ii: notified in the Gazette
2: A notice of market registration may relate to more than 1 market. Restrictions on registered exchanges
36FB: No operation by registered exchange of unregistered market
1: No registered exchange may operate in New Zealand a securities or futures market for which it does not hold a market registration under this Part or an authorisation under Part 3 (but see
2: Every person who acts in contravention of subsection (1) see
16: New subpart 1A of Part 2B inserted
Sections 36G to 36R
1A: Market rules
36FC: Purpose and criteria applying under this subpart
1: The purpose of this subpart is to provide for the approval of the market rules, and changes to the market rules, to apply to registered markets under contract between a registered exchange and the exchange participants.
2: The following criteria are relevant to the implementation of that purpose (without limiting other relevant criteria):
a: promoting fair, orderly, and transparent securities and futures markets:
b: providing an appropriate level of protection for investors:
c: recognising the importance to securities and futures markets of attracting and retaining exchange participants and maintaining international competitiveness:
d: encouraging growth and innovation in New Zealand's securities and futures markets:
e: recognising the importance of maintaining international best practices in New Zealand's securities and futures markets:
f: recognising New Zealand's obligations under any international convention, international agreement, or international arrangement to which the Government of New Zealand is a party.
3: The FMA must determine the weight to be given to each criterion in relation to the rules for any particular market, having regard to the nature of that market. Key requirements
36G: Registered markets must be operated under market rules that comply with this subpart
1: A registered exchange must operate each of its registered markets in accordance with market rules for that market that—
a: include the required matters set out in section 36H
b: have effect under section 36I
2: A registered exchange that acts in contravention of subsection (1) see 1988 No 234 s 36G
36H: Required matters for market rules
1: Market rules for a securities market must—
a: include rules ( listing rules
i: relate to the approval of persons for the purpose of enabling securities issued by those persons to be traded on the securities market; and
ii: require those persons to be party to a listing agreement with the registered exchange and relate to the entry into, and revocation of, those listing agreements; and
iii: relate to the governance of those persons; and
iv: relate to the conduct or activities of those persons in relation to that market or to securities traded on that market; and
v: relate to the monitoring and enforcement of those rules; and
b: include rules ( business rules
i: relate to the authorisation of persons to undertake trading activities on, or otherwise participate in, the securities market; and
ii: relate to the conduct or activities of those persons in relation to the securities market; and
iii: govern the conduct of business on the securities market; and
iv: relate to the monitoring and enforcement of those rules.
2: Market rules for a futures market must include rules ( business rules
a: relate to the authorisation of persons to undertake trading activities on, or otherwise participate in, the futures market; and
b: relate to the conduct or activities of those persons in relation to the futures market; and
c: govern the conduct of business on the futures market; and
d: relate to the monitoring and enforcement of those rules. 1988 No 234 s 36H
36I: When market rules have effect
A market rule, or part of a market rule, for a registered market has no effect, either in contract or for the purposes of section 36G section 36L Process for approving proposed market rules and changes to market rules
36IA: Application of process for approving proposed market rules and changes
Sections 36K and 36L section 36F section 36J
36J: Registered exchange must provide proposed changes to FMA
1: A registered exchange must provide any proposed change to its market rules for a registered market to the FMA before making that change.
2: A change 1988 No 234 s 36J
36K: Approval process for proposed market rules and changes
1: The FMA must, within the approval period, by written notice to the applicant for registration or the registered exchange,—
a: approve the proposed market rules or change provided under section 36F section 36J see section 36L
b: extend the approval period; or
c: decline to approve the proposed market rules or change.
2: The approval period is 40 working days, or (if extended under subsection (1)(b)
3: The revision by the applicant or registered exchange of the proposed market rules or change during the approval period in response to comments by the FMA, and the resubmittal of the revised proposed market rules or change, does not result in the commencement of a new approval period under this section.
