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Financial Markets Conduct Act 2013

Governance of financial products - Governance of managed investment products - Governing document requirements

135: Contents of governing document for registered scheme

You could also call this:

"What a registered scheme's governing document must include"

Illustration for Financial Markets Conduct Act 2013

When you set up a registered scheme, you need a governing document that covers certain important matters. This document must say whether the products in the scheme can be bought or sold, and how this is done. It must also explain how to calculate the price of these products when they are sold back.

You need to include rules about who can join or leave the scheme, and how much they need to pay to be part of it. The document must also explain how the scheme's assets are valued and how the interests in the scheme are priced. It should cover how benefits are paid to scheme participants and what fees can be paid to the people managing the scheme.

The governing document should also say how the supervisor and manager of the scheme are appointed and removed. It must include details about how the scheme can be wound up and any other important matters that affect the scheme. You can find more information about what needs to be included in the governing document by looking at the KiwiSaver Act 2006 and section 136. The document must follow the frameworks and methodologies set out in notices issued by the FMA under subpart 4 of Part 9.

The governing document is also treated as including any provisions that are implied by the Act or the KiwiSaver Act 2006. This means that even if something is not directly written in the document, it can still be considered part of it if it is required by the law.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091126.

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Part 4Governance of financial products
Governance of managed investment products: Governing document requirements

135Contents of governing document for registered scheme

  1. The governing document for a registered scheme must provide adequately for all of the following matters under the scheme:

  2. whether or not managed investment products are transferable or redeemable and the rules applying to acquiring or disposing of the managed investment products and, if they are redeemable,—
    1. the manner in which, and the conditions on which, interests are to be redeemed; and
      1. the method of calculating the price at which interests are to be redeemed; and
      2. the rules applying to becoming a scheme participant or withdrawing from participation in the scheme (if there are any rules); and
        1. the contributions payable, or the manner of calculating the contributions payable, and the rules applying to changing the contributions payable or the manner of their calculation; and
          1. the methodology, or the rules applying to determining the methodology, and other rules applying to valuations of assets of the scheme and pricing of interests in the scheme; and
            1. the rules applying to the determination and payment of benefits to scheme participants; and
              1. the fees and expenses that can be paid out of scheme property to any manager, investment manager, administration manager, supervisor, or custodian, or the basis on which those fees and expenses are to be determined, and any rights of any of those persons to be indemnified out of scheme property (and any other matters required by section 136); and
                1. the appointment and removal of the supervisor (unless none is required under this Part); and
                  1. the appointment and removal of the manager; and
                    1. the winding up of the scheme; and
                      1. any matters required to be contained in it by the regulations; and
                        1. any other matters (other than the matters contained in the statement of investment policy and objectives) that materially affect—
                          1. the management and operation of the scheme by the manager:
                            1. the rights and duties of scheme participants in the scheme:
                              1. the powers, rights, and duties of the manager and the supervisor of the scheme.

                              2. The governing document is treated as containing any provision that is implied into it by or under this Act or the KiwiSaver Act 2006.

                              3. The governing document must provide for the contents of the document that are required by this section in accordance with the frameworks and methodologies specified in notices issued by the FMA under subpart 4 of Part 9 (if any).

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