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New Zealand law explained for everyone

Financial Markets Conduct Act 2013

Dealing in financial products on markets - Operation of licensed markets

361: FMA may give directions to licensed market operators

You could also call this:

"The referee of financial markets can give orders to market operators to keep things fair and safe."

Illustration for Financial Markets Conduct Act 2013

The FMA can give directions to people who run licensed markets. You can think of the FMA like a referee who makes sure everyone follows the rules. The FMA can tell a licensed market operator what to do for up to 15 trading days. The FMA can tell them to stop trading certain financial products, give them other directions about trading, or stop certain people from participating in the market. The FMA must follow specific rules, which are outlined in sections 362 to 366, when giving these directions.

The FMA cannot tell a licensed market operator to change the market rules or make certain decisions about the rules. If the FMA gives a direction, you can appeal it, but only by following the process in section 532. This means that if you disagree with the FMA's direction, you can ask for it to be reviewed, but you must do it in a specific way.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091525.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rulesBusiness > Fair trading
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"Urgent decisions can be made quickly with less notice if it's necessary for the public."

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"When to get in trouble for not sharing important information with investors"

Part 5Dealing in financial products on markets
Operation of licensed markets

361FMA may give directions to licensed market operators

  1. The FMA may give a direction under subsection (2) in accordance with sections 362 to 366 in relation to a licensed market.

  2. The FMA may, for up to 15 trading days,—

  3. direct a licensed market operator to suspend trading of quoted financial products or a class of quoted financial products; or
    1. give the licensed market operator any other direction in relation to that trading; or
      1. direct a licensed market operator to suspend participation by a participant or class of participants in the licensed market.

        1. To avoid doubt, the FMA may not use its power to direct the licensed market operator to amend the market rules or to direct the licensed market operator on the making of a determination on the market rules.

        2. The direction is subject to appeal only in accordance with section 532.

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