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Financial Markets Conduct Act 2013

Governance of financial products - Governance of debt securities - Governing document requirements

108: Changes to trust deed

You could also call this:

"How to make changes to the rules of a debt security trust"

Illustration for Financial Markets Conduct Act 2013

If you want to change or replace a trust deed for a debt security, you must do it in one of three ways. You can get the consent of the supervisor of the debt security, follow the rules in section 109, or use a power to amend or replace the trust deed under an enactment, such as section 22(7) or 37(6) of the Financial Markets Supervisors Act 2011.

The supervisor will only agree to the change if the holders of the debt security approve it, or if the supervisor thinks it will not harm them. The supervisor must also check that the new trust deed will comply with sections 104 to 106.

To get the approval of the holders of the debt security, you need a special resolution from them, or from each group of holders who might be affected by the change. There is another rule that applies to this, which is in section 112(2)(b).

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091086.

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109: Power to make FMA-approved changes to trust deeds, or

"Changing trust deeds with the Financial Markets Authority's approval"

Part 4Governance of financial products
Governance of debt securities: Governing document requirements

108Changes to trust deed

  1. An amendment to or a replacement of a trust deed for a debt security has no effect unless made—

  2. with the consent of the supervisor of the debt security under this section; or
    1. under section 109; or
      1. under section 22(7) or 37(6) of the Financial Markets Supervisors Act 2011 or any other power to amend or replace the trust deed under an enactment.

        1. The supervisor must not consent to an amendment to, or a replacement of, the trust deed under this section unless—

        2. either—
          1. the amendment or replacement is approved by, or is contingent on approval by, the holders of the debt security; or
            1. the supervisor is satisfied that the amendment or replacement does not have a material adverse effect on the holders of the debt security; and
            2. the supervisor certifies to that effect and certifies, or obtains a certificate from a lawyer, that the trust deed, as amended or replaced, will comply with sections 104 to 106 on the basis set out in the certificate.

              1. The approval of the holders of the debt security for the purposes of subsection (2)(a) must be the approval of a special resolution of—

              2. the holders of the debt security; or
                1. each class of holders of the debt security that is or may be adversely affected by the amendment or replacement.

                  1. Subsection (2) is subject to section 112(2)(b).