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Financial Markets Conduct Act 2013

Regulations, transitional provisions, and miscellaneous provisions - FMA's designation power

563: Procedural requirements

You could also call this:

"Steps the Financial Markets Authority must follow before making a decision"

Illustration for Financial Markets Conduct Act 2013

The Financial Markets Authority, or FMA, must follow certain steps before making a declaration. You need to know the FMA can only make a declaration if it thinks this is necessary or desirable to achieve the main purposes of the Financial Markets Conduct Act, which are outlined in section 3 and section 4. The FMA also has to consider other factors, such as the economic substance of a security, and consult with people who will be affected by the declaration.

When the FMA is considering a declaration under section 562(1)(a) to (d), it must think about the economic substance of the relevant security. For declarations under section 562(1)(e), the FMA must be satisfied that the offer or class of offers is not trying to circumvent the purposes of the Act.

In some cases, such as those under section 562(1)(gb), (gc), or (h)(i), the FMA must think about whether the declaration will help achieve the purpose outlined in section 431B. If the FMA does not consult with the people who will be affected, this does not necessarily mean the declaration is invalid, according to subsection (1)(d) and subsection 2.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM4091828.

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562: FMA's designation power, or

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Part 9Regulations, transitional provisions, and miscellaneous provisions
FMA's designation power

563Procedural requirements

  1. The FMA must not make a declaration under this subpart unless—

  2. it is satisfied that the declaration is necessary or desirable in order to promote either or both of the main purposes of this Act specified in section 3 or any of the additional purposes specified in section 4; and
    1. in the case of section 562(1)(a) to (d), it has had regard to the economic substance of the relevant security; and
      1. in the case of section 562(1)(e), it is satisfied that the offer or class of offers has, or would have, a purpose or an effect of circumventing, evading, or defeating any of the purposes referred to in paragraph (a) (having regard to the economic substance of the offer or offers); and
        1. in the case of section 562(1)(gb), (gc), or (h)(i), it is satisfied that the declaration is necessary or desirable in order to promote the additional purpose specified in section 431B; and
          1. it has consulted the persons or representatives of the persons that the FMA considers will be substantially affected by the declaration.

            1. A failure to comply with subsection (1)(d) does not affect the validity of the declaration.

            Notes
            • Section 563(1)(ca): inserted, on , by section 52 of the Financial Services Legislation Amendment Act 2019 (2019 No 8).