322No compensation in respect of money instructed to be invested

1. Neither the Lawyers' Fidelity Fund nor the Conveyancing Practitioners' Fidelity Fund is to be applied in paying compensation to any person for any loss relating to money that a practitioner or incorporated firm has been instructed to invest on behalf of that person.

2. Subject to subsection (3), for the purposes of this section, a practitioner or incorporated firm is instructed to invest money where a person—

3. who entrusts money to the practitioner or incorporated firm; or
4. for whom the practitioner or incorporated firm holds money,—
instructs the practitioner or incorporated firm to invest all or some of the money in a specified investment or in an investment of the practitioner's or incorporated firm's choice.

5. A practitioner or incorporated firm is not instructed to invest money only because that practitioner or incorporated firm is instructed by a person—

6. to pay the money into an account with a bank in New Zealand:
7. to apply money on behalf of that person to give effect to a loan agreement where—
   1. that person, being the lender, specifies the borrower to whom the money is to be lent; and
   2. that person, being the lender, has not been introduced to the borrower by the practitioner or incorporated firm for the purpose of making that loan, other than, where that person is a financial institution within the meaning of the Banking (Prudential Supervision) Act 1989, by an application for loan finance; and
   3. the practitioner or incorporated firm has not made or participated in the decision to approve the making of the loan other than by advising in respect of the terms and conditions of the loan agreement:
8. to apply money to give effect to any term of a conveyance to which that person is a party, other than a conveyance that is or gives effect to a loan agreement that does not come within the terms of paragraph (b).

9. If the practitioner is a lawyer, nothing in this section applies to money that the lawyer is authorised to invest in any case where the only authority for investing the money is given or is capable of being given by the lawyer pursuant to a power under—

10. the Protection of Personal and Property Rights Act 1988:
11. a trust arising out of a deceased estate:
12. a trust created by a court order:
13. a trust for the benefit of 1 or more persons suffering from physical or mental disability.

14. In this section, a reference to a practitioner includes a reference to—

15. any agent of the practitioner:
16. any nominee of the practitioner:
17. any company—
    1. of which the practitioner is a director within the meaning of the Companies Act 1993; or
    2. of which the principal financial benefit or effective control is directly or indirectly vested in the practitioner or any spouse or civil union partner or de facto partner or child or children of the practitioner:
18. any other incorporated or unincorporated body (other than a listed issuer)—
    1. in relation to which the practitioner occupies a position comparable to that of a director within the meaning of the Companies Act 1993; or
    2. of which the principal financial benefit or effective control is directly or indirectly vested in the practitioner or any spouse or civil union partner or de facto partner or child or children of the practitioner.

19. In this section,—

    company—

    1. means a company registered under the Companies Act 1993; and
    2. includes a company so registered in which the practitioner holds shares as a bare trustee, notwithstanding that he or she is entitled as a trustee to be remunerated out of the income or property of the trust; but
    3. does not include a company so registered that is a listed issuer

    conveyance means—

    1. a deed or agreement in writing—
       1. for the sale and purchase of, or relating to, any interest in land or buildings, including a company lease within the meaning of section 2(1) of the Resource Management Act 1991:
       2. for the granting, in relation to any land or buildings, of a lease, tenancy, or licence to occupy, or for the sale and purchase or transfer or assignment of any such lease, tenancy, or licence:
       3. for the sale and purchase of a business (including its shares and securities) and for any leases, licences, or rights connected with the business:
       4. for the sale and purchase or lease of chattels, either separately or as part of an agreement to which subparagraph (i) or subparagraph (ii) or subparagraph (iii) applies:
    2. any other assignment or settlement by deed.

    listed issuer has the same meaning as in section 6(1) of the Financial Markets Conduct Act 2013.