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Financial Markets Conduct Act 2013

Disclosure of offers of financial products - Procedure for making regulated offers - Prohibition of offers where defective disclosure in PDS or register entry

82: False or misleading statements, omissions, and new matters requiring disclosure

You could also call this:

"Tell the truth when selling financial products"

When you offer financial products, you must make sure the information is correct. If the information in the product disclosure statement or the register entry is false, misleading, or missing, you cannot offer the product. This includes information that should have been added after the product disclosure statement was lodged.

You also cannot offer the product if something new happens that would have been important for investors to know before they invested. This new information must be added to the product disclosure statement or the register entry. If you make a statement about something that will happen in the future, it must be based on reasonable grounds, or it will be considered misleading.

If you break this rule, you can check out section 510 to see what might happen, and section 496 to understand how people might be affected. You need to be honest and transparent when offering financial products. This helps keep investors safe and informed.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091033.

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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."

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83: Persons who must inform offeror about disclosure deficiencies, or

"People who must tell a company about mistakes in its investment information"

Part 3Disclosure of offers of financial products
Procedure for making regulated offers: Prohibition of offers where defective disclosure in PDS or register entry

82False or misleading statements, omissions, and new matters requiring disclosure

  1. An offeror must not offer, or continue to offer, financial products under a regulated offer if—

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

          1. For the purposes of this section, a statement about a future matter (including the doing of, or refusing to do, an act) must be taken to be misleading if the person making the statement does not have reasonable grounds for making it.

          2. Subsection (2) does not limit the meaning of a reference to a misleading statement.

          3. See section 510 (offence to knowingly or recklessly contravene this section) and section 496 (which provides that a person may be treated as suffering loss or damage in the case of a contravention of this section).