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Financial Markets Conduct Act 2013

Governance of financial products - Intervention in debt securities offered under regulated offer or registered schemes - Provisions assisting supervisor or FMA to intervene

199: Duty of auditor, investment manager, administration manager, custodian, or actuary to report serious problems

You could also call this:

"People in charge of company money must report big problems or rule breaking"

Illustration for Financial Markets Conduct Act 2013

If you are an auditor, investment manager, administration manager, custodian, or actuary for a company that issues debt securities or runs a registered scheme, you have a duty to report serious problems. You must report these problems if you think the company has broken rules, is insolvent, or has poor financial management. You can find out what steps to take to report these problems in section 200.

You need to report problems like the company breaking rules, being insolvent, or having poor management of benefits or finances. You also need to report if the manager or supervisor of the scheme breaks rules, such as those defined in section 4 of the Financial Markets Supervisors Act 2011.

You have to take these steps if you think any of these serious problems have happened or might happen, and you must follow the rules to report them.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091217.

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198: Duty of auditor to report to supervisor or FMA, or

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Part 4Governance of financial products
Intervention in debt securities offered under regulated offer or registered schemes: Provisions assisting supervisor or FMA to intervene

199Duty of auditor, investment manager, administration manager, custodian, or actuary to report serious problems

  1. This section applies to an auditor of an issuer of a debt security and to an investment manager, an administration manager, a custodian, an auditor, or an actuary of a registered scheme.

  2. A person to whom this section applies must take the steps set out in section 200 if the person has reasonable grounds to believe that any of the following has arisen in relation to a relevant financial product (a serious problem):

  3. the issuer of the relevant financial product has contravened, may have contravened, or is likely to contravene an issuer obligation in a material respect; or
    1. the issuer or scheme is, or is likely to become, insolvent; or
      1. the financial position of the scheme or issuer or the security of benefits or the management of the scheme or issuer is otherwise inadequate; or
        1. the manager of the scheme has contravened, may have contravened, or is likely to contravene any of the manager's market services licensee obligations in a material respect; or
          1. the supervisor of the scheme has contravened, may have contravened, or is likely to contravene any of the supervisor's licensee obligations (as defined in section 4 of the Financial Markets Supervisors Act 2011) in a material respect; or
            1. the custodian of the scheme has contravened, may have contravened, or is likely to contravene any of the custodian's obligations in a material respect.

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