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Financial Markets Conduct Act 2013

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

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

You could also call this:

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

Illustration for Financial Markets Conduct Act 2013

When you are a supervisor of a registered scheme, you must act honestly and in good faith. You must also act in the best interests of the people who are part of the scheme. You have to be careful and make sure you are doing your job properly. You have to fix any problems that are against the rules, like those mentioned in section 152(1)(a), unless you think they will not hurt the people in the scheme. If the people in the scheme tell you to do something, you have to listen to them, as long as it is not against any laws or rules, and it is about your job as a supervisor or fixing problems like those mentioned in section 152(1)(a). If you are doing your job and following the rules, you will not get in trouble for anything you do or do not do. Sometimes, a scheme is set up using a trust deed, and in that case, you are like a trustee, which means you have to take care of the scheme and make sure everything is fair and follows the rules, except where this Act says something different. You also have to follow any orders a court makes under section 210.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091147.

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152: Functions of supervisor, or

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

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154: Duty of supervisor to comply with professional standard of care, or

"Supervisors of investments must be careful and make good decisions like a responsible expert would."

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

153General duties applying in exercise of supervisor's functions

  1. The supervisor of a registered scheme must—

  2. act honestly and in good faith in acting as a supervisor; and
    1. in exercising its powers and performing its duties as a supervisor, act in the best interests of the scheme participants; and
      1. exercise reasonable diligence in carrying out its functions as a supervisor.

        1. The supervisor of a registered scheme must also—

        2. do all the things it has the power to do to cause any contravention referred to in section 152(1)(a) to be remedied (unless it is satisfied that the contravention will not have a material adverse effect on scheme participants); and
          1. act in accordance with any direction given by a special resolution of the scheme participants that is not inconsistent with any enactment, rule of law, or the governing document in relation to—
            1. seeking a remedy to a contravention referred to in section 152(1)(a); and
              1. any other matter connected with the supervisor's functions.

              2. The supervisor is not liable for anything done, or omitted to be done, in good faith in giving effect to a direction to it by scheme participants.

              3. If the registered scheme is established under a trust deed,—

              4. the supervisor is the trustee of the trust; and
                1. the supervisor has the same duties and liability in the performance of its functions as supervisor as it would if it performed those functions as a trustee (except to the extent that those duties are altered by or are inconsistent with this Act).

                  1. The duty in subsection (2)(b) is subject to any order of the court made under section 210.

                  Compare
                  Notes
                  • Section 153(1)(a): amended, on , by section 169 of the Trusts Act 2019 (2019 No 38).