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Financial Markets Conduct Act 2013

Licensing and other regulation of market services - Additional regulation of financial advice and financial advice services - Duties on persons giving regulated financial advice

431N: Duty relating to offer that contravenes Act or regulations

You could also call this:

"Don't recommend financial products that break the law"

Illustration for Financial Markets Conduct Act 2013

If you give regulated financial advice to someone, you must not recommend a financial product if it breaks the law. You should not suggest a product if you know, or should know, it is not allowed under the Financial Markets Conduct Act 2013 or its regulations. A product is considered a contravening product if it is being offered in a way that breaks the law, or if it was offered in a way that broke the law and this has not been fixed.

You have a duty to make sure the products you recommend follow the rules. If a product is a contravening product, you must not tell someone to buy it. This helps keep people safe when they are making financial decisions.

The rules about contravening products are part of the Financial Markets Conduct Act 2013, which you can find on the New Zealand legislation website.

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This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS465821.

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431M: Duty to comply with code of conduct, or

"Follow the rules to give fair financial advice"

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431O: Duty to make prescribed information available, or

"Tell clients important information when you give financial advice"

Part 6Licensing and other regulation of market services
Additional regulation of financial advice and financial advice services: Duties on persons giving regulated financial advice

431NDuty relating to offer that contravenes Act or regulations

  1. A person (A) who gives regulated financial advice to a client (C) must not recommend that C acquire a financial product if—

  2. the product is a contravening product; and
    1. A knows, or ought reasonably to know, that the product is a contravening product.

      1. A financial product is a contravening product—

      2. if the product is being offered under a regulated offer and that offer contravenes this Act or the regulations; or
        1. if,—
          1. when the product was offered, the offer was a regulated offer and contravened this Act or the regulations; and
            1. the contravention has not been remedied.

            Notes
            • Section 431N: inserted, on , by section 29 of the Financial Services Legislation Amendment Act 2019 (2019 No 8).