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Financial Markets Conduct Act 2013

Enforcement, liability, and appeals - Civil liability - Compensatory orders

496: Person treated as suffering loss or damage in case of defective disclosure

You could also call this:

"What happens if you lose money because someone broke the rules when selling you financial products"

Illustration for Financial Markets Conduct Act 2013

If you buy financial products and the person selling them does not follow the rules, you might suffer a loss. You will be treated as having suffered loss or damage unless it is proved that something else caused the loss. The rules they did not follow are in section 82, section 99, or clause 27 of Schedule 1.

If the value of your financial products goes down after the rules are broken, you will be treated as having suffered loss or damage. This is unless it is proved that the decline in value was caused by something other than the broken rules. The broken rules are about false or misleading statements, or things that were left out.

This law does not change what the court can do to help you if you have suffered a loss. The court can still make any order it thinks is fair to compensate you for your loss, as stated in section 495. You can still get help from the court even if this law applies to your situation.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091721.

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Money and consumer rights > Consumer protectionMoney and consumer rights > Banking and loansBusiness > Fair tradingBusiness > Industry rules
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495: Terms of compensatory orders, or

"Helping someone who was treated unfairly: getting back what they lost"

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Part 8Enforcement, liability, and appeals
Civil liability: Compensatory orders

496Person treated as suffering loss or damage in case of defective disclosure

  1. The purpose of this section is to provide that certain contraventions must be treated as causing a person to suffer loss or damage unless the contrary is proved.

  2. This section applies if—

  3. a person (A)—
    1. acquires financial products under an offer that contravenes section 82; or
      1. acquires financial products, or makes further contributions, investments, or deposits in respect of financial products, after the issuer of the financial products contravenes section 99; or
        1. acquires financial products under an offer where a person contravenes clause 27 of Schedule 1 in relation to that offer; and
        2. the financial products, contributions, investments, or deposits referred to in paragraph (a) have declined in value after the contravention referred to in paragraph (a).

          1. A must be treated as having suffered loss or damage because of the contravention unless it is proved that the decline in value was caused by a matter other than the relevant statement, omission, or circumstance.

          2. In this section, the relevant statement, omission, or circumstance is, as the case may be,—

          3. the statement that is false or misleading or is likely to be misleading referred to in section 82(1)(a)(i) or 99(1)(a)(i) or clause 27(1)(a)(i) of Schedule 1; or
            1. the omission referred to in section 82(1)(a)(ii) or 99(1)(a)(ii) or clause 27(1)(a)(ii) of Schedule 1; or
              1. the circumstance referred to in section 82(1)(a)(iii).

                1. This section does not limit section 495 (which provides for the court to make any order it thinks just to compensate an aggrieved person for the loss or damage in whole or in part).