1. Compliance
  2. Offer information
  3. Offers under the FMC Act
  4. Who needs to comply

Who needs to comply

 

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

Issuers

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

  • the person (other than the guarantor) liable to pay under a debt security
  • the company to which an equity security relates
  • the manager of a managed investment scheme
  • any party that has entered into derivatives.

Offerors

People who are the issuer for an offer of finanical products for issue or in any other case the person who has the capacity, or agrees to, transfer the financial products. See section 6 of the FMC Act for more information.

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 is a ‘regulated offer’

A regulated offer means an offer of financial products to one or more investors where at least one of those investors requires disclosure, usually a product disclosure statement. 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.

More information

  • See our FAQs page.