Trusts Act 2019

Schedule 3: Specified commercial trusts

You could also call this:

"Trusts that help with business deals and investments"

The Trusts Act 2019 has a schedule about specified commercial trusts. You need to know what a specified commercial trust is. It is a trust that helps with commercial transactions.

A specified commercial trust can be an express trust, a wholesale trust, or a security trust. An express trust is created to help with a commercial transaction. A wholesale trust is a trust that deals with wholesale investors. A security trust is a trust that holds security over assets for the benefit of counterparties.

Some parts of the Trusts Act 2019 do not apply to specified commercial trusts. For example, section 39 and section 43 do not apply to specified commercial trusts. Other parts of the Act may apply to specified commercial trusts, but only if the trust was created after the Act came into effect.

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This page was last updated on 18 July 2025

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM7383155.

Topics:

Money and consumer rights > Banking and loansBusiness > Industry rules

Schedule 2: Provisions that apply except as modified or excluded in accordance with section 5(4), or

"Rules that apply to trusts, unless the trust says otherwise or the law allows changes"

Schedule 4: Amendments consequential on repeal of Trustee Act 1956, or

"Changes to other laws because of the new Trusts Act 2019"

3Specified commercial trusts Empowered by ss 5(6), 9

1Meaning of specified commercial trust

A specified commercial trust means—
an express trust (within the meaning of section 12)—
1. that is created for the purpose of facilitating 1 or more commercial transactions; and
2. every beneficiary of which is a beneficiary as a result of entering into the commercial transaction that the trust is created to facilitate, or as a result of entering into a commercial transaction of the type that the trust is created to facilitate; or
a wholesale trust; or
a security trust.

To avoid doubt, a trust—
ceases to be a specified commercial trust under clause 1(1)(a) if any person becomes a beneficiary of the trust and clause 1(1)(a)(ii) does not apply to that beneficiary; and
is not a specified commercial trust for as long as that person is a beneficiary of the trust.

In this clause,—
commercial transaction is a transaction that all parties enter into in trade
goods—
1. means personal property of every kind (whether tangible or intangible); and
2. includes—
  1. ships, aircraft, and vehicles:
  2. animals, including fish:
  3. minerals, trees, and crops, whether on, under, or attached to land or not:
  4. gas and electricity:
  5. to avoid doubt, water and computer software
services—
1. includes any rights (including rights in relation to, and interests in, real or personal property), benefits, privileges, or facilities that are or are to be provided, granted, or conferred; and
2. without limiting paragraph (a), includes the rights, benefits, privileges, or facilities that are or are to be provided, granted, or conferred under any of the following classes of contract:
  1. a contract for, or in relation to,—
    1. the performance of work (including work of a professional nature), whether with or without the supply of goods:
    2. the provision of, or the use or enjoyment of facilities for, accommodation, amusement, the care of persons or animals or things, entertainment, instruction, parking, or recreation:
    3. the conferring of rights, benefits, or privileges for which remuneration is payable in the form of a royalty, tribute, levy, or similar exaction:
    4. to avoid doubt, the supply of electricity, gas, telecommunications, or water, or the removal of waste water:
  2. a contract of insurance, including life assurance and life reassurance:
  3. a contract for a financial advice product (within the meaning of section 6(1) of the Financial Markets Conduct Act 2013):
  4. any contract for, or in relation to, the lending of money or granting of credit, or the making of arrangements for the lending of money or granting of credit, or the buying or discounting of a credit instrument, or the acceptance of deposits, or other provision of financial accommodation; but
3. does not include rights or benefits in the form of the supply of goods or the performance of work under a contract of service
trade means any trade, business, industry, profession, activity of commerce, or undertaking relating to the supply or acquisition of goods or services or to the disposition or acquisition of any interest in land.

2Meaning of wholesale trust

A wholesale trust is an express trust (within the meaning of section 12) that has the following characteristics:
the trust is established in connection with or as a consequence of 1 or more of the following:
1. an offer of financial products exclusively to wholesale investors or persons who are controlled by, or who are otherwise associated persons of, those investors:
2. the lending of money to, or the borrowing of money from, wholesale investors or persons who are controlled by, or who are otherwise associated persons of, those investors:
3. the provision of a client money or property service exclusively to a wholesale client; and
every beneficiary is 1 or more of the following:
1. a wholesale investor (or person who is controlled by, or who is otherwise an associated person of a wholesale investor) or wholesale client:
2. a manager or an investment manager of the trust (or an associated person of that person):
3. an originator of any property of the trust (or an associated person of that beneficiary):
4. a person who is controlled by, or who is otherwise an associated person of, an investment business, a large entity, or a government agency:
5. an overseas person who is, or who undertakes a role that is, substantially similar to a person under any of paragraphs (i) to (iv):
6. the trustee of the trust:
7. a residual beneficiary.

