546Regulations for purposes of Part 6 (market services)

1. The Governor-General may, by Order in Council, on the recommendation of the Minister in accordance with section 549, make regulations for all or any of the following purposes:

   Issue of licences

2. prescribing matters relating to the issue of market services licences, including—
   1. eligibility criteria for licences and for the purposes of section 400 (including requirements relating to competence, qualifications, and experience, prudential requirements, and requirements relating to the business, operation, or management of an applicant and, for the purposes of section 400, a related body corporate or an entity referred to in section 400(1A)):
   2. requirements that the applicant's directors, senior managers, and proposed directors and senior managers must satisfy:
   3. matters that the FMA must have regard to:
   4. persons or classes of persons whom the FMA must consult:
   5. information for the purposes of section 401(2)(e):
   6. eligibility criteria to be met by a DIMS licensee before a custodian of investor money or investor property is, subject to conditions imposed, under paragraph (d)(iii), permitted to be an associated person of the DIMS licensee:
3. prescribing overseas markets and circumstances for the purposes of section 389(1)(c):
4. exempting (on terms and conditions, if any) services from the licensing requirement for providers of financial advice services for the purposes of section 389(2)(b):
5. exempting (on terms and conditions, if any) services from the licensing requirement for providers of discretionary investment management services for the purposes of section 389(3)(b):
6. prescribing terms and conditions of the exemption for Lloyd’s underwriters under section 389(4)(a), including any term or condition that imposes requirements on Lloyd’s, Lloyd’s underwriters, or Lloyd’s managing agents (see section 449A):
7. exempting (on terms and conditions, if any) services from the licensing requirement for providers of the service of acting as a financial institution for the purposes of section 389(4)(b):

Conditions of licences

8. prescribing conditions that market services licences are subject to, the kinds of conditions that the FMA may impose on those licences, or matters to which conditions imposed by the FMA may relate, including (without limitation) providing for—
   1. conditions that regulate the manner in which licensed market services must be carried out under the licence:
   2. conditions that impose prudential requirements on licensees or authorised bodies or otherwise regulate the business, operation, or management of licensees or authorised bodies (for example, requirements to have a credit rating or to maintain a minimum amount of capital, requirements relating to margins, or requirements relating to the receipt of money and property from clients):
   3. in the case of a DIMS licensee, the conditions subject to which a custodian of investor money or investor property is permitted to be an associated person of the DIMS licensee:
   4. in the case of a licence relating to a financial advice service, conditions of a kind described in section 403(4):
   5. in the case of a licence to act as an administrator of a financial benchmark, conditions of a kind described in section 403(5):
   6. in relation to a licence relating to acting as a financial institution, conditions that prohibit or regulate incentives, or the offer or giving of incentives to any person, in connection with a relevant service or an associated product:
9. stating whether a condition imposed on a market services licence by the regulations is a Part 6 services provision that gives rise to civil liability under section 449(4):

Reporting

10. prescribing matters relating to reports or other disclosure under subpart 3 of Part 6, including the times and events referred to in that subpart and the information that must be contained in the reports (including prescribing the manner in which the information is to be presented, calculated, or prepared):

Disclosure obligations

11. prescribing the information that must, or must not, be contained in disclosure statements for the purposes of subpart 4 of Part 6 (including prescribing the manner in which the information is to be presented, calculated, or prepared):
12. prohibiting or restricting the use in those disclosure statements of prescribed words, information, sounds, images, graphics, or other matters:
13. prescribing requirements as to the form, layout, or method of presentation of those disclosure statements (including the length of the whole or any part of the statement, the size of type used, and when information may be incorporated by reference):
14. determining when disclosure is required, and when minimum disclosure may be given, under that subpart (including by requiring disclosure only on request) and what minimum disclosure must be given:
15. prohibiting or restricting the combining of disclosure statements:
16. prescribing the information that must be made available under section 426A, the times or events referred to in that section, the persons who may make a request, the persons to whom information must be made available, and the manner of making the information available (including prescribing the manner in which the information is to be presented, calculated, or prepared):
17. prescribing circumstances for the purposes of section 427(3)(a):
18. prescribing conditions for the purposes of section 427(3)(b) (for example, requiring a corrective statement or a warning notice to be provided to an investor or requiring some other specified action to be taken to avoid or mitigate any actual or potential adverse effects of making the defective disclosure as referred to in section 427(1)):

Client agreements

19. prescribing the matters that must be contained in a client agreement required for the purposes of subpart 5 of Part 6:
20. prescribing provisions to be implied in a client agreement (see subsection (3)):

