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Financial Markets Conduct Act 2013

Enforcement, liability, and appeals - Civil liability - Declarations of contravention and pecuniary penalty orders

489: When court may make pecuniary penalty orders

You could also call this:

"When a court can order you to pay a penalty for breaking financial market rules"

Illustration for Financial Markets Conduct Act 2013

The Financial Markets Authority (FMA) can ask a court to make a pecuniary penalty order against you. If the FMA does this, the court must decide if you have broken a civil liability provision. The court must also say you have broken the provision if they are satisfied you have.

The court can then order you to pay a penalty to the Crown if they think it is appropriate. However, the court cannot make you pay a penalty in certain situations, such as those referred to in section 446O or section 431U, section 461C, or section 461ZF. The court also cannot make you pay a penalty for breaking section 19.

If you are a director, the court can make a pecuniary penalty order against you if you are treated as breaking a civil liability provision under section 534, but only if the FMA has asked for the order against you. This means the court can order you to pay a penalty if they think you have broken the rules. You should be aware of the rules to avoid breaking them.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091709.

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488: What declarations of contravention must state, or

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490: Maximum amount of pecuniary penalty, or

"The Maximum Amount You Might Have to Pay if You Break the Rules"

Part 8Enforcement, liability, and appeals
Civil liability: Declarations of contravention and pecuniary penalty orders

489When court may make pecuniary penalty orders

  1. The FMA may apply for a pecuniary penalty order against a person under this Act.

  2. If the FMA applies for a pecuniary penalty order against a person under this Act, the court—

  3. must determine whether the person has contravened, or been involved in a contravention of, a civil liability provision; and
    1. must make a declaration of contravention if it is satisfied that the person has contravened, or been involved in a contravention of, a civil liability provision; and
      1. may order the person to pay to the Crown a pecuniary penalty that the court considers appropriate if it is satisfied that the person has contravened, or been involved in a contravention of, a civil liability provision.

        1. However, a pecuniary penalty order may not be made—

        2. for a contravention, or involvement in a contravention, of section 19:
          1. in the circumstances referred to in section 446O:
            1. in the circumstances referred to in section 431U, 461C, or 461ZF.

              1. The court may make a pecuniary penalty order against a director who is treated as contravening a civil liability provision under section 534 (but only if the FMA has applied for the order against the director).

              Compare
              Notes
              • Section 489(3): replaced, on , by section 50 of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
              • Section 489(3)(ab): inserted, on , by section 17 of the Financial Markets (Conduct of Institutions) Amendment Act 2022 (2022 No 36).
              • Section 489(3)(b): amended, on , by section 14 of the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021 (2021 No 39).
              • Section 489(3)(b): amended, on , by section 38 of the Financial Services Legislation Amendment Act 2019 (2019 No 8).