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Financial Markets Conduct Act 2013

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

155: Power of supervisor to engage expert

You could also call this:

"The supervisor can get expert help to check a scheme is running properly"

Illustration for Financial Markets Conduct Act 2013

The supervisor of a registered scheme can get help from an expert, like an auditor or valuer, if they think it is necessary to do their job. You might need to figure out the financial situation of the scheme or its manager, or check how the scheme or manager is being run. The supervisor can get this expert help to make sure everything is okay.

If the supervisor gets an expert to help, the scheme's manager must assist the expert and pay their fees. The manager must make sure the expert has what they need to do their job, and pay them a reasonable amount for their work. The manager can then use scheme property to cover these costs, but only up to certain limits, which are explained in section 136.

The manager has to pay the expert's fees and expenses, but they can get this money back from the scheme's property, as long as it is allowed under the rules.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091149.

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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."

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155A: Application of Trusts Act 2019, or

"Rules for trusts in investment schemes are a bit different from other trusts"

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

155Power of supervisor to engage expert

  1. The supervisor of a registered scheme is entitled, in the performance of the supervisor's functions, to engage an expert (for example, an auditor, investigating accountant, valuer, or actuary) if the supervisor considers, on reasonable grounds, that it requires the assistance of the expert to—

  2. determine the financial position of the manager or the scheme; or
    1. review the business, operation, or management systems, or the governance, of the manager or the scheme.

      1. If the supervisor engages an expert under this section,—

      2. the manager must provide reasonable assistance to the expert to allow the expert to provide the assistance under subsection (1); and
        1. the manager must pay the fees and expenses of the expert, which must be reasonable in the circumstances; and
          1. the manager is entitled to be indemnified for those fees and expenses out of scheme property, subject to any limits referred to in section 136.

            Compare
            • SR 2009/230 Schedule 15 cl 11