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Financial Markets Conduct Act 2013

Disclosure of offers of financial products - Procedure for making regulated offers - Dealing with applications where condition referred to in PDS not met or disclosure defective

79: Application of section 80

You could also call this:

"Following rules for fair treatment of financial product applications when things don't go as planned"

If you are offering financial products, you must deal with applications under section 80 if certain conditions are not met. You have to do this for any applications that have not resulted in the products being issued or transferred. This applies when a Product Disclosure Statement (PDS) says the products will only be issued if a minimum number of applications are received or a minimum amount of money is raised, but this does not happen within four months.

You also have to deal with applications under section 80 if a PDS says the products will be listed on a financial market, but they are not listed within the time specified in the PDS or within three months. If you become aware that a statement in the PDS is false or misleading, or if important information is missing, you must deal with applications under section 80 if this information is important to investors. The same applies if you become aware of a problem with the information in the register entry that is important to investors.

You must follow the rules in section 80 to deal with applications for financial products in these situations. This means you have to take certain steps to handle the applications fairly and transparently. You have to make sure you follow the law when dealing with applications for financial products.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091030.

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Part 3Disclosure of offers of financial products
Procedure for making regulated offers: Dealing with applications where condition referred to in PDS not met or disclosure defective

79Application of section 80

  1. An offeror must, if any of subsections (2) to (5) apply, deal under section 80 with any applications for the financial products offered under the regulated offer that have not resulted in an issue or a transfer of the products.

  2. This subsection applies if—

  3. a PDS states that the financial products will not be issued or transferred unless—
    1. applications for a minimum number of the financial products are received; or
      1. a minimum amount is raised; and
      2. a condition referred to in paragraph (a) is not satisfied within 4 months after the date of the PDS.

        1. This subsection applies if—

        2. a PDS states or implies that the financial products are to be quoted on a financial market (whether in New Zealand or elsewhere); and
          1. the financial products are not admitted to quotation within—
            1. the period specified in, or determined in accordance with, the PDS; or
              1. if there is no such period, 3 months after the date of the PDS.

              2. This subsection applies if—

              3. the offeror becomes aware—
                1. that a statement in the PDS is false or misleading or is likely to mislead; or
                  1. that there is an omission from the PDS of information that is required to be contained in the PDS by this Act or the regulations; or
                    1. of a circumstance that has arisen since the PDS was lodged with the Registrar that would have been required by this Act or the regulations to be disclosed or otherwise contained in the PDS if it had arisen before the PDS was lodged, and the circumstance is not so disclosed or otherwise contained in the PDS; and
                    2. the matter referred to in paragraph (a) is materially adverse from the point of view of an investor.

                      1. This subsection applies if—

                      2. the offeror becomes aware—
                        1. that a statement in the register entry is false or misleading or is likely to mislead; or
                          1. that there is an omission from the register entry of information that is required to be contained in the register entry by this Act or the regulations; or
                            1. of a circumstance that has arisen since the PDS was lodged with the Registrar that would have been required by this Act or the regulations to be disclosed or otherwise contained in the register entry if it had arisen before the PDS was lodged, and the circumstance is not so disclosed or otherwise contained in the register entry; and
                            2. the matter referred to in paragraph (a) is materially adverse from the point of view of an investor.