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Financial Markets Conduct Act 2013

Governance of financial products - Intervention in debt securities offered under regulated offer or registered schemes - Powers to obtain court orders to intervene

208: Court orders to remedy problems

You could also call this:

"Courts can fix financial product problems by making special orders to help people like you."

Illustration for Financial Markets Conduct Act 2013

If you have a problem with a financial product, the court can make orders to fix it. You can ask the court to make these orders if you are a supervisor or the FMA, and you have followed the rules in section 207. The court will listen to what you and others have to say before making a decision. The court can make orders to change the rules of the financial product, or stop the issuer from doing certain things that might hurt you. The court can also stop people from buying or selling the financial product, or from putting more money into it, and it must think about what is best for all the people involved, including you and others who have lent money to the issuer.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091228.

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207: Power of supervisor or FMA to apply for order to remedy problems, or

"Someone can ask the court for help if a financial product or scheme has problems that might harm you."

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209: Power of court to appoint new manager, provide for manager powers, and deal with changes of managers, or

"The court can appoint a new person to manage a scheme if the old one is not working properly."

Part 4Governance of financial products
Intervention in debt securities offered under regulated offer or registered schemes: Powers to obtain court orders to intervene

208Court orders to remedy problems

  1. The court may, on the application by a supervisor or the FMA under section 207 and after giving the issuer and any other person as the court thinks fit the opportunity to be heard, make 1 or more of the orders listed in subsection (2).

  2. The order or orders may—

  3. amend the provisions of the governing document:
    1. impose restrictions on the activities of the issuer (including restrictions on advertising) that the court thinks are necessary to protect the interests of product holders:
      1. direct that no offers, issues, sales, or transfers of debt securities or managed investment products specified in the order be made while the order is in force:
        1. direct that an issuer must not accept further contributions or deposits in respect of debt securities or managed investment products specified in the order while the order is in force:
          1. direct the issuer or the supervisor to convene a meeting of product holders for the purpose of—
            1. having placed before the product holders by the issuer or the supervisor the information or proposal that the court, the supervisor, or the FMA thinks necessary or appropriate relating to the product holders' interests; and
              1. obtaining the opinions or directions of product holders:
              2. give directions in relation to the conduct of any meeting convened in accordance with paragraph (e):
                1. stay any civil actions or civil proceedings before the court by or against the supervisor, the issuer, or any guarantor of the financial products:
                  1. restrain the payment of money by the custodian, the issuer, or any guarantor of the financial products to product holders or a class of product holders or restrain the transfer of scheme property by the custodian:
                    1. appoint a receiver or manager of the property that constitutes the security (if any) for the financial products (with any powers that the court orders):
                      1. remove a receiver or manager of the property that constitutes the security (if any) for the financial products:
                        1. give any other directions that the court considers necessary to protect the interests of product holders, any guarantor of the financial products, or the public.

                          1. The court may vary or cancel an order made under this section.

                          2. In exercising its powers under this section, the court must have regard to the interests of all creditors of the issuer (in the case of a debt security) and all creditors in respect of the registered scheme (in the case of a managed investment product).

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