Consultation on expiring class legislative notices

Throughout 2020 and 2021 we will be consulting on a range of class exemption and other legislative notices that are due to expire before the end of 2022. This page will be updated as new consultations are published, decisions made and notices granted. You can subscribe to our updates to receive email alerts about new consultations.

Update on the review of 16 FMC Act class notices – November 2021

We have now completed our project to review 16 FMC Act class notices expiring in 2021.

Exemptions have now been granted to give effect to decisions made earlier this year to grant continued relief for the following matters:

• Equine bloodstock
• Forestry schemes
• Incidental Offers
• Overseas banks offering simple debt products
• Overseas FMC reporting entities
• Overseas registered banks and licensed insurers
• Property schemes – custody of assets
• Recognised Exchanges
• Securities offered under Securities Act 1978 exemptions recognising overseas regimes
• Small co-operatives (1 year renewal)

You can find these notices on our website and on the Legislation NZ website. These notices will come into force on the expiry of the existing notices.

Additionally, after considering further submissions, we revisited our earlier decision not to provide continued relief for overseas listed issuers in respect of disclosure requirements in Part 3 of the FMC Act, under the Disclosure Using Overseas GAAP notice, and decided to renew it.  The exemption has now been granted and is available on our website and on the Legislation NZ website.

Update on review of class notices expiring in 2022 – November 2021

An exemption has now been granted to continue relief for offers of kauri bonds, under the Wholesale Investor Exclusion - $750,000 Minimum Investment in Kauri Bonds notice.  Exemptions in the 2017 notice for ‘other unsubordinated debt securities’ have not been continued.

After considering submissions, we have decided not to grant continued exemption relief for five years for the following matters:

• Companies being wound up – debt securities allotted under Securities Act 1978 (expires 25 May 2022)
• Unit trusts and group investment funds being wound up – securities allotted under Securities Act 1978 (expires 13 July 2022)
• Superannuation schemes and workplace savings schemes being wound up – securities allotted under Securities Act 1978 (expires 13 July 2022).

We will be in touch with the few entities yet to complete their winding up ahead of the expiry of these notices in 2022.

Our review of the following notices will commence in late 2021 or 2022.  We will invite feedback (publicly or on a targeted basis) once we commence work.  If you are interested in any of these reviews, please let us know at [email protected].

• Multiple participant schemes – participation agreements
• Financial statements for schemes consisting only of separate funds
• Irrigation companies
• Small co-operatives.

Update on the review of 16 FMC Act class notices – August 2021

After considering submissions, we have decided to grant continued exemption relief for five years for the following matters

• Incidental offers
• Recognised exchanges.

Relief will be on substantially the same basis as under the existing notices. For more information on the existing exemptions please see the consultation paper. The existing notices are due to expire in November 2021. We will therefore aim to finalise the new notices to give effect to these decisions before the current exemption notices expire. 

Exemptions have also been granted to give effect to decisions made earlier this year to grant continued relief for the following matters:

• Licensed independent trustees of restricted schemes
• Overseas subsidiary balance date alignment
• Employee share purchase schemes
• Communal facilities in real property developments
• Employee share purchase scheme shares offered under Securities Act

You can find these notices on our website and on the Legislation NZ website. These notices will come into force on the expiry of the existing notices.

Update on the KiwiSaver Confirmation Information methodology notice – August 2021

We have reviewed the methodology notice that prescribes the method KiwiSaver providers must use to calculate the “approximate” dollar amount of the total annual fees charged to each KiwiSaver investor. We have decided in principle to issue an additional methodology for the purposes of disclosing this dollar amount in the annual statement.

We have decided in principle to issue a new notice that will continue the settings in the existing methodology indefinitely. This will allow providers to continue to use either the total annual fund charges (TAFC methodology) or the member’s balance at the date the units of the funds are valued (cents per unit or CPU methodology). However, our preference is for providers to use the CPU methodology. We encourage providers using the TAFC methodology to switch to the CPU methodology at an opportune time.

We intend to consult with all KiwiSaver providers to check whether there are any technical issues with the wording of the current methodology notice before a new notice is put in place.

Update on Review of 16 FMC Act class exemption notices - May 2021   

After considering submissions, we have decided to grant continued exemption relief for five years for the 4 matters listed below.  Relief will be on substantially the same basis as under the existing notices.  For more information on the existing exemptions please see the consultation paper.

1. Overseas FMC reporting entities
2. Overseas registered banks and licensed insurers
3. Securities Offered under Securities Act 1978 Exemptions Recognising Overseas Regimes
4. Overseas Banks offering simple debt products.

These existing notices are due to expire between August and December 2021. We will therefore aim to finalise the new notices to give effect to these decisions before the current exemption notices expire. 

Note: We have decided not to provide continued relief for overseas listed issuers in respect of disclosure requirements in Part 3 of the FMC Act.  There is insufficient evidence that the existing notice, the Financial Markets Conduct (Disclosure Using Overseas GAAP) Exemption Notice 2016, has been relied on. Please note that the existing notice expires on 3 November 2021.

Review of the following notices, that will also expire in 2021 continues, and we aim to announce decisions on these around the middle of this year:

5. Incidental offers
6. Recognised exchanges.

Update on review of class notices expiring in 2022 – May 2021

We are also reviewing (and will be consulting publicly or on a targeted basis) the following class notices that will expire in 2022.  If you are interested in any of these reviews please let us know at [email protected].

