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Financial Markets Conduct Act 2013

Licensing and other regulation of market services - Additional regulation of discretionary investment management services - Related party transactions

439: Definition of related party benefits

You could also call this:

"What is a related party benefit in investing?"

Illustration for Financial Markets Conduct Act 2013

When you read sections 440 and 441, a related party benefit is a benefit that is either given out of investor property or creates an exposure to loss for investor property. This benefit is given to, or received by, a related party of the service. You need to know that a related party of the service is the DIMS licensee or an associated person of the DIMS licensee.

A related party benefit does not include fees or expenses that are paid or reimbursed to the DIMS licensee in accordance with the client agreement for that service. You should look at sections 440 and 441 for more information about related party benefits.

A person can also be a related party of the service if they were a related party in the last 6 months, or if they think they will become a related party in the next 12 months.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091645.

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Part 6Licensing and other regulation of market services
Additional regulation of discretionary investment management services: Related party transactions

439Definition of related party benefits

  1. In sections 440 and 441, a related party benefit, in relation to a DIMS licensee providing the service, is a benefit that—

  2. is either given out of investor property or creates an exposure to loss for investor property; and
    1. is given to, or received by, a related party of the service; but
      1. does not include fees or expenses that are paid or reimbursed to the DIMS licensee in accordance with the client agreement for that service.

        1. A related party of the service is the DIMS licensee or an associated person of the DIMS licensee.

        2. A person is also a related party of the service at a particular time if—

        3. the person was a related party of the service under subsection (2) at any time within the previous 6 months:
          1. the person believes or has reasonable grounds to believe that the person is likely to become a related party of the service under subsection (2) within the next 12 months.