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Financial Markets Conduct Act 2013

Enforcement, liability, and appeals - Civil liability - Defences for person involved in contravention of civil liability provisions

503: General defences for person involved in contravention

You could also call this:

"Defences for people who break financial rules by accident"

Illustration for Financial Markets Conduct Act 2013

If you are involved in breaking a civil liability rule, you might have a defence. This defence can be used if you can prove that you relied on information given to you by someone else, and that information was wrong. You can also use this defence if you took all reasonable steps to make sure the rule was followed. When using this defence, someone else does not include a director, employee, or agent of yours. This defence applies to all civil liability rules, including rules like those found in sections 82, 99, 427, 431P, 431Y, and clause 27 of Schedule 1.

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Part 8Enforcement, liability, and appeals
Civil liability: Defences for person involved in contravention of civil liability provisions

503General defences for person involved in contravention

  1. This section applies if—

  2. a person (A) contravenes a civil liability provision; and
    1. another person (B) is involved in the contravention.

      1. In any proceeding under this subpart against B for involvement in the contravention of a civil liability provision, it is a defence if B proves that—

      2. B's involvement in the contravention was due to reasonable reliance on information supplied by another person; or
        1. B took all reasonable steps to ensure that A complied with the provision.

          1. For the purposes of subsection (2)(a), another person does not include a director, an employee, or an agent of B.

          2. To avoid doubt, this section applies to an involvement in the contravention of any civil liability provision, including sections 82, 99, 427, 431P, and 431Y and clause 27 of Schedule 1.

          Notes
          • Section 503(2)(b): amended, on , by section 42(1) of the Financial Services Legislation Amendment Act 2019 (2019 No 8).
          • Section 503(4): amended, on , by section 42(2) of the Financial Services Legislation Amendment Act 2019 (2019 No 8).