Who needs to comply

 

Anyone offering financial products for sale needs to comply with financial markets legislation. The Financial Markets Conduct Act 2013 (FMC Act) defines these people as issuers and other offerors.

Issuers

Issuers are people who are involved in first making a financial product available. For the legal definition see section 11 of the FMC Act. They include:

  • the main debtor in relation to a debt security
  • the entity to which an equity security relates
  • the manager of a managed investment scheme
  • Any party that is in the business of entering into derivatives.

Other offerors

People who are offering a financial product for sale who aren’t the Issuer.

The FMC Act defines 4 types of financial products

Product type Description Link to the legal definition

Debt security

A product where there is a right to be repaid money or paid interest on money.

Section 8 (1)

Equity security

A share in a company, industrial and provident society or building society. 

Section 8 (2)
Managed investment product

An interest in a managed investment scheme that allows investors to participate in, or receive, financial benefits produced principally by the efforts of another person under the scheme. There are two types of managed investment schemes:

Managed fund

Schemes where either the interests are ordinarily continuously offered and redeemed on a basis calculated wholly or mainly on the value of the scheme property, or where at least 80% of the scheme’s assets are in certain specified liquid assets.

Other managed investment schemes

Examples of managed investment schemes that are not managed funds could include forestry partnerships and property syndicates.

Section 9

 


Regulation 5

Derivative

A product where an agreement is reached under which consideration may be required at a future time, and the value of the agreement or consideration is linked to something else, for example an asset, a rate, an index or a commodity. This covers a wide range of products including:

  • Futures contracts and forwards

    Options (except options to acquire an equity security, a debt security, or a managed investment product by way of issue)

  • Swaps

  • Contracts for difference, margin contracts and rolling spot contracts

  • Caps, collars, floors and spreads.

    The definition is also wide enough to catch new derivatives products as they are developed.

Section 8(4)

What it means to make a ‘regulated offer’ under the FMC Act

A regulated offer means an offer of financial products to one or more investors where the offer to at least one of those investors requires disclosure under the provisions of Part 3 of the FMC Act – this usually means providing a product disclosure statement.  For the legal definition see section 41 of the FMC Act .

Our disclosure requirements page summarises the disclosure required for regulated offers.  

If a Schedule 1 exclusion applies to all investors, then it isn’t a regulated offer.

Regulation and registration requirements for marinas

The Financial Markets Conduct Act 2013 (FMC Act) changes the way interests in marinas are regulated. Marinas will generally not be regulated under the FMC Act and will no longer need to register on the Financial Service Providers Register. See our information sheet for more details.

More information

  • See our FAQs page.