Financial advice services and client money or property services

21. prescribing kinds of financial planning for the purposes of section 431C(1)(d):
22. prescribing eligibility criteria for the purposes of section 431I:
23. prescribing the information that must be made available under section 431O, and when and the manner in which it must be made available:
24. prescribing the information that must be disclosed under section 431X and the manner in which it must be disclosed (including prescribing the manner in which the information is to be presented, calculated, or prepared):
25. prescribing documents or information the giving of which does not constitute the giving of financial advice under clause 7(f) of Schedule 5:
26. prescribing activities for the purposes of clause 7(g) of Schedule 5 (activities that are not giving financial advice):
27. prescribing occupations for the purposes of clause 8(2) or 19(1) of Schedule 5:
28. prescribing circumstances in which financial advice is not regulated financial advice for the purposes of clause 17 of Schedule 5:
29. prescribing circumstances in which a client money or property service is not a regulated client money or property service for the purposes of clause 22 of Schedule 5:
30. providing for any or all of sections 431ZC to 431ZH to apply to wholesale clients and the extent to which and the circumstances in which they so apply:
31. prescribing the duties and obligations of providers of client money or property services in relation to client money and client property:
32. prescribing entities for the purposes of section 431ZC:
33. specifying who may be a related body corporate for the purposes of section 431ZC:
34. prescribing circumstances for the purposes of section 431ZC(3)(a):
35. providing for the matters referred to in section 431ZC(3)(b):
36. regulating the establishment and operation of a trust account under subpart 5B of Part 6 and the receipt, handling, and application of client money and client property by a provider of client money or property services (including prescribing requirements relating to the investment of money that is held in trust and providing for how interest or other income from that investment is to be paid, retained, or otherwise dealt with):
37. regulating the keeping, retention, reconciliation, inspection, and audit or review of trust account records and other records and procedures of providers of client money or property services:
38. prescribing any other requirements necessary or desirable to ensure that trust accounts are duly kept and that persons on whose behalf client money and client property are held by providers are informed of the client money and client property held and of the transactions made in connection with it (including prescribing what confirmation information must be made available and any other matters for the purposes of section 431ZF):
39. prescribing matters to regulate the delivery of client money or client property to the person on whose behalf they are held, and other steps to be taken or provisions to apply, in connection with the termination of any client money or property service:

Discretionary investment management services

40. prescribing matters relating to the reporting of limit breaks:
41. prescribing circumstances for the purposes of section 445:

Regulating conduct of financial institutions

42. prescribing requirements for fair conduct programmes, including (without limitation) additional, or more detailed, requirements relating to the matters set out in section 446J(1)(a) to (l) or requirements relating to 1 or more of the following in connection with a relevant service or an associated product:
    1. governance and management of conduct and risks associated with that conduct:
    2. monitoring outcomes for consumers, including whether consumers’ interests are being had regard to:
    3. how the services or products are designed and managed:
    4. dealing with consumer complaints:
    5. dealing with insurance claims:
    6. communicating with consumers, including particular disclosure requirements and requirements for warnings:
    7. procedures or processes that intermediaries or agents must follow to support the financial institution’s compliance with the fair conduct principle:
    8. the design and management of incentives:
43. prescribing classes of service for the purposes of section 446F(1)(b):
44. prescribing matters for the purposes of section 446H:
45. prescribing factors for the purposes of section 446J(2)(g):
46. prescribing requirements for the purposes of section 446J(4)(a) or (b):
47. prescribing matters for the purposes of section 446Q(4)(b) and (c):
48. prohibiting or regulating any incentive, or any practice, activity, or other conduct in connection with offering or giving any incentive to any person, in connection with a relevant service or an associated product, including prescribing the manner in which an incentive may be offered or given:
49. prescribing classes of contract for the purposes of paragraph (b)(i) of the definition of consumer credit contract in section 446P:
50. prescribing matters for the purposes of section 446V(3)(b):

Miscellaneous

51. prescribing the procedure of the code committee:
52. prescribing the procedure of the disciplinary committee:
53. prescribing persons or classes of persons to whom notices under Part 6 must be given:
54. prescribing the circumstances referred to in section 424(3) or 426(1):
55. prescribing overseas schemes, benefits, interests, or transactions for the purposes of section 441(b) and (d):
56. prescribing the form or contents of any certificate or other document referred to in Part 6, and the manner in which it may be made or given.

57. Subsection (1)(b), (c), (ca), (cc), (me), (mf), (mg), (mh), (mi), (mn), (o), (ob), (oe), and (of) is subject to section 550 (which provides for certain procedural requirements relating to regulations made under that paragraph).

58. A provision prescribed for the purposes of subsection (1)(m) may, without limitation, specify the duties of the licensee or authorised body under the client agreement (including to supplement, or to add to, any duties prescribed by this Act).

59. The Minister may make a recommendation for regulations under subsection (1)(og) (which relates to prohibiting or regulating incentives) only if the Minister—

60. has had regard to the purposes of this Act and the fair conduct principle; and
61. has had regard to whether the regulations are likely to—
    1. appropriately reduce or manage conflicts or potential conflicts between the interests of consumers and the interests of persons who would otherwise be entitled to receive incentives; or
    2. otherwise mitigate or avoid the actual or potential adverse effects of incentives on the interests of consumers; and
62. has had regard to the likely effect of the regulations—
    1. on the availability of financial advice and the availability of financial services and financial advice products; and
    2. on the financial services industry generally; and
63. is satisfied that the matters to which the regulations relate are not more appropriately dealt with in an Act.

64. The breach of a term or condition prescribed under subsection (1)(c), (ca), (cb), or (cc) is a breach of section 388 (unless the regulations otherwise provide).

65. Regulations under this section are secondary legislation (see Part 3 of the Legislation Act 2019 for publication requirements).