1. Wholesale investor notice
2. Kiwisaver Confirmation Information methodology notice
3. Companies being wound up – debt securities allotted under Securities Act 1978
4. Unit trusts and group investment funds being wound up – securities allotted under Securities Act 1978
5. Superannuation schemes and workplace savings schemes being wound up – securities allotted under Securities Act 1978
6. Multiple participant schemes – participation agreements
7. Financial statements for schemes consisting only of separate funds
8. Irrigation companies
9. Small co-operatives.

Update on review of 16 FMC Act class exemption notices 
March 2021

After considering submissions, we have decided to grant continued exemption relief for five years for the 8 matters listed below. We have also decided to continue exemptions for small co-operatives for one year to allow them to be reviewed alongside exemptions for irrigation companies (given similar policy issues are raised). Relief will be on substantially the same basis as under the existing notices. For more information on the existing exemptions please see the consultation paper.

1. Employee share purchase schemes
2. Licensed independent trustees of restricted schemes
3. Overseas subsidiary balance date alignment
4. Communal facilities in real property developments
5. Equine bloodstock
6. Forestry schemes
7. Property schemes – custody of assets
8. Employee share purchase schemes shares offered under Securities Act 1978

Existing notices are due to expire between August and December 2021. We will therefore aim to finalise the new notices to give effect to these decisions before the current exemption notices expire. 

Review of the following notices that will also expire in 2021 continues, and we aim to announce decisions on these around the middle of this year:

9. Disclosure using overseas GAAP
10. Overseas FMC reporting entities
11. Overseas registered banks and licensed insurers
12. Incidental offers
13. Recognised exchanges
14. Securities Offered under Securities Act 1978 Exemptions Recognising Overseas Regimes
15. Overseas Banks offering simple debt products

Review of 16 FMC Act class exemption notices

9 July 2020

We are seeking feedback on our review of 16 class exemption notices that support the regime under the Financial Markets Conduct Act 2013 (FMC Act). These notices (listed above) will expire between August and December 2021.

We would like feedback on these class notices. We invite your comments on the matters discussed in this paper. Please use the feedback form provided. Your feedback will help inform our view of whether to renew these notices and, if so, whether any amendments may be needed.

Proposed extensions for three class exemption notices supporting the Financial Advisers Act regime

9 July 2020

After carefully considering the submissions, the FMA has agreed in principle to approve the extension of the FA Act exemptions for Non-NZX brokers and NZX brokers, subject to certain conditions, from the requirement to hold client money and property separately from firm money.  

FMA has also agreed to approve an extension of the FMC Act exemption relating to offers of financial products made through AFAs who are providing DIMS. The notice exempts the offer from the disclosure requirements in Part 3 of the FMC Act and provides that exempted offers are not considered to be regulated offers.

We are currently drafting the exemption notices that will give effect to these decisions and our intention is to have the notices in place by September 2020.  It is proposed that these exemptions will continue until the new financial advice regime legislative changes in the FSLAA have been brought fully into effect on 15 March 2021. 

We would like to thank everyone for their feedback and engagement.

22 May 2020

Consultation on notices supporting the Financial Advisers Act regime is now closed. Our response on the proposed extensions is pending.

The Government has announced that the start of the new financial advice regime will be delayed as a result of the impact of the COVID-19 outbreak. The start date is now 15 March 2021. As the Financial Advisors Act 2008 will continue until the start date for the new regime, we are proposing to continue the exemptions under the following notices (that are due to expire in November this year) up until the start of the new regime:

Financial Advisers (Non-NZX Brokers – Client Money) Exemption Notice 2017
This notice exempts non-NZX brokers, subject to certain conditions, from the requirement to hold client money and property separately from firm money. This allows firms to hold a buffer of firm money in the client money trust account where it is reasonably necessary to reduce the risk of client money shortfalls. New regulations under the new financial advice regime are expected to allow brokers to hold firm money or property together with client money or property in certain circumstances, such as to reduce the risk of the client account being overdrawn due to delays processing payments. We do not expect continued exemption relief will be required once the new regime commences.

Financial Advisers (NZX Brokers – Client Money and Client Property) Exemption Notice 2015
This notice exempts NZX brokers, subject to certain conditions from the requirement to hold client money and property separately from firm money. The exemption permits the operation of gateway accounts for transacting with particular settlement systems. It also allows NZX participants to keep a limited buffer of firm money in their client account where it is reasonably necessary to reduce the risk of temporary client money shortfalls or facilitate settlements in a prudent or orderly fashion. As noted above, regulations under the new regime are expected to allow brokers to hold firm money or property together with client money or property in certain circumstances. We do not expect continued exemption relief will be required once the new regime commences.

Financial Markets Conduct (Offers of Financial Products Through Authorised Financial Advisers Supplying Personalised DIMS) Exemption Notice 2015
This notice applies to offers of financial products made through authorised financial advisers (AFAs) who are providing personalised discretionary investment management services (DIMS). It exempts the offer from the disclosure requirements in Part 3 of the FMC Act and provides that exempted offers are not considered to be regulated offers. The effect is to put offers made through these AFAs in the same position as offers made through DIMS licensees under Part 6 of the FMC Act, that benefit from a Schedule 1 exclusion. We do not expect continued exemption relief will be required once the new regime commences. AFAs providing personalised DIMS will be deemed to hold a DIMS licence under Part 6 on commencement of that regime (unless they opt out).