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Financial Markets Conduct Act 2013

Dealing in financial products on markets - Purposes, overview, and interpretation - Relevant interests

238: Situations not giving rise to relevant interests

You could also call this:

"When you don't have a say in a financial product, even if you're involved with it for work."

Illustration for Financial Markets Conduct Act 2013

You do not have a relevant interest in a financial product just because you lend money or provide financial services as part of your ordinary business. This is if you only have the interest as security for a transaction that is part of your business. You can find more information about relevant interests in sections 235 to 237.

You also do not have a relevant interest if you are authorised to trade on a licensed market and you act for someone else to buy or sell a product. This is if you are doing this as part of your ordinary business of trading. You are allowed to do this on behalf of someone else.

There are other situations where you do not have a relevant interest, such as if you are appointed to act for a company at a meeting, or if you are a proxy voting at a meeting. You also do not have a relevant interest if you are a bare trustee of a trust, or if you are a director of a company that has a relevant interest. You can learn more about what a designated FMI and an operator are by reading section 5 of the Financial Market Infrastructures Act 2021.

Some of these situations do not apply if you have been declared by the FMA not to be exempt under those situations, as stated in a notice under section 562(1)(i). A bare trustee is still a bare trustee even if they get paid for their work from the trust's income or property.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091305.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rulesBusiness > Fair trading
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237: Extension of basic rule to interests held by other persons under control or acting jointly, or

"When others control financial products for you or do what you say, it's like you own them."

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239: Territorial scope, or

"Rules for financial products apply everywhere, not just in New Zealand"

Part 5Dealing in financial products on markets
Purposes, overview, and interpretation: Relevant interests

238Situations not giving rise to relevant interests

  1. A person (A) does not have a relevant interest in a financial product under sections 235 to 237 merely because—

  2. the ordinary business of A consists of, or includes, the lending of money or the provision of financial services, or both, and A has the relevant interest only as security given for the purposes of a transaction entered into in the ordinary course of the business of A; or
    1. A is authorised to undertake trading activities on a licensed market and A acts for another person to acquire or dispose of the product on behalf of that person in the ordinary course of A's business of carrying out those trading activities; or
      1. A has been authorised by resolution of the directors of a body corporate to act as its representative at a particular meeting of product holders, or a class of product holders, of a listed issuer, and a copy of the resolution is deposited with the listed issuer before the meeting; or
        1. A is appointed as a proxy to vote at a particular meeting of product holders, or of a class of product holders, of the listed issuer and the instrument of A's appointment is deposited with the listed issuer before the meeting; or
          1. A is a bare trustee of a trust to which the product is subject; or
            1. A is a director of a body corporate and the body corporate has a relevant interest in the product; or
              1. A is a product holder of a body corporate and the body corporate's constitution gives the product holder pre-emptive rights on the transfer of the product, if all product holders of the products have pre-emptive rights on the same terms; or
                1. A is an operator of a designated FMI and is acting in the ordinary course of that business.

                  1. Subsection (1)(a) to (h) do not apply to a person if the person is currently declared by the FMA, by notice under section 562(1)(i), to be a person that is not exempt under any of those paragraphs.

                  2. For the purposes of subsection (1)(e), a trustee may be a bare trustee even if he or she is entitled as a trustee to be remunerated out of the income or property of the trust.

                  3. In subsection (1)(h), designated FMI and operator have the meanings given in section 5 of the Financial Market Infrastructures Act 2021.

                  Compare
                  • 1988 No 234 s 6
                  Notes
                  • Section 238(1)(h): replaced, on , by section 163(1) of the Financial Market Infrastructures Act 2021 (2021 No 13).
                  • Section 238(4): inserted, on , by section 163(1) of the Financial Market Infrastructures Act 2021 (2021 No 13).