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Financial Markets Conduct Act 2013

Dealing in financial products on markets - Operation of licensed markets

364: Notice, opportunity for licensed market operator to act, and submissions before FMA gives directions

You could also call this:

"Before giving orders, the Financial Markets Authority must warn the market operator and listen to what they have to say."

Illustration for Financial Markets Conduct Act 2013

Before the Financial Markets Authority (FMA) gives a direction, they must give written notice to the licensed market operator and listed issuer. The notice must include the FMA's opinion that certain requirements are met, the proposed terms of the direction, and the reasons for their opinion. You can find more information about these requirements in section 362 and section 363.

The licensed market operator then has a reasonable period to take action to address the situation. If they do not take action, the FMA can give a direction. The FMA must consider any written submissions made by the licensed market operator and listed issuer before giving a direction.

The FMA can only give a direction if they still think it is necessary after considering the submissions and the action taken by the licensed market operator. A reasonable period for the licensed market operator to take action can be 2 trading days for some directions, or a longer time that the FMA thinks is reasonable.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091528.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rulesBusiness > Fair trading
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363: Grounds for other directions, or

"When the FMA needs to protect people buying or selling financial products, they can give special instructions."

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365: Limited notice and submissions for urgent continuous disclosure directions, or

"Urgent rules for sharing important financial information with the public"

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

364Notice, opportunity for licensed market operator to act, and submissions before FMA gives directions

  1. A direction may be given under section 361 only if—

  2. the FMA has given written notice to the licensed market operator and listed issuer or issuers concerned of—
    1. its opinion that the requirements of section 362 or 363 are satisfied; and
      1. the proposed terms of the direction; and
        1. the reasons for its opinion; and
        2. after receiving the FMA's notice, the licensed market operator does not take, within the reasonable period stated in the notice,—
          1. in the case of a proposed direction to suspend trading of the quoted financial products, action to prevent that trading; or
            1. in any other case, any other action that, in the FMA's view, is adequate to address the situation raised in the notice; and
            2. the FMA has had regard to any written submissions made to it by the licensed market operator and the listed issuer or issuers concerned within that notice period; and
              1. the FMA still considers that it is appropriate to give the direction to the licensed market operator.

                1. A reasonable period in subsection (1)(b) is, in the case of a continuous disclosure direction, 2 trading days (or any longer time the FMA wishes to allow) and, in the case of any other direction, any longer time that is reasonable in the circumstances.

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