4: A notice under this section—
a: must identify the market rules, change, or changes to which it relates, but need not incorporate them; and
b: is a regulation for the purposes of the Regulations (Disallowance) Act 1989 (but not for the purposes of the Acts and Regulations Publication Act 1989); and
c: must, as soon as practicable after it is given, be—
i: published on an Internet site maintained by or on behalf of the FMA; and
ii: notified in the Gazette
5: A separate notice under this section of the decision to approve rules is not needed if there is a notice of market registration under section 36FA
6: The FMA's reasons for a decision under subsection (1)(b) or (c)
36L: Approval of proposed market rules and changes
1: The FMA must approve the proposed market rules or a change provided to it under this Part unless the FMA is satisfied that—
a: it is not in the public interest to do so after having had regard to—
i: the consistency of the rules or change with the obligations under section 36Y
ii: the criteria stated in section 36FC
b: (if the rules include listing rules or the change affects listing rules) the listing rules, or the listing rules as changed, for the market will not achieve the purpose of subpart 1 of Part 2, after having regard to—
i: that purpose; and
ii: the criteria stated in section 19A; and
iii: any other matters that the FMA considers relevant.
2: The FMA must, in considering whether to approve proposed market rules provided under section 36F Power to request changes to market rules
36M: Power for FMA to request changes to market rules on certain matters
1: The FMA may, if it considers it necessary or desirable to promote any of the criteria set out in section 36FC section 36Y
2: The FMA may make a request under subsection (1)
a: after carrying out a review under section 36YB(1) or (2)
b: if it believes on reasonable grounds that it is urgent to do so at any other time.
3: The registered exchange must, as soon as practicable but, in any case, before the expiry of 60 working days after receiving the written notice (or any further time allowed by the FMA), do either or both of the following things:
a: provide a proposed change to the FMA under section 36J
b: provide the FMA with a written report that—
i: identifies any requested matter or matters that have not been addressed by a proposed change; and
ii: explains why the registered exchange has not done so; and
iii: suggests alternative ways (if any) by which the matter or matters are being or may be dealt with; and
iv: sets out if, when, and how the registered exchange proposes to provide for the matter or matters (if at all).
4: This section does not allow the FMA to request a draft market rule or change on a matter that is not within the matters set out in section 36H Miscellaneous provisions on market rules
36N: Market rules must be available for public inspection
1: A registered exchange must ensure that a copy of the market rules for each of its registered markets are—
a: available for public inspection, free of charge and during normal office hours, at the head office of that registered exchange; and
b: published on an Internet site maintained by, or on behalf of, the registered exchange at all reasonable times.
2: A registered exchange that fails to comply with subsection (1) see 1988 No 234 s 36Q
36O: Application of Acts relating to regulations to contractual market rules
To avoid doubt, market rules are not regulations for the purposes of the Regulations (Disallowance) Act 1989 and the Acts and Regulations Publication Act 1989 or for any other purpose. 1988 No 234 s 36R
17: Heading above section 36S substituted
The heading above section 36S
1B: Control limits for registered exchanges
.
18: Heading above section 36X and sections 36X to 36Z repealed
The heading above section 36X sections 36X to 36Z
19: New subpart 2 heading substituted in Part 2B
The subpart 2
2: Obligations and oversight in respect of registered markets
.
20: New heading and sections 36Y to 36YF inserted
The following heading and sections are inserted before the heading above section 36ZD General obligations in respect of registered markets
36Y: General obligations in respect of registered markets
A registered exchange must,—
a: to the extent that it is reasonably practicable, do all things necessary to ensure that each of its registered markets is a fair, orderly, and transparent market; and
b: have adequate arrangements for operating its registered markets, including arrangements—
i: for handling conflicts between the commercial interests of the registered exchange and the need for the registered exchange to ensure that the markets operate in the way referred to in paragraph (a)
ii: for monitoring the conduct of exchange participants on or in relation to the markets; and
iii: for enforcing compliance with the relevant market rules; and
iv: that ensure there is a sufficiently independent adjudicative body to adjudicate on contraventions of market rules that are referred to it; and
c: have sufficient resources (including financial, technological, and human resources) to operate its registered markets properly.
36YA: Registered exchange must give annual report to FMA
1: A registered exchange must, within 3 months after the end of its financial year, give a report to the FMA and the Minister on the extent to which it has complied with its obligations under section 36Y
2: The annual report for a financial year must contain, or be accompanied by, the information (if any) in relation to the registered exchange's performance against its obligations under section 36Y
3: The FMA and the registered exchange may, on the terms and conditions that they think fit, agree that the first annual report and the first review under section 36YB
36YB: FMA may carry out general obligations review
1: The FMA may, at any time, carry out a review of how well a registered exchange is meeting any or all of its obligations under section 36Y
2: The FMA must carry out a review of how well a registered exchange is meeting all of its obligations under section 36Y
3: The FMA—
a: may, in carrying out the review, take into account the most recent annual report and other information provided under section 36YA
b: must, after carrying out the review, provide a draft written report on its review to the registered exchange and take into account any submissions made by the exchange within the reasonable period for submissions specified by the FMA.
