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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

80: Choices open to offeror

You could also call this:

"What happens if something goes wrong with your financial product application?"

If you apply for financial products and something goes wrong with your application, the person offering the products has some choices. They must do one of the following for you: repay the money you gave them, give you a new document that fixes the problem and ask if you still want the products, fix the problem with your application and tell you about it, or give you a new document and a chance to withdraw your application. You will get a month to decide if you still want the financial products in some cases. The person offering the products must follow the rules when dealing with your application.

If you do not tell the offeror you still want the products within a month, or if you withdraw your application, they must repay your money as soon as possible. If the offeror does not repay your money within a month, they and their directors are responsible for repaying it with interest. When the offeror is dealing with your application, they must follow any rules that apply.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091031.

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79: Application of section 80, or

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

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81: Director not liable if no misconduct or negligence, or

"Directors are not in trouble if things go wrong by accident, not because they did something wrong."

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

80Choices open to offeror

  1. If this section applies, the offeror must do 1 of the following in respect of each applicant:

  2. ensure that the money received from the applicant in respect of the application for financial products is repaid; or
    1. in the case of section 78 or 79(2), (3), or (4), give the applicant—
      1. a supplementary document or replacement PDS that corrects the deficiency or changes the terms of the offer; and
        1. 1 month to confirm whether or not the applicant still wants to acquire the financial products; or
        2. in the case of section 79(5),—
          1. amend the register entry to correct the deficiency; and
            1. give notice in the prescribed manner to the applicant that the register entry has been amended; and
              1. give the applicant 1 month to confirm whether or not the applicant still wants to acquire the financial products; or
              2. if permitted by the regulations, in the case of section 79(4) or (5),—
                1. give the applicant the document or PDS referred to in paragraph (b)(i) or comply with paragraph (c)(i) and (ii) (as the case may be); and
                  1. give the applicant a prescribed period to withdraw their application and be repaid.

                  2. If an applicant does not confirm that the applicant still wants to acquire the financial products within 1 month after being given the opportunity to do so under subsection (1)(b)(ii) or (c)(iii) or an applicant withdraws an application under subsection (1)(d), the offeror must ensure that the money received from the applicant in respect of the application for financial products is repaid as soon as practicable.

                  3. If the money referred to in subsection (2) is not repaid within 1 month after the offeror is required to ensure that it is repaid under that subsection, the offeror and the directors of the offeror are jointly and severally liable to repay the money together with interest at a prescribed rate from the expiry of the 1-month period referred to in subsection (2) or from the date on which the application is withdrawn (as the case may be).

                  4. An offeror must, when acting under this section (including in respect of a withdrawal under subsection (1)(d)), comply with the prescribed requirements (if any).