Plain language law

New Zealand law explained for everyone

Financial Markets Conduct Act 2013

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

490: Maximum amount of pecuniary penalty

You could also call this:

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

Illustration for Financial Markets Conduct Act 2013

If you break a certain rule, you might get a pecuniary penalty. The maximum amount of this penalty depends on what you did. It can be the amount of money involved in what you did, or three times the amount of money you gained or saved by doing it. If that cannot be worked out, the penalty is $1 million for an individual or $5 million for others.

Some rules have different penalties, such as $200,000 for an individual or $600,000 for others. These penalties are for breaking rules like those found in section 38(3), section 101(4), section 228(4), section 385(4), section 449(4), section 461M(4), or section 461X. They also apply to rules like those in Part 7, Part 7A, and clause 21, 22(1)(b) or (c), or 25 of Schedule 4.

This text is automatically generated. It might be out of date or be missing some parts. Find out more about how we do this.

This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091711.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rulesBusiness > Fair trading
Previous

489: When court may make pecuniary penalty orders, or

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

Next

491: Guidance for court on how to determine gains made or losses avoided for purposes of maximum amount, or

"How courts calculate gains or losses when things aren't fair in financial deals"

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

490Maximum amount of pecuniary penalty

  1. The maximum amount of a pecuniary penalty for a contravention, or involvement in a contravention, of a civil liability provision referred to in subsection (2) is the greatest of—

  2. the consideration for the transaction that constituted the contravention (if any); and
    1. if it can be readily ascertained, 3 times the amount of the gain made, or the loss avoided, by the person who contravened the civil liability provision; and
      1. $1 million in the case of a contravention, or involvement in a contravention, by an individual or $5 million in any other case.

        1. The civil liability provisions to which subsection (1) applies are—

        2. a Part 2 fair dealing provision (other than a provision specified in section 38(3)):
          1. a Part 3 offer provision (other than a provision specified in section 101(4)):
            1. a Part 4 governance provision (other than a provision specified in section 228(4)):
              1. a Part 5 market provision (other than a provision specified in section 385(4)):
                1. a Part 6 services provision (other than a provision specified in section 449(4)):
                  1. a Part 7 financial reporting provision (other than a provision specified in section 461M(4)):
                    1. a Part 7A climate-related disclosure provision (other than section 461X):
                      1. an unsolicited offer provision:
                        1. clause 21, 22(1)(b) or (c), or 25 of Schedule 4 (transitional requirements).

                          1. The maximum amount of a pecuniary penalty for a contravention, or involvement in a contravention, of any other civil liability provision is—

                          2. $200,000 in the case of a contravention, or involvement in a contravention, by an individual; or
                            1. $600,000 in any other case.

                              Compare
                              Notes
                              • Section 490(2)(f): amended, on , by section 51 of the Financial Reporting (Amendments to Other Enactments) Act 2013 (2013 No 102).
                              • Section 490(2)(fa): inserted, on , by section 15 of the Financial Sector (Climate-related Disclosures and Other Matters) Amendment Act 2021 (2021 No 39).