Plain language law

New Zealand law explained for everyone

Financial Markets Conduct Act 2013

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

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

You could also call this:

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

Illustration for Financial Markets Conduct Act 2013

When you are a supervisor of a debt security, you must act honestly and in good faith. You must also act in the best interests of the people who hold the debt security and use reasonable diligence when carrying out your functions.

You have to fix any problems that affect the holders of the debt security, as mentioned in section 111(1)(a)(iii), unless you think it will not have a big negative effect on them.

If the holders of the debt security give you a direction that is not against any law or the trust deed, you must follow it when seeking a remedy to a problem or dealing with any other matter related to your functions, such as those mentioned in section 111(1)(a)(iii).

You are not liable for anything you do or do not do in good faith when following a direction from the holders of the debt security. However, this duty to follow directions is subject to any order made by the court under section 210.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091091.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rulesBusiness > Fair trading
Previous

111: Functions of supervisor, or

"What the supervisor does to help investors"

Next

113: Duty of supervisor to comply with professional standard of care, or

"Supervisors of debt securities must be careful and do their job with skill and diligence."

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

112General duties applying in exercise of supervisor's functions

  1. The supervisor of a debt security must—

  2. act honestly and in good faith in acting as a supervisor; and
    1. in exercising its powers and performing its duties as a supervisor, act in the best interests of the holders of the debt security; and
      1. exercise reasonable diligence in carrying out its functions as a supervisor.

        1. The supervisor of a debt security must also—

        2. do all the things it has the power to do to cause any contravention referred to in section 111(1)(a)(iii) to be remedied (unless it is satisfied that the contravention will not have a material adverse effect on holders of the debt security); and
          1. act in accordance with any direction given by a special resolution of the holders of the debt security that is not inconsistent with any enactment, rule of law, or the trust deed in relation to—
            1. seeking a remedy to a contravention referred to in section 111(1)(a)(iii); and
              1. any other matter connected with the supervisor's functions.

              2. The supervisor is not liable for anything done, or omitted to be done, in good faith in giving effect to a direction to it by holders of the debt security.

              3. The duty in subsection (2)(b) is subject to any order of the court made under section 210.

              Compare
              • SR 2009/230 Schedule 15 cl 1
              Notes
              • Section 112(1)(a): amended, on , by section 167 of the Trusts Act 2019 (2019 No 38).