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Financial Markets Conduct Act 2013

Governance of financial products - Governance of debt securities - Role of supervisor

111: Functions of supervisor

You could also call this:

"What the supervisor does to help investors"

Illustration for Financial Markets Conduct Act 2013

The supervisor of a debt security is responsible for certain tasks. You can think of the supervisor as someone who looks out for the people who have invested in the debt security. The supervisor acts on behalf of these investors when dealing with the company that issued the debt security, or when looking at the rules of the investment. The supervisor also checks if the company is doing what it is supposed to do, and makes sure the company has enough assets to pay back the investors.

The supervisor has to check if the company is following the rules and if it has enough money or assets to pay back the debt. The supervisor gets its powers from the Financial Markets Supervisors Act 2011, this Act, or the rules of the investment.

The supervisor is not allowed to pass on its tasks to someone else, unless this Act or the Financial Markets Supervisors Act 2011 says it is okay to do so.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091090.

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110A: Application of Trusts Act 2019, or

"Rules from the Trusts Act 2019 that don't apply to trusts for debt securities"

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112: General duties applying in exercise of supervisor's functions, or

"Supervisors of debt securities must act honestly and fairly for the people involved."

Part 4Governance of financial products
Governance of debt securities: Role of supervisor

111Functions of supervisor

  1. The supervisor of a debt security is responsible for the following functions:

  2. acting on behalf of the holders of the debt security in relation to—
    1. the issuer of the debt security; and
      1. any matter connected with the trust deed for the debt security or the terms of the regulated offer; and
        1. any contravention or alleged contravention of the issuer obligations; and
        2. supervising the issuer's performance—
          1. of its issuer obligations; and
            1. in order to ascertain whether the assets of the issuer and of each guarantor that are or may be available, whether by way of security or otherwise, are sufficient or likely to be sufficient to discharge the amounts of the debt securities as they become due; and
            2. performing or exercising any other functions, duties, and powers conferred or imposed on the supervisor by or under this Act, the Financial Markets Supervisors Act 2011, or the governing document.

              1. The supervisor must not delegate any of its functions under subsection (1) (except as expressly permitted by this Act or as permitted by, and then subject to, conditions imposed under the Financial Markets Supervisors Act 2011).