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Financial Markets Conduct Act 2013

Governance of financial products - Governance of managed investment products - Role of supervisor

152: Functions of supervisor

You could also call this:

"The supervisor's job is to protect investors and make sure scheme managers follow the rules."

Illustration for Financial Markets Conduct Act 2013

The supervisor of a registered scheme is responsible for certain tasks. You can think of the supervisor as someone who looks out for the people who have invested in the scheme. The supervisor acts on behalf of these investors when dealing with the scheme's manager, any issues with the scheme's rules, or if someone breaks the rules.

The supervisor also keeps an eye on the manager to make sure they are doing their job and following the rules. They check that the manager and the scheme have enough money to operate properly. The supervisor is in charge of the scheme's property and makes sure it is handled correctly, as outlined in sections 156 to 158.

The supervisor has other jobs too, which are set out in the Financial Markets Conduct Act, the Financial Markets Supervisors Act 2011, and the scheme's rules. The supervisor is not allowed to pass on their tasks to someone else, except in certain situations allowed by section 156 or the Financial Markets Supervisors Act 2011.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091146.

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151: Duty of manager to report serious financial problems, or

"Managers must report big money problems to supervisors or the Financial Markets Authority."

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153: General duties applying in exercise of supervisor's functions, or

"Supervisors of schemes must act honestly, carefully, and in the best interests of scheme members."

Part 4Governance of financial products
Governance of managed investment products: Role of supervisor

152Functions of supervisor

  1. The supervisor of a registered scheme is responsible for the following functions:

  2. acting on behalf of the scheme participants in relation to—
    1. the manager; and
      1. any matter connected to the governing document or the terms of any regulated offer; and
        1. any contravention or alleged contravention of the issuer obligations; and
          1. any contravention or alleged contravention of this Act by any other person in connection with the registered scheme; and
          2. supervising—
            1. the performance by the manager of its functions and its issuer obligations; and
              1. the financial position of the manager and the scheme in respect of the managed investment product to ascertain that it is adequate; and
              2. holding the scheme property, or ensuring that the scheme property is held, in accordance with sections 156 to 158; and
                1. performing or exercising any other functions, powers, and duties conferred or imposed on the supervisor by or under this Act, the Financial Markets Supervisors Act 2011, and the governing document.

                  1. The supervisor must not delegate its functions under subsection (1) (except as expressly permitted by section 156 in relation to its function under subsection (1)(c) and otherwise by this Act or as permitted by, and then subject to, conditions imposed under the Financial Markets Supervisors Act 2011).

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