4: The FMA must not carry out a review of a designated settlement system (within the meaning of section 156M(1) of the Reserve Bank of New Zealand Act 1989) of a registered exchange under this section (but nothing in this subsection prevents a review under that Act being carried on in conjunction with a review under this section).
5: The first review of a financial year under subsection (2) section 36YA
36YC: FMA must make written report on general obligations review
1: The FMA must give a written report on a review under section 36YB
a: as soon as practicable after carrying out the review; and
b: in any case, within 3 months after the exchange has provided an annual report to the FMA under section 36YA
2: The FMA must also publish the written report on the review on an Internet site maintained by or on behalf of the FMA.
3: However, the FMA may, in publishing the written report of its review, omit from the published report any information for which it considers there would be a good reason for withholding under the Official Information Act 1982 if a request for that information were made under that Act.
36YD: FMA may require registered exchange to submit action plan on failure to meet general obligations
1: If the FMA considers that the registered exchange has failed or is failing to meet any 1 or more of its obligations under section 36Y section 36YB(1) or (2)
2: The notice must—
a: set out the details of the failure; and
b: specify the date by which the action plan must be submitted to the FMA.
3: The registered exchange must, as soon as practicable but in any case before the date specified by the FMA, do either or both of the following things:
a: provide an action plan that addresses the failure and specifies—
i: the actions that the registered exchange proposes to take to remedy the failure or avoid any further failure; and
ii: the timetable for taking those actions:
b: provide the FMA with a written report that—
i: identifies any matter that has not been addressed by an action plan; and
ii: explains why the registered exchange does not consider that matter to be a failure or gives any other reasons why the registered exchange has not provided an action plan on the matter.
36YE: Approval, amendment, or rejection of action plan
1: If a registered exchange submits an action plan, the FMA may—
a: approve the action plan; or
b: require the registered exchange to amend the action plan and resubmit it to the FMA by a specified date for approval or rejection; or
c: reject the action plan.
2: If the FMA requires the registered exchange to amend an action plan provided to the FMA, the registered exchange must do either or both of the following things:
a: provide an amended action plan that addresses the matter required to be amended:
b: provide the FMA with a written report that—
i: identifies any matter that has not been addressed by an amendment to the action plan first provided; and
ii: explains why the registered exchange does not consider that the matter needs amending or gives any other reasons why the registered exchange has not provided an amendment addressing the matter.
3: If the FMA approves the action plan (whether as first provided or after amendment), the registered exchange must comply with the action plan.
4: An action plan that has been approved by the FMA may be varied at any time by agreement between the registered exchange and the FMA.
36YF: Minister may give general obligation direction to registered exchange
1: The Minister may, on the recommendation of the FMA, give a written direction to a registered exchange if—
a: the Minister considers that the registered exchange has failed or is failing to meet any 1 or more of its obligations under section 36Y
b: any of the following has occurred:
i: the registered exchange has not provided an action plan when required under section 36YD
ii: the registered exchange has not provided an amended action plan when required under section 36YE
iii: the FMA has rejected a registered exchange's action plan; or
iv: the registered exchange has not complied with an approved action plan.
2: The direction may specify—
a: the actions that the registered exchange must take to remedy any failure or avoid any further failure to meet any 1 or more of its obligations under section 36Y
b: the timetable for taking those actions.
3: The registered exchange must comply with the direction.
21: Registered exchange must notify Commission of disciplinary actions and suspected contraventions
1: Section 36ZD conduct rules market rules
2: Section 36ZD
2: The FMA must notify the registered exchange of its decision to take, or not to take, any action in relation to a notification under subsection (1)(b)(ii).
22: New heading and section 36ZFA inserted
The following heading and section are inserted after section 36ZF Real-time surveillance information
36ZFA: Registered exchange must ensure FMA has access to real-time trading and other information
1: A registered exchange must, if requested by the FMA, give to the FMA the information that is necessary to enable the FMA to carry out real-time surveillance of the operation of the exchange's registered markets.
2: The FMA must pay all reasonable costs of the registered exchange in providing the information under this section.
