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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

204: Duty of supervisor to report serious financial problems to FMA

You could also call this:

"Supervisors must tell the FMA about serious money problems with the companies they oversee."

Illustration for Financial Markets Conduct Act 2013

If you are a supervisor of a debt security or registered scheme, you have a duty to report serious financial problems to the FMA. You must do this if you become aware of information that suggests the issuer or scheme is insolvent or likely to become insolvent. You will know this because of your work as a supervisor.

You must tell the FMA about the problem as soon as you can. You have to share all the relevant information you have with the FMA. This includes information you got while doing your job as a supervisor. You also have to tell the FMA what steps you plan to take to fix the problem and when you will take them.

If you make a report to the FMA in good faith, you are protected under Section 214, which is about protected disclosure.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091223.

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203: Duty of supervisor to report contravention or possible contravention of issuer obligations to FMA, or

"Supervisors must report to the FMA if they think an issuer has broken or might break a rule."

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205: FMA's powers of direction, or

"The FMA can give orders to protect investors if their money is at risk."

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

204Duty of supervisor to report serious financial problems to FMA

  1. This section applies if a supervisor of a debt security or registered scheme becomes aware, in the course of or in connection with the performance of its functions as supervisor, of information on the basis of which it could reasonably form the opinion that—

  2. the issuer is, or is likely to become, insolvent; or
    1. in the case of a registered scheme, the scheme is, or is likely to become, insolvent.

      1. The supervisor must, as soon as practicable,—

      2. disclose to the FMA all information relevant to that matter that is in the possession or under the control of the supervisor and that was obtained in the course of, or in connection with, the performance of its functions as supervisor; and
        1. advise the FMA of the steps (if any) that the supervisor intends to take in respect of that matter and the date by which the steps are to be taken.

          1. Section 214 (protected disclosure) applies to a report made in good faith under this section.

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