Financial Markets Conduct Act 2013

Disclosure of offers of financial products - Procedure for making regulated offers - Offering financial products in entity that does not exist

88: Offering financial products of entity that does not exist

You could also call this:

"No selling products from a non-existent company if it would be regulated if it existed"

You cannot offer financial products from a company that does not exist if the offer would be regulated if the company did exist. This rule still applies even if someone plans to start the company later. If you break this rule and you know the offer would be regulated, you can get in trouble.

If you get in trouble, you can face serious penalties. As an individual, you could go to prison for up to 3 years, get a fine of up to $200,000, or both. If you are not an individual, you could get a fine of up to $600,000. You will only get in trouble if you knowingly break the rule and the offer would be regulated if the company existed.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091043.


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87: Money for financial products must be held in trust, or

"Your money is safe when you buy financial products because sellers must look after it until you get what you paid for."


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89: Advertising for regulated offers, or

"Rules for advertising financial products in a fair and honest way"

Part 3Disclosure of offers of financial products
Procedure for making regulated offers: Offering financial products in entity that does not exist

88Offering financial products of entity that does not exist

  1. A person must not offer financial products of an entity that has not been formed or does not exist if the offer would be a regulated offer if the entity did exist.

  2. Subsection (1) applies even if it is proposed to form or incorporate the entity.

  3. A person who contravenes this section commits an offence if the person knows that the offer would be a regulated offer if the entity did exist.

  4. A person who commits an offence under this section is liable on conviction,—

  5. in the case of an individual, to imprisonment for a term not exceeding 3 years, a fine not exceeding $200,000, or both; and
    1. in any other case, to a fine not exceeding $600,000.