Financial Markets Conduct Act 2013

Governance of financial products - Governance of managed investment products - Meetings of scheme participants

163: Manager and associated persons cannot vote if interested in resolution

You could also call this:

"People in charge can't vote on decisions if they'll benefit from them, to keep things fair."

Illustration for Financial Markets Conduct Act 2013

If you are the manager of a registered scheme or an associated person, you cannot vote on a resolution if you have a special interest in it, unless you are voting just as a scheme participant. You are not allowed to vote if you will gain something from the resolution, other than what you would get as a scheme participant. This rule is in place to ensure fairness.

However, there are some exceptions to this rule, for example, if the products in the scheme are publicly traded, you can vote on removing the current manager and appointing a new one. You can also vote if you are acting as a proxy and the person who appointed you has specified how you should vote. In some special circumstances, this rule may not apply to you.

If you do vote when you are not supposed to, your vote will not count and will be ignored when the votes are counted. But if the people counting the votes did not know that you voted when you should not have, and they counted your vote in good faith, the resolution will still be valid. This means that even if someone voted when they were not supposed to, the decision made by the scheme participants will still stand if it was made fairly.

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This page was last updated on 15 July 2025

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091158.

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162: Supervisor's attendance at meetings of scheme participants and power to appoint chair, or

"Supervisor's role at scheme meetings: attending, speaking, and choosing a leader"

164: Requirement for statement of investment policy and objectives, or

"Managers of investment schemes must have a plan that explains how they invest money and what rules they follow."

Part 4Governance of financial products
Governance of managed investment products: Meetings of scheme participants

163Manager and associated persons cannot vote if interested in resolution

The manager of a registered scheme and its associated persons are not entitled to, and must not, vote their interest on a resolution of scheme participants if they have an interest in the resolution or matter other than as a scheme participant.
However,—
if the managed investment products in the registered scheme are quoted, subsection (1) does not prevent the manager and its associated persons from voting their interest on resolutions to remove the manager and appoint a new manager:
the manager or its associated persons may vote as proxies if the proxy appointment specifies the way they are to vote on the resolution and they vote that way:
subsection (1) does not apply in the prescribed circumstances.

An exercise of a voting right in contravention of subsection (1) is of no effect and must be disregarded in counting the votes concerned.
However, subsections (1) and (3) do not invalidate a resolution if the votes concerned were counted in good faith and without knowledge that the voting rights were exercised in contravention of subsection (1).