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Financial Markets Conduct Act 2013

Licensing and other regulation of market services - Additional regulation of licences relating to financial benchmarks

448D: FMA’s powers to direct administration of financial benchmark

You could also call this:

"The FMA can direct a company on how to manage a financial benchmark if it's not being run properly."

Illustration for Financial Markets Conduct Act 2013

The FMA can tell a company to keep running a financial benchmark in a certain way if the company stops or is likely to stop. This happens when it is necessary to achieve the goals outlined in section 448B. The FMA can also tell the company to transfer or stop the benchmark in a certain way. You need to know the FMA can give directions about how to run the benchmark, and the company must follow these directions. The company must help the FMA and follow the directions, which can include changing rules or documents, transferring the benchmark to another person, or stopping the benchmark in an orderly way, and providing necessary material to another person.

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448C: FMA’s powers to direct contributor to provide information or data, or

"The FMA can ask you to share information to help keep financial benchmarks fair and working well."

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448E: Duration of direction, or

"How long you have to follow a direction from the FMA"

Part 6Licensing and other regulation of market services
Additional regulation of licences relating to financial benchmarks

448DFMA’s powers to direct administration of financial benchmark

  1. The FMA may exercise a power under subsection (2) if it is satisfied that—

  2. a licensee or an authorised body has ceased or is likely to cease generating or operating a financial benchmark specified in a licence; and
    1. it is necessary or desirable in order to promote any of the purposes set out in section 448B.

      1. The FMA may, by written notice and otherwise in the prescribed manner, give a direction to a licensee or an authorised body—

      2. to continue to generate or operate the financial benchmark in a particular way; or
        1. to transfer or cease the generation or operation of the financial benchmark in a particular way.

          1. A direction may (without limitation) specify 1 or more requirements relating to the following:

          2. changes to the rules or procedures by which the financial benchmark is generated:
            1. changes to the documents under which the financial benchmark is generated or operated (for example, any compliance documents required by a condition of the licence):
              1. the orderly transfer of the generation or operation of the financial benchmark to another person:
                1. the orderly cessation of the generation or operation of the financial benchmark:
                  1. the provision of material (including information, data, computer software, instructions, methodologies, formulas, or algorithms) to another person, where the provision of that material is necessary or desirable for the generation, operation, or transfer of that financial benchmark.

                    1. The licensee or authorised body must—

                    2. give the FMA all reasonable assistance to facilitate the continued generation and operation of the financial benchmark (or the orderly cessation of the financial benchmark); and
                      1. comply with the direction.

                        1. See subpart 3 of Part 8, which provides for civil liability for a contravention of this section.

                        Notes
                        • Section 448D: inserted, on , by section 43 of the Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Act 2019 (2019 No 46).