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Financial Markets Conduct Act 2013

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

137: Governing document must be legally enforceable

You could also call this:

"The rules of a scheme must be written in a way that they can be enforced by law."

Illustration for Financial Markets Conduct Act 2013

When you have a registered scheme, its governing document must be in a form that can be enforced by law. This means the document must be legally binding between the people in charge, like the supervisor and the manager, and the people who participate in the scheme. The governing document can be split across one or more documents, but they all must be legally enforceable.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091128.

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136: Limits on permitted exemptions and indemnities, or

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

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138: Effect of governing document, or

"What happens when the scheme's rules conflict with the law"

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

137Governing document must be legally enforceable

  1. A governing document for a registered scheme must be contained in 1 or more documents that are legally enforceable as between the supervisor, the manager, and the scheme participants.