23: Registered exchange must give Commission material information given to market participants
Section 36ZG a securities market or futures market operated by the exchange a registered market
24: Registered exchange must give notice and have regard to submissions on continuous disclosure determinations
Section 36ZM(1)(a) for any of its registered markets listing rules
25: Commission may give directions to registered exchanges
1: Section 36ZO(1) to a registered exchange in relation to any of its registered markets subsection (2)
2: Section 36ZO(2)(a)(ii) futures market operated by the registered exchange registered market
3: Section 36ZO(3) conduct rules market rules
26: Grounds for other directions
Section 36ZQ(a)(ii) futures market operated by the registered exchange registered market
27: Offence
Section 36ZX
1: A registered exchange commits an offence if it intentionally or recklessly—
a: fails to give a notice, provide information, give assistance, or provide access as required under this subpart; or
b: contravenes section 36ZM; or
c: fails to comply with a direction under section 36YF
28: New subpart 3 of Part 2B inserted
The following subpart is inserted after subpart 2
3: Overseas exchanges
36ZY: Overseas exchanges
1: The FMA may (on the terms and conditions it thinks fit), by notice in the Gazette
a: 1 or more securities markets; or
b: 1 or more securities markets and 1 or more futures markets; or
c: 1 or more futures markets, if the body corporate already holds a market registration for a securities market.
2: The notice must—
a: identify the market registered and the person that is authorised to hold the market registration under this section; and
b: state the terms and conditions that apply to the person under the authorisation (and may, in those terms (without limitation), add to, modify, or disapply any of the provisions of subparts 1A and 2
3: The FMA must not grant the authorisation unless it is satisfied that—
a: the body corporate is authorised to operate the relevant market in another jurisdiction; and
b: the operation of the market by the body corporate will be subject to requirements and supervision under the proposed terms or conditions of the authorisation or the law and regulatory requirements of its home jurisdiction, or both; and
c: those requirements and that supervision are likely to have at least equivalent outcomes, in terms of the degree of integrity and effectiveness of the market and the confidence of investors in the market, to the likely outcomes for that market if the market were registered under section 36F
4: This Act (other than subpart 1B section 36F subsection (2) 1988 No 234 s 36X
36ZYA: Revocation or amendment of authorisation
1: The FMA may, by notice in the Gazette section 36ZY
2: However, the FMA must not do so unless—
a: it has consulted the body corporate concerned; and
b: it is satisfied that it is in the public interest to do so.
36ZYB: Offence for breach of terms or conditions of authorisation
Every person who acts in contravention of a term or condition of an authorisation granted under section 36ZY see 1988 No 234 s 36Z
29: Interpretation of terms used in this Part
1: Paragraph (a) of the definition of authorised futures contract section 37(1) authorised futures exchange authorised futures market
2: Section 37(1) authorised futures exchange authorised futures exchange
a: a person that is authorised to conduct a futures market under subsection (8):
b: a registered exchange that holds a market registration under Part 2B in respect of its futures market:
c: a subsidiary of a person to which paragraph (a) or (b) authorised futures market .
3: Section 37(8) that conducts, or proposes to conduct, a market or exchange in New Zealand for trading in futures contracts to be an authorised futures exchange for the purposes of this Part of this Act to be authorised to conduct 1 or more futures markets in New Zealand
4: Section 37
8AA: A notice of an authorisation declaration under subsection (8) must—
a: identify the market to which the authorisation applies and the person that is authorised to conduct that market under this section; and
b: state the terms and conditions that apply to the person under the authorisation (and may, in those terms (without limitation), add to, modify, or disapply any of the provisions of subparts 1A and 2
8AB: The FMA must not grant the authorisation declaration under subsection (8) unless it is satisfied that—
a: the operation of the futures market by the body corporate will be subject to requirements and supervision under the proposed terms and conditions of the authorisation or the law and regulatory requirements of another jurisdiction (if the body corporate is authorised to conduct the market in another jurisdiction), or both; and
b: those requirements and that supervision are likely to have at least equivalent outcomes, in terms of the degree of integrity and effectiveness of the market and the confidence of investors in the market, to the likely outcomes for that market if it were registered under section 36F
30: No holding out as futures exchange unless authorised under this Part
1: Section 37A(1)(b)(ii) or exchange
2: Section 37A
2: Subsection (1)(a) and (b)(i) do not apply to—
a: an authorised futures exchange; or
b: a subsidiary of an authorised futures exchange.
