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Financial Markets Conduct Act 2013

Governance of financial products - Governance of managed investment products - Management of scheme

168: Action that must be taken on pricing errors and failure to comply with pricing methodologies

You could also call this:

"Fixing mistakes in investment prices and telling people about them"

Illustration for Financial Markets Conduct Act 2013

If you are managing a registered scheme where people can buy or sell investment products, you need to follow some rules. You must fix any mistakes in the price of these products and tell the supervisor or the FMA about the mistake. The FMA is the organisation that makes sure companies follow the rules. You also need to take steps to fix the mistake and tell the people who are affected by it. When deciding if a mistake is important, you must use the frameworks and methodologies set out in notices issued by the FMA under subpart 4 of Part 9.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091165.

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Part 4Governance of financial products
Governance of managed investment products: Management of scheme

168Action that must be taken on pricing errors and failure to comply with pricing methodologies

  1. This section applies to a registered scheme if—

  2. the managed investment products under the scheme are transferable or redeemable; and
    1. the manager (or any person to whom the manager has contracted some or all of its functions as a manager)—
      1. makes or includes an error in the calculation of the price at which the managed investment products are issued or redeemed; or
        1. fails to comply with the methodology for pricing the managed investment products as set out in the governing document or notices issued by the FMA under subpart 4 of Part 9; and
        2. the pricing error or non-compliance is material.

          1. If this section applies, the manager must ensure that—

          2. the pricing error or non-compliance is corrected; and
            1. the pricing error or non-compliance is reported to the supervisor (or to the FMA if there is no supervisor) in the prescribed manner; and
              1. the prescribed steps are taken (which may include steps to remedy the pricing error or non-compliance and to inform current or former scheme participants).

                1. Whether or not a pricing error or non-compliance is material must be determined in accordance with the frameworks and methodologies specified in notices issued by the FMA under subpart 4 of Part 9 (if any).

                Notes
                • Section 168(1)(b)(i): amended, on , by section 58 of the Regulatory Systems (Commercial Matters) Amendment Act 2017 (2017 No 12).