Governance

 

Ensuring financial product managers and supervisors have a clear understanding of their respective roles, and holding them to account, is central to building investor trust.

Part 4 of the FMC Act introduces a new governance and accountability framework to achieve this goal. This framework will apply to managed investment scheme (MIS) managers, debt issuers, restricted schemes and their respective supervisors or trustees.

For more details on timings for the FMC Act, see our calendar.

Part 4 of the FMC Act resets the accountability framework for managed investment schemes and debt securities from 1 December 2014.

It imposes statutory duties of care on licensed supervisors and on managers of managed investments schemes. Managers of managed investment schemes must also act in the best interests of investors. These general good conduct duties set the tone for the overall accountability framework and apply in addition to the more specific duties relating to particular circumstances.

Ensuring that managers and supervisors have a clear understanding of their respective roles, and holding them to account, is central to building investor trust.

Detailed transitional provisions for moving across to the new regime are contained in Schedule 4 of the FMC Act.

Key changes include:

  • New requirements and obligations for licensed supervisors and managers of managed investment schemes, as well as issuers of debt securities and trustees of restricted schemes.
  • New requirements for schemes to be registered and new custody obligations for registered schemes.
  • New licence requirements for managers. Read more about the licensing of managers here.
  • New requirements for restricted schemes to have a Licensed Independent Trustee. Read more about the licensing of independent trustees here.
  • New powers of intervention for supervisors and FMA, as well as ongoing register and record-keeping duties for issuers of all regulated products.

If you are intending to launch a new KiwiSaver, superannuation, or workplace savings scheme you will need a certificate from the FMA before applying to register the scheme. See our information sheet on the FMA certification process for registration of new KiwiSaver, superannuation and workplace savings schemes to find out how to get that certificate.

Our governance and accountability information factsheets summarise the key accountabilities and responsibilities under the FMC Act:

Our guidance note, Governance under Part 4 of the FMC Act outlines our expectations for how issuers of debt securities, managers of managed investment schemes and their supervisors should approach their governance responsibilities and accountabilities.

The new FMC Act governance requirements come into effect from 1 December 2014. However, there is a two year transition period for entities to comply with the new regime. See the timeline for change for more details.

As Regulations are developed we will update these pages with more details on any new obligations.

Corporate governance

Good corporate governance and board behaviour supports the principles underpinning the FMC Act.

Information about our expectations for good corporate governance can be found in these publications: