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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

431P: False or misleading statements and omissions

You could also call this:

"Tell the truth and give all the important details when giving financial advice"

Illustration for Financial Markets Conduct Act 2013

When you give regulated financial advice, you must not share information that is false or misleading. If you do share information, it must be accurate and not leave out important details that are required by the regulations. You also must not share information that could hurt your client's interests in a significant way, according to what is stated in section 431O.

If you make a statement about something that might happen in the future, it is considered misleading if you do not have good reasons for making that statement. This rule applies to all statements that could mislead people.

You can find more information about what happens if you break this rule in section 511, which explains that it is an offence to knowingly or recklessly contravene this section. This section works together with section 431O, and does not limit what that section says.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS465823.

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431O: Duty to make prescribed information available, or

"Tell clients important information when you give financial advice"

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431Q: Persons engaging others to give advice must ensure compliance with duties, or

"If you pay someone to give financial advice, you must make sure they follow the rules."

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

431PFalse or misleading statements and omissions

  1. A person must not make information available under section 431O if—

  2. there is—
    1. a statement in the information that is false or misleading or is likely to mislead; or
      1. an omission from the information that is required by the regulations; and
      2. the statement or omission is materially adverse from the point of view of the client.

        1. For the purposes of this section, information about a future matter (including the doing, or not doing, of an act) is misleading if the person making the statement does not have reasonable grounds for making it.

        2. Subsection (2) does not limit the meaning of a reference to a misleading statement.

        3. This section does not limit section 431O.

        4. See section 511 (offence to knowingly or recklessly contravene this section).

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