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Financial Markets Conduct Act 2013

Dealing in financial products on markets - Insider trading - Defences

259: Equal information

You could also call this:

"You're not in trouble if others already knew the secret information before a deal happened."

Illustration for Financial Markets Conduct Act 2013

If you are taken to court for breaking section 241 of the Financial Markets Conduct Act 2013, you have a defence if the other person involved knew the same secret information as you before the deal happened. You can also use this defence if you should have reasonably expected the other person to know the secret information. This means you will not be in trouble if the other person already knew the secret.

If you are taken to court for breaking section 242 of the Financial Markets Conduct Act 2013, you have a defence if the person you told the secret to already knew the secret. You can also use this defence if you should have reasonably expected the person to know the secret. This means you will not be in trouble if the person already knew the secret.

If you are taken to court for breaking sections 242 or 243 of the Financial Markets Conduct Act 2013 by telling someone a secret or advising them to buy or sell financial products, you have a defence if you only knew the secret because you were advising that person. This means you will not be in trouble if you were just doing your job as an adviser. You can find more information about this in sections 242 and 243 of the Financial Markets Conduct Act 2013, which you can read by following the links to section 242 and section 243.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091357.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rulesBusiness > Fair trading
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258: Inside information obtained by independent research and analysis, or

"Getting inside information by doing your own research is a valid defence."

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260: Options and trading plans, or

"You have a defence against breaking the law if you traded with a plan or options you set up beforehand."

Part 5Dealing in financial products on markets
Insider trading: Defences

259Equal information

  1. In any proceeding against a person (A) for contravention of section 241, it is a defence if the opposite party to the transaction knew, or ought reasonably to have known, the same inside information as A before the transaction took place.

  2. In any proceeding against a person (A) for contravention of section 242, it is a defence if the person to whom the information is disclosed knew, or ought reasonably to have known, the same inside information as A before it was disclosed.

  3. In any proceeding against a person (A) for contravening section 242 or 243 by disclosing inside information to another person (B) or by advising or encouraging B to trade or hold quoted financial products, it is a defence if A has that inside information, or is an information insider, only through acting as B's adviser in relation to trading or holding those financial products.

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