2A: Subsection (1)(b)(ii) does not apply to—
a: an authorised futures exchange in respect of its authorised futures market; or
b: a subsidiary of an authorised futures exchange in respect of the exchange's authorised futures market.
31: Power to apply and remove restriction on operating futures markets
1: Section 37C(1)(c) or exchange
2: Section 37C(1)(c) or exchanges
32: New section 37E inserted
The following section is inserted after section 37D
37E: No operation by authorised futures exchange of unauthorised futures market
1: No authorised futures exchange may operate in New Zealand a futures market for which it does not have an authorisation under this Part or a market registration under Part 2B.
2: Every person who acts in contravention of subsection (1) see
33: Dealers in futures contracts to be authorised
Section 38(4) within the meaning of paragraph (ab) of the definition of authorised futures exchange in section 37(1) that is a registered exchange (or subsidiary of a registered exchange), means market rules
34: New heading and sections 42EA and 42EB inserted
The following heading and sections are inserted before the heading above section 42F Unsolicited offer orders
42EA: When FMA may make unsolicited offer orders
The FMA may make an unsolicited offer order in accordance with this subpart if the FMA is satisfied that a person has acted, is acting, or intends to act in contravention of an unsolicited offer obligation or exemption.
42EB: Terms of unsolicited offer orders
1: An unsolicited offer order may—
a: restrain a person from acquiring a security, a power to dispose of a security, or an interest in or right attaching to a security, as a result of the unsolicited offer:
b: restrain a person from taking any action that is, or that may reasonably be expected to constitute, a contravention of an unsolicited offer obligation or exemption:
c: restrain a person from taking specified steps to complete or perform a contract that has been, or may reasonably be expected to be, entered into in contravention of an unsolicited offer obligation or exemption:
d: direct a person not to register the transfer of a security:
e: direct a person to disclose information, make corrective statements, or take any other specified steps, at the person's own expense and in the manner and at the times specified in the order, for the purpose of securing compliance with an unsolicited offer obligation or exemption.
2: An unsolicited offer order may be directed at any person.
35: Commission must follow steps before making orders
Section 42F(1)(c)(ii) or an unsolicited offer order disclosure order
36: Commission may shorten steps for specified orders
Section 42G(3)
e: an unsolicited offer order.
37: When Court may grant corrective orders
Section 42N
e: an unsolicited offer obligation or exemption.
38: When Court may make disclosure orders
Section 42P
d: an unsolicited offer obligation or exemption.
39: What are civil remedy provisions
Section 42S
g: an unsolicited offer obligation or exemption.
40: Maximum amount of pecuniary penalty
Section 42W(1) or market manipulation prohibition , market manipulation prohibition, or unsolicited offer prohibition
41: Guidance for Court on how to determine gains made or losses avoided for purposes of maximum amount
1: Section 42X(1)(a) and (b) in a public issuer
2: Section 42X
3: In the case of a contravention of an unsolicited offer prohibition, subsection (2) does not apply.
42: Penalties for failing to comply with Part 2B
1: Section 43B(2)
c: section 36FB(1)
d: section 36G(1) subpart 1A of Part 2B .
2: Section 43B(2)(e) section 36Z section 36ZYB
3: Section 43B(3) section 36Q(1) (conduct rules must be available for public inspection) section 36N
43: Penalties for failing to comply with Part 3
Section 43C(2)
c: section 37E(1)
44: Persons automatically banned from management
Section 43I
2A: The court may give leave for the purposes of subsection (2)—
a: at the time of conviction or making of the order, or at any other time on the application of the relevant person:
b: in respect of a particular incorporated or unincorporated body, a class of incorporated or unincorporated bodies, or incorporated or unincorporated bodies generally.
45: When Court may prohibit payment or transfer of money, securities, or other property
Section 43P(1)(a) or any regulations made under this Act contravention of this Act
46: New heading and sections 47AA and 47A inserted
The following heading and sections are inserted after section 47
47AA: Protection from liability in connection with unsolicited offer obligations
1: This section applies to any person who—
a: is stated by the regulations made under section 48DB
b: is not in contravention of an unsolicited offer obligation or exemption.
