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New Zealand law explained for everyone

Financial Markets Conduct Act 2013

Dealing in financial products on markets - Licensing of markets for trading financial products - Need for financial product market licence

312: Exemptions

You could also call this:

"When you don't need a licence to run a financial market"

Illustration for Financial Markets Conduct Act 2013

You do not need a licence to run a financial product market if it meets certain rules. The market must have fewer than 100 transactions or the total value of the products bought and sold must be less than $2 million, as decided using the frameworks or methodologies specified in notices issued by the FMA under subpart 4 of Part 9. You also do not need a licence if the market is a prescribed wholesale market or a prescribed exempt market.

When checking the number of transactions, you look at the transactions that happened on the market. If the market has been running for a full financial year, you count the transactions from that year. If the market has not been running for a full year, you count all the transactions from the last 12 months.

You need to follow these rules to see if you need a licence to run your financial product market. The rules help decide if your market is exempt from needing a licence. You must check your market against these rules to know what you need to do.

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This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091460.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rulesBusiness > Fair trading
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311: Prohibitions on holding out, or

"Don't pretend you have a licence to sell financial products if you don't really have one."

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313: When financial product market taken to be operated in New Zealand, or

"When is a financial market considered to be run in New Zealand?"

Part 5Dealing in financial products on markets
Licensing of markets for trading financial products: Need for financial product market licence

312Exemptions

  1. A financial product market is exempt from the licensing requirement under this subpart if—

  2. the market satisfies either of the following criteria (assessed in accordance with the frameworks or methodologies specified in notices issued by the FMA under subpart 4 of Part 9):
    1. the number of relevant transactions on the market does not exceed 100 transactions; or
      1. the aggregate value of the financial products acquired under the relevant transactions on the market is less than $2 million; or
      2. it is a prescribed wholesale market; or
        1. it is a prescribed exempt market.

          1. The relevant transactions on the market for the purpose of subsection (1)(a) are—

          2. if the market has been in operation for a full financial year of the market operator, the transactions entered into on the market during that financial year:
            1. if paragraph (a) does not apply, all of the transactions entered into on the market in the previous 12 months.