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General Equity

PREVIOUSLY NAMED: General Equity Building Society
ADDRESS:  Level 4, General Equity House, 17 Albert Street, Auckland 1010, New Zealand.
REASON FOR WARNING:  Misleading and deceptive statements.
OTHER INFORMATION: We warn any persons to exercise extreme caution before obtaining any financial services or acquiring any financial products from General Equity. In particular, we warn those persons to take into account that:

  • In our view, General Equity has engaged in conduct and has made statements that are misleading and deceptive in connection with its status as a financial markets participant and how it is regulated in New Zealand.
  • General Equity is not a licensed financial markets participant in New Zealand, does not have to meet any prudential requirements (including minimum capital requirements) in New Zealand and is not a New Zealand bank or a non-bank deposit taker.
  • In our view, General Equity has engaged in conduct and has made statements that are misleading and deceptive in connection with The General Equity Asset Builder Fund No 1 (ABF1). In our view, the ABF1 does not hold the assets General Equity claims it holds and was used by General Equity to give a misleading impression of adequate asset backing to support the issuance of letters of credit by General Equity.
  • Most of General Equity’s business is conducted outside of New Zealand. That business is subject to the laws of, and oversight of financial markets regulators, of those places where it conducts that business. We have limited ability at law to take action in connection with financial services provided by New Zealand entities outside of New Zealand.

Warning Disclosure Order under section 49 of the Financial Markets Authority Act 2011

TO: General Equity, Level 4, General Equity House, 17 Albert Street, Auckland 1010, New Zealand.

AND TO: all associated persons of General Equity (including any associated person that may be incorporated or formed after the date of this Order)

We make the following Order under section 49(1) of the Financial Markets Authority Act 2011 against General Equity and associated persons of General Equity:

1. Any website operated by or on behalf of General Equity and each associated person of General Equity must contain, on the main page of the website, a warning statement in the form attached as Annexure A to this Order (Warning Statement). 2. The Warning Statement is required to be displayed:

(a) Prominently; (b) In black font no smaller than the font contained in Annexure A to this Order; and (c) In the same layout as the layout used in Annexure A to this Order.

3. General Equity must provide a copy of this order to each associated person of General Equity. 4. In this Order, pursuant to section 49(7)(d) of the Financial Markets Authority Act 2011, associated person has the same meaning as section 6(1) of the Financial Markets Conduct Act 2013, with the full meaning being set out in section 12 of that Act.

Note that a person who contravenes an Order made by us under Section 49 of the Financial Markets Authority Act 2011 commits an offence and is liable on summary conviction to a fine not exceeding $300,000.

This Order is made subject to any further Orders by us.

COPY OF ORDER: General Equity: Warning Disclosure Order under Section 49 of the Financial Markets Authority Act 2011

REASONS FOR MAKING THE ORDER: Following issue of the warning about General Equity we made an Order under section 49(1) of the Financial Markets Authority Act 2011 against General Equity and associated persons of General Equity, requiring them to prominently disclose a copy of the warning on 1 or more Internet sites maintained by or on behalf of the those persons (a warning disclosure order). We made the warning disclosure order for the following reasons:

  1. It is important that those dealing with General Equity are made aware of our concerns as expressed in the warning.
  2. A disclosure order under section 49 ensures that the warning is disseminated directly by General Equity, which will result in a wider and more targeted and relevant distribution than might otherwise be the case if we relied solely on publishing the warning on the our website.
  3. In particular, individuals and entities from overseas who might be dealing with General Equity are more likely to be made aware of the warning if it is published by General Equity.