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Financial Markets Conduct Act 2013

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

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

You could also call this:

"Changing the rules of a registered scheme with FMA or court approval"

Illustration for Financial Markets Conduct Act 2013

If you manage a registered scheme, you can change its governing document with the FMA's consent. The FMA will agree if the change is needed to comply with certain rules, such as sections 135 to 137. You can also change the governing document with the court's consent, but only for certain types of schemes, like defined benefit schemes or superannuation schemes registered under clause 22 of Schedule 4. The court will agree if the change would otherwise need everyone's consent, and if the court thinks it is in the best interests of the scheme participants.

The rules that normally apply to changing a governing document do not apply in this case. This means you can make changes even if the governing document or other rules say you cannot.

The FMA can decide what conditions must be met before it agrees to a change. If a change is made, it must be treated as if it was authorised by the governing document. This means the change is valid and must be followed, even if it was not made in the usual way.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091131.

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139: Changes to governing document, or

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

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141: Lodging of changes to governing document, or

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

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

  1. A manager of a registered scheme may amend or replace the governing document—

  2. with the FMA's consent if the FMA is satisfied that the amendment or replacement is necessary to enable the governing document to comply with sections 135 to 137 or any enactment or rule of law; or
    1. with the court's consent, in the case of a defined benefit scheme or a superannuation scheme or workplace savings scheme that is registered under clause 22 of Schedule 4, if—
      1. the amendment or replacement would otherwise require the consent of all the scheme participants who would be adversely affected by it; and
        1. the court considers that it is in the interests of the scheme participants.

        2. Subsection (1) applies despite anything to the contrary in the governing document or in any enactment, rule of law, or agreement, including anything relating to the consent of any person to the making of amendments to the governing document.

        3. The FMA's discretion to set preconditions for requests to it includes (without limitation) a discretion to set preconditions that satisfy the FMA that it is appropriate for the amendment or replacement to be made under this section rather than by means of another power or process.

        4. An amendment or a replacement made under this section must be treated for all purposes as if it were authorised by, and made in accordance with, the governing document.