2: A person to whom this section applies is not liable for any act done or omitted to be done by that person in good faith if the act or omission is—
a: required by an unsolicited offer order made by the FMA; or
b: required by an order made by the Court under Part 5 in connection with a contravention of an unsolicited offer obligation or exemption; or
c: stated by the regulations made under section 48DB Appeals
47A: Appeals against decisions of FMA on questions of law only
A person that considers that a decision of the FMA under any of the following provisions is wrong in law may appeal against the decision to the High Court on a question of law only:
a: section 34 (which relates to requirements for persons to disclose relevant interests and powers to get relevant interests):
b: section 36ZO (which relates to directions by the FMA to registered exchanges):
c: subpart 1 of Part 5 (which relates to the FMA's enforcement powers).
47: New sections 48 to 48B substituted
Sections 48 to 48B
48: Exemptions granted by FMA
1: The FMA may, on the terms and conditions (if any) that it thinks fit,—
a: exempt any transaction, class of transactions, person, class of persons, or class of relevant interests, acquisitions, or disposals from compliance with any directors' and officers' disclosure obligation or obligations:
b: exempt any person or class of persons, any transaction or class of transactions, or any class of relevant interests, substantial holdings, or relevant events from compliance with any substantial holding disclosure obligation or obligations:
c: exempt any offer, class of offers, security, class of securities, person, or class of persons from compliance with any unsolicited offer obligation or obligations:
d: exempt any person or class of persons from compliance with any requirement of the Futures Industry (Client Funds) Regulations 1990 or regulations that replace them.
2: The FMA must not grant an exemption under this section unless it is satisfied that—
a: the extent of the exemption is not broader than is reasonably necessary to address the matters that gave rise to the exemption; and
b: in the case of subsection (1)(d)
48A: Status and publication of exemptions
1: An exemption granted under section 48
a: is a regulation for the purposes of the Regulations (Disallowance) Act 1989; and
b: must be presented to the House of Representatives under section 4 of that Act.
2: A class exemption (but not any other exemption granted under section 48
3: An exemption granted under section 48
a: published on an Internet site maintained by or on behalf of the FMA; and
b: notified in the Gazette
c: made available in printed form for purchase on request by members of the public.
4: A notification in the Gazette subsection (3)(b)
5: The FMA's reasons for granting an exemption under section 48
6: In this section, class exemption
a: means an exemption of general application that applies to a class of persons, transactions, offers, securities, relevant interests, substantial holdings, relevant events, acquisitions, or disposals; but
b: does not include an exemption granted in relation to—
i: particular persons, transactions, offers, securities, relevant interests, substantial holdings, relevant events, acquisitions, or disposals; or
ii: persons, transactions, offers, securities, relevant interests, substantial holdings, relevant events, acquisitions, or disposals associated with or involving a particular entity.
48B: Variation or revocation of exemptions
1: The FMA may vary or revoke an exemption granted under section 48
2: Section 48A
48: New sections 48DA to 48DC inserted
The following sections are inserted after the heading above section 48E
48DA: Definitions relating to unsolicited offer regulations and related provisions
1: For the purposes of this Act, an unsolicited offer
a: the offer is to acquire a security, to acquire a power to dispose of a security, or to acquire another interest in or right attaching to a security, made by a person ( A B
b: it is unsolicited by B:
c: it is not made on a registered market:
d: it is within the class or classes of unsolicited offers to which the regulations apply:
e: it is not a takeover offer for securities under the takeovers code or an acquisition or a redemption by a company of its shares under the Companies Act 1993.
2: For the purposes of this section, sections 47AA, 48DB, 48DC
a: associated person section 49(7)(b) Financial Markets Authority Act 2011
b: an offer
c: regulations may define or clarify the meaning of unsolicited
48DB: Regulations concerning unsolicited offer regulations
1: The Governor-General may, on the recommendation of the Minister in accordance with subsection (3) subsection (2)
2: The purposes are—
a: ensuring offerees are fully informed of—
i: the current market price of a listed security or, for a non-listed security, a fair estimate of the value of the security and the basis for making that estimate; and
ii: the material terms of the offer and their effect; and
iii: any warnings issued by the FMA (if ordered by the FMA to be contained in or to accompany offer documents); and
iv: their rights and remedies under the regulations:
b: ensuring that notice of an unsolicited offer to security holders is given to the relevant public issuer or issuer and the FMA:
c: ensuring that no agreement to transfer may bind offerees for a minimum period for the purpose of enabling offerees to consider, and reconsider, any decision to accept an offer:
d: requiring there to be minimum or maximum offer periods or both:
e: setting out any other rules applying to unsolicited offers.
