To provide DIMS under the FMC Act you must hold a DIMS market services licence issued under the FMA Act.
For more information on the process involved, please see our licensing page.
DIMS licensees are obliged to:
DIMS licensees need to make sure their retail clients have all the information about investment decisions, how the investments have performed, and what the fees are.
Your ongoing reporting requirements are:
You will also need to provide the following annual reporting to your investors:
|Investor’s portfolio return||
|Portfolio profile||Name each class of the financial products in the investor’s portfolio, the products’ issuers, and the number of products in the portfolio|
|Cash held||Details of the amount of cash held for the investor at the close of disclosure year|
|Dividends paid||Details of dividends paid, all interest paid, and other distribution or income received|
DIMS licensees need to let their retail investors know if they are providing a wholesale service. This is a requirement of reg194.
DIMS licensees must not buy or sell a financial product for a retail investor under a wholesale service unless they have given a prior warning to the retail investors. The retail investors must also acknowledge and authorise the service.
The warning must be prominently displayed on a document telling the investor:
As a DIMS licensee, you are governed by what the investor allows you to do, based on the investment authority - see s437.
The investment authority spells out the nature and type of investments you can make, and the amount in each asset type you can invest in.
You have obligations to do limit break reporting quarterly (reg 231) and annually, and when your limit break is not corrected (reg 230) within five days of the break happening.
Please read the DIMS limit breaks under the FMC Act information sheet
As a DIMS licensee, you have to avoid transactions that lead to related-parties benefit (s440).
There are exceptions if you can certify that:
Under reg236 you must notify us within 10 working days of the end of each quarter, whether any certificates have been given, and if so provide us with copies of those certificates.
As a DIMS licensee, you need to make sure you are able to meet the licence obligations (see s412 for details).
You need to tell us if you:
All notifications should be emailed to the FMA at firstname.lastname@example.org noting the relevant obligation in the subject line of your email.
All DIMS licensees are FMC reporting entities.
FMC reporting entities need to prepare financial statements that comply with generally accepted accounting practice (GAAP), have them audited by a licensed auditor, and lodge them with the registrar.
There are exemptions for two DIMS licensee categories from having to prepare financial statements that meet GAAP, have them audited by a licensed auditor, and lodge them with the registrar.
This table lists current DIMS financial reporting exemptions:
|Exempted from||Must still||May need to|
|Level 1 DIMS Providers managing <$100m of retail funds||
|Level 2 DIMS Providers managing $100m to $250m of retail funds||
As a DIMS licensee, you must be honest in how you conduct and provide your service, always acting in your client’s best interest.
You must not use information gained as a DIMS licensee to benefit yourself or any other person, or cause harm to your client.
You must also exercise care, diligence and the skill of a professional in carrying out your duties.
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