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Financial Markets Conduct Act 2013

Enforcement, liability, and appeals - Indemnities or insurance for directors, employees, and auditors of issuers, offerors, and licensees

527: Permitted indemnities for certain liabilities or costs

You could also call this:

"When a company can help pay court costs for its directors and employees"

Illustration for Financial Markets Conduct Act 2013

If you are a director or an employee of a company, the company can help pay for your costs if you are taken to court. This can happen if you are found not guilty or if the court case is stopped. The company can also help pay for your costs if someone is suing you for something you did as a director or an employee. You cannot get help paying for costs if you did something illegal or if you did not act honestly as a director or an employee, as stated in section 526(1)(a).

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091773.

Topics:
Money and consumer rights > Banking and loansBusiness > Industry rules
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526: Prohibition on indemnities or insurance for directors or employees of issuers, offerors, or licensees that are not New Zealand companies, or

"No protection for non-NZ company staff who break financial market rules"

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528: Permitted insurance for certain liability or costs, or

"Insurance to help company directors and employees pay for costs if something goes wrong"

Part 8Enforcement, liability, and appeals
Indemnities or insurance for directors, employees, and auditors of issuers, offerors, and licensees

527Permitted indemnities for certain liabilities or costs

  1. A specified person, or a related body corporate, may, if expressly authorised by its constitution, indemnify a director or an employee of the specified person for any costs incurred by him or her in defending or settling a proceeding that relates to liability of a kind referred to in section 526(1)(a) if—

  2. judgment is given in his or her favour or if he or she is acquitted; or
    1. the proceeding is discontinued.

      1. A specified person or a related body corporate may, if expressly authorised by its constitution, indemnify a director or an employee of the specified person in respect of—

      2. liability to any person other than the specified person for any act or omission in his or her capacity as a director or an employee (not being a liability specified in subsection (3)); or
        1. costs incurred by that director or employee in defending or settling any claim or proceeding relating to any such liability.

          1. The liability specified in this subsection is—

          2. criminal liability; or
            1. a liability that arises out of a failure to act in good faith when acting in the capacity as a director or an employee.

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