3: In formulating recommendations to make regulations under this section, the Minister must—
a: have regard to the objective of preventing unfair practices in the making of unsolicited offers; and
b: consult with the FMA.
48DC: Specific provisions for regulations concerning unsolicited offers
The regulations made under section 48DB
a: define the class or classes of unsolicited offers and securities to which the regulations apply:
b: prescribe requirements in relation to unsolicited offers and the making of those offers, including requirements as to the form and content of those offers, variations of those offers, the updating and resending of offer documents or other corrective statements, and the implication of terms into the offer or any resulting agreement:
c: prescribe the information, statements, certificates, or other documents that must be supplied to offerees, the relevant public issuer or issuer, and the FMA:
d: provide for any duties or functions of the FMA in connection with the rules applying to unsolicited offers:
e: state which obligations are unsolicited offer obligations for the purposes of this Act:
f: provide for the exercise of a right to withdraw a notification of a decision to accept an unsolicited offer, a right to refuse to complete a transfer, or any other right or remedy of offerees, and any consequences and obligations that apply in those cases:
g: provide for any powers of, and requirements on, public issuers, issuers, or their agents in connection with transfers under an unsolicited offer and provide for protections from liability for those persons, persons administering a register of securities, and other persons for the purposes of section 47AA
h: provide for the regulations to—
i: extend to, or in respect of, any conduct of an associated person of an offeror and any conduct that, in substance or effect, constitutes an unsolicited offer:
ii: prohibit contracting out of the regulations and include any other provision or provisions designed to prevent avoidance of the regulations (for example, prohibiting persons inviting others to make an offer to sell a security in circumstances in which, if the invitation were an offer to acquire the security, it would be an unsolicited offer to which the regulations applied):
i: provide for transitional matters. Transitional provisions
49: Transitional provisions for conduct rules and registered exchanges
1: Any conduct rules that had effect under section 36I
a: continue to have effect under section 36I
b: must be treated as market rules that have been approved under section 36L
2: Any reference in an enactment, proceedings, or other thing (whether express or implied) to conduct rules must be read as a reference to market rules.
3: NZX Limited continues to be a registered exchange under the principal Act (as amended by this Act), holding a market registration for its NZSX, NZDX, and NZAX markets (without the need for any further notice of market registration).
50: Transitional provision for authorised futures exchanges
1: In this section,— existing authorisation section 37(8) transitional period
a: the revocation or variation of the existing authorisation (whether or not following a review under this section):
b: the date of publication of a notice confirming the existing authorisation under subsection (4)
2: During the transitional period for each existing authorisation,—
a: the authorised futures exchange under the existing authorisation continues to be an authorised futures exchange under section 37(8)
b: each futures market operated in New Zealand under the existing authorisation must be treated as being an authorised futures market for the purposes of the principal Act.
3: The FMA must carry out a review of each existing authorisation to—
a: determine the futures market or markets to which the authorisation should apply; and
b: ensure that it is satisfied that—
i: the operation of each of those futures markets by the authorised futures exchange will be subject to requirements and supervision under the existing or proposed terms and conditions of the authorisation or the law and regulatory requirements of another jurisdiction (if the exchange is also authorised to conduct the market in another jurisdiction), or both; and
ii: those requirements and that supervision are likely to have at least equivalent outcomes, in terms of the degree of integrity and effectiveness of the market and the confidence of investors in the market, to the likely outcomes for that market if the market were registered under section 36F
c: review any other matters it thinks fit.
4: The FMA must, after completing each review,—
a: vary, revoke, or revoke and replace the existing authorisation under section 37(10)
b: publish a notice in the Gazette
5: The FMA must use its best endeavours to complete the reviews no later than 9 months after the date on which this section comes into force.
51: Exemptions continue in force
1: This section applies to every exemption granted under section 48 of the principal Act that is in force immediately before the commencement of this section.
2: The exemption—
a: continues in force as if it were granted under section 48
b: may be amended or revoked as if granted under that section.
52: Amendment to Securities Markets Amendment Act 2002
1: This section amends the Securities Markets Amendment Act 2002
2: Section 33(4) and (5) 2011-05-01 Securities Markets Amendment Act 2002