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Financial Markets Conduct Act 2013

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

139: Changes to governing document

You could also call this:

"How to make changes to an important document that guides a financial scheme"

Illustration for Financial Markets Conduct Act 2013

If you want to change a governing document, you must do it in a certain way. You can make changes under this section if you have the consent of the supervisor or the FMA. You can also make changes under section 140 or 187(3), or under section 22(7) or 37(6) of the Financial Markets Supervisors Act 2011.

The supervisor or the FMA will only agree to changes if the scheme participants approve them, or if they think the changes will not hurt the scheme participants. The supervisor must also make sure the changed document follows the rules in sections 135 to 137.

If you are changing a document that affects people's benefits, you need to get their written consent if the changes are bad for them. In other cases, you need a special resolution from the scheme participants. There are some exceptions to this rule, which are explained in section 153(2)(b).

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091130.

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

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140: Power to make FMA and court-approved changes to governing documents, or

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

139Changes to governing document

  1. An amendment to or a replacement of a governing document has no effect unless made—

  2. under this section with the consent of the supervisor or, if there is no supervisor, the FMA; or
    1. under section 140 or 187(3); or
      1. under section 22(7) or 37(6) of the Financial Markets Supervisors Act 2011 or any other power to amend or replace the governing document under an enactment.

        1. The supervisor or the FMA must not consent to an amendment to, or a replacement of, the governing document under this section unless—

        2. either—
          1. the amendment or replacement is approved by, or contingent on approval by, the scheme participants; or
            1. the supervisor or the FMA is satisfied that the amendment or replacement does not have a material adverse effect on the scheme participants; and
            2. in the case of the supervisor, the supervisor certifies to that effect and certifies, or obtains a certificate from a lawyer, that the governing document, as amended or replaced, will comply with sections 135 to 137 on the basis set out in the certificate.

              1. The approval of scheme participants for the purposes of subsection (2)(a) must consist of,—

              2. in the case of an amendment to or a replacement of a governing document of a defined benefit scheme or a superannuation scheme or workplace savings scheme that is registered under clause 22 of Schedule 4 that reduces, postpones, or otherwise adversely affects the benefits, whether vested, contingent, or discretionary, that may in due course flow from, or are attributable to, membership of the scheme up to the date the amendment or replacement is made, the written consent of all scheme participants who would be adversely affected by the amendment or replacement; or
                1. in any other case, a special resolution of the scheme participants or each class of scheme participants that is or may be adversely affected by the amendment or replacement.

                  1. Subsection (2) is subject to section 153(2)(b).

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