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Financial Markets Conduct Act 2013

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

136: Limits on permitted exemptions and indemnities

You could also call this:

"Rules about when managers can be protected from costs when doing their job"

Illustration for Financial Markets Conduct Act 2013

If you are a manager or supervisor of a registered scheme, you have rights to be indemnified for liabilities or expenses. These rights must be set out in the scheme's governing document. You can only use these rights when you properly perform your duties as outlined in sections like section 143(1) and section 144.

If you are an investment manager, you also have rights to be indemnified for liabilities or expenses. These rights must be set out in the scheme's governing document or in your contract with the manager. You can only use these rights when you properly perform your duty under section 144.

You cannot make any other agreements that give you these rights beyond what is outlined in the scheme's governing document or your contract.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091127.

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

136Limits on permitted exemptions and indemnities

  1. If a manager or supervisor of a registered scheme has any rights to be indemnified for liabilities or expenses incurred in relation to the performance of the manager's issuer obligations or the supervisor's licensee obligations (as defined in section 4 of the Financial Markets Supervisors Act 2011), those rights—

  2. must be set out in the scheme's governing document; and
    1. must be available only in relation to the proper performance of the duties under sections 143(1) and 144 or sections 153(1) and 154.

      1. If an investment manager of a registered scheme has any rights to be indemnified for liabilities or expenses incurred in relation to the performance of the investment manager's contracted functions, those rights—

      2. must be set out—
        1. in the scheme's governing document; or
          1. in the contract between the investment manager and the manager, provided that the scheme's governing document contains a power that permits such an indemnity; and
          2. must be available only in relation to the proper performance of the duty under section 144.

            1. No other agreement has any effect to the extent that it purports to confer a right of a kind referred to in subsection (1) or (2).

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