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Financial Service Providers (Registration and Dispute Resolution) Act 2008

Dispute resolution - Miscellaneous - Pecuniary and compensatory orders for contravening wholesale certification requirement

79A: Pecuniary order for contravening wholesale certification requirement

You could also call this:

“Money penalty for breaking wholesale certification rules”

If you do not follow the rules for wholesale certification, the High Court can make you pay a penalty to the government. This can happen if the FMA (Financial Markets Authority) asks the court to do so.

The most you might have to pay is $100,000 if you’re a person, or $300,000 if you’re a company or organisation. When deciding how much you should pay, the court will think about:

  • What you did wrong and how bad it was
  • If anyone lost money or couldn’t make a complaint because of what you did
  • Whether you meant to do it, or if it was an accident or mistake
  • If you’ve done something like this before

You can only be made to pay one penalty for each thing you did wrong. The FMA has up to three years after you broke the rules to start this process.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM3080382.

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"Court can order payment for breaking wholesale certification rules"

Part 3 Dispute resolution
Miscellaneous: Pecuniary and compensatory orders for contravening wholesale certification requirement

79APecuniary order for contravening wholesale certification requirement

  1. The High Court may, on application by the FMA, order a person to pay a pecuniary penalty to the Crown if the court is satisfied that the person has, without reasonable excuse, contravened a wholesale certification requirement under section 49B.

  2. The amount of the pecuniary penalty must not, in respect of each act or omission, exceed $100,000 in the case of an individual or $300,000 in the case of an entity.

  3. In setting the amount of the pecuniary penalty, the court must take into account all of the following matters:

  4. the nature and extent of the contravention:
    1. the nature and extent of any loss or damage suffered by a person as a result of the contravention, including the effect on a person of the loss of the opportunity to make a complaint to an approved dispute resolution scheme:
      1. the circumstances in which the contravention took place (including whether the contravention was intentional, inadvertent, or caused by negligence):
        1. whether the person has previously been found by the court in proceedings under this Act to have engaged in similar conduct.

          1. A financial service provider may not be liable to more than 1 pecuniary penalty in respect of the same conduct.

          2. Proceedings under this section may be commenced at any time within 3 years after the contravention occurred.

          Notes
          • Section 79A: inserted, on , by section 36 of the Financial Service Providers (Registration and Dispute Resolution) Amendment Act 2010 (2010 No 41).
          • Section 79A(1): amended, on , by section 45(1) of the Financial Service Providers (Registration and Dispute Resolution) Amendment Act 2014 (2014 No 34).
          • Section 79A(3)(b): amended, on , by section 45(2) of the Financial Service Providers (Registration and Dispute Resolution) Amendment Act 2014 (2014 No 34).