Jarden Securities Limited

Jarden Securities Limited was formally censured by the FMA for contraventions by OM Financial Limited (OMF) as a licensed derivatives issuer (DI). OMF co-mingled derivative investor money with its own money, a breach of its DI obligations. OMF amalgamated with Jarden in March 2021, so the amalgamated entity inherited the property, rights and liabilities of OMF and Jarden, including the DI licence. As such, the FMA has censured the amalgamated entity.

Jarden Securities Limited operates as a brokerage firm. The Company offers share broking, portfolio management, investment banking, financial, and economic research services. Jarden Securities serves customers worldwide.

OMF amalgamated with Jarden in March 2021, so the amalgamated entity inherited the property, rights and liabilities of OMF and Jarden, including the DI licence. As such, the FMA has censured the amalgamated entity.

A fundamental obligation for DI licensees is to hold investor money on trust, separate from the licensees’ own money. This ensures client money is protected from the risk of loss that may occur from co-mingling, such as if the business becomes insolvent.

The FMA was satisfied that OMF breached the Financial Markets Conduct 2013 (the FMC Act) between September 2015 and July 2020, prior to the amalgamation with Jarden. First NZ Capital Securities (now Jarden) acquired OMF in 2019. OMF self-reported the issue to the FMA in September 2020.

The contraventions related to OMF transferring its own money into the trust account designated to hold derivative investor money. This involved at least 150 payments totalling $US1million. Derivatives issuers may deposit money into the trust account to safeguard against the risk of a shortfall. However, the FMA concluded that the money deposited by OMF was made for business-related payments to third party providers, not to safeguard against the risk of a shortfall arising.

October 2021 – FMA formally censured Jarden Securities Limited for contraventions by OM Financial Limited (OMF) as a licensed derivatives issuer (DI). OMF co-mingled derivative investor money with its own money, a breach of its DI obligations.