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Financial Markets Conduct Act 2013

Enforcement, liability, and appeals - FMA's enforcement powers - Stop orders

462: When FMA may make stop orders

You could also call this:

"When the Financial Markets Authority can stop something that might be unfair or wrong"

Illustration for Financial Markets Conduct Act 2013

The Financial Markets Authority (FMA) can make a stop order if they think something is wrong. You might see a stop order if a document about a financial product is false or misleading. The FMA can also make a stop order if someone breaks the rules about financial products.

The FMA can make a stop order if someone is likely to break the rules in the future. This can happen even if the person has not broken the rules before. The FMA can make a stop order to prevent damage to people.

Before the Minister makes new regulations, they must think they are necessary. The Minister must consider if the regulations will help with recognition or application regimes under subpart 6 of Part 9. The FMA has to follow the rules when making a stop order.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091668.

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Part 8Enforcement, liability, and appeals
FMA's enforcement powers: Stop orders

462When FMA may make stop orders

  1. The FMA may make a stop order if it is satisfied that—

  2. a PDS, a register entry, or a limited disclosure document for an offer of financial products—
    1. is false or misleading, or is likely to mislead or confuse, in a material particular; or
      1. contains any material misdescription or material error or any material matter that is not clearly legible; or
        1. does not comply with this Act or the regulations; or
        2. any provision of Part 3, clause 13, 17, 26, 27, or 28 of Schedule 1, or clause 25 of Schedule 4 has been, or is likely to be, contravened in respect of an offer of financial products; or
          1. section 103 (need for governing document and supervisor) has been, or is likely to be, contravened in respect of debt securities; or
            1. section 125 (need to register) has been, or is likely to be, contravened in respect of managed investment products; or
              1. a registered scheme no longer meets the registration requirements in section 127 or the registration requirements for a particular type of scheme under sections 128 to 132; or
                1. a restricted communication relating to an offer, or intended offer, of financial products, or the supply, or possible supply, of financial services,—
                  1. is false or misleading, or is likely to mislead or confuse, in a material particular; or
                    1. is materially inconsistent with any disclosure document referred to in it; or
                      1. contains any material misdescription or material error or any material matter that is not clearly legible; or
                        1. does not comply with this Act or the regulations; or
                        2. disclosure relating to financial products under subpart 4 of Part 3, or a disclosure document relating to market services under subpart 4, 5A, or 5B of Part 6,—
                          1. is false or misleading, or is likely to mislead or confuse, in a material particular; or
                            1. contains any material misdescription or material error or any material matter that is not clearly legible; or
                              1. does not comply with this Act or the regulations; or
                              2. an issuer of financial products, or a person that provides a licensed market service, has contravened any provision of Part 7 or 7A; or
                                1. any provision of section 388, 391, 423, 431G, 431O, or 431X has been, or is likely to be, contravened in respect of the supply of market services; or
                                  1. 1 or more of the prescribed grounds apply.

                                    1. If the FMA is satisfied that a provision referred to in subsection (1)(b) to (d) or (h) is likely to be contravened by a person (A) in the future, the FMA may make a stop order—

                                    2. whether or not A has previously contravened the provision; and
                                      1. whether or not there is an imminent danger of substantial damage to any person if the provision is contravened.

                                        1. Before making a recommendation for regulations for the purposes of subsection (1)(i), the Minister must be satisfied that the regulations are necessary or desirable for the purpose of enabling a recognition regime or an application regime (or both) to be implemented under subpart 6 of Part 9.

                                        Notes
                                        • Section 462(1)(a): amended, on , by section 83 of the Regulatory Systems (Commercial Matters) Amendment Act 2017 (2017 No 12).
                                        • Section 462(1)(g): replaced, on , by section 35(1) of the Financial Services Legislation Amendment Act 2019 (2019 No 8).
                                        • Section 462(1)(ga): inserted, on , by section 49 of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
                                        • Section 462(1)(ga): amended, on , by section 9 of the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021 (2021 No 39).
                                        • Section 462(1)(h): amended, on , by section 35(2) of the Financial Services Legislation Amendment Act 2019 (2019 No 8).
                                        • Section 462(1)(i): inserted, on , by section 102(1) of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).
                                        • Section 462(3): inserted, on , by section 102(2) of the Regulatory Systems (Economic Development) Amendment Act 2025 (2025 No 11).