In this clause,—
associated person has the meaning given to it in section 12 of the Financial Markets Conduct Act 2013
client money or property service has the same meaning as in section 6(1) of the Financial Markets Conduct Act 2013
controlled has the meaning given to it in clause 48 of Schedule 1 of the Financial Markets Conduct Act 2013
government agency has the meaning given to it in clause 40 of Schedule 1 of the Financial Markets Conduct Act 2013
investment business means an entity that is an investment business as defined in clause 37 of Schedule 1 of the Financial Markets Conduct Act 2013, and includes an equivalent overseas entity
large has the meaning given to it in clause 39 of Schedule 1 of the Financial Markets Conduct Act 2013, except that the relevant time for the purpose of applying that schedule under this clause must be treated as the following:
1. in relation to an offer of financial products referred to in subclause (1)(a)(i), the time immediately before financial products are issued or transferred to the person under the offer:
2. in relation to the lending or borrowing of money referred to in subclause (1)(a)(ii), the time immediately before the money is first transferred to the recipient:
3. in relation to the provision of a client money or property service referred to in subclause (1)(a)(iii), the time immediately before the trustee receives the wholesale client’s money or property in the trustee’s capacity as a provider of the service to the wholesale client
residual beneficiary means a beneficiary that is an entity that—
receives trust property only after any other claims on the trust property have been satisfied; and
at the time when the trust was created, operated for a charitable purpose or was otherwise for the benefit of the community

wholesale client has the same meaning as in section 6(1) of the Financial Markets Conduct Act 2013

wholesale investor has the meaning given to it in clause 3 of Schedule 1 of the Financial Markets Conduct Act 2013, but,—

for the purposes of this definition, large in that clause has the meaning given to it in this subclause; and
also includes an overseas person with characteristics that are substantially similar to a New Zealand wholesale investor such that, if the overseas person was a New Zealand incorporated entity, the overseas person would be a wholesale investor under clause 3 of Schedule 1 of the Financial Markets Conduct Act 2013.

3Meaning of security trust

A security trust is an express trust (within the meaning of section 12) if, as part of a financing arrangement, the trustee holds security over the assets of a debtor, guarantor, or another party to the arrangement (a borrower) for the benefit of 1 or more counterparties.
In this clause, financing arrangement—
means a loan facility agreement, an arrangement for borrowing money under a debt security, or another provision of financial accommodation—
1. in which each party to the agreement, arrangement, or accommodation, (other than the borrower) is a person who falls within clause 2(1)(b)(i) to (vi); or
2. that is offered under a regulated offer of debt securities (within the meaning of section 6 of the Financial Markets Conduct Act 2013) or offered under clause 19 of Schedule 1 of that Act; and
includes an arrangement that is in connection with, or contemplated by, an arrangement under paragraph (a).

4Certain provisions are or may be modified or excluded in relation to specified commercial trust

The following provisions do not apply to a specified commercial trust (whether created before or after the commencement of this clause):
section 39 (requiring paid adviser to ensure settlor aware of meaning and effect of any modification or exclusion of default duties):
section 43 (requiring paid adviser to ensure settlor aware of meaning and effect of any liability exclusion or indemnity clause).

The following provisions do not apply to a specified commercial trust that was created before, or that was created under terms agreed to and in effect before, the commencement of this clause:
sections 45 to 55:
sections 67 to 76:
sections 81 to 85:
sections 121 to 123:
sections 153 to 158.

The following provisions apply to a specified commercial trust (other than a trust referred to in subclause (2)) that was created after the commencement of this clause unless their application is modified or excluded by the terms of the trust:
sections 45 to 55:
sections 67 to 76:
sections 81 to 85:
sections 121 to 123:
sections 153 to 158.

Sections 40 to 42 apply to a specified commercial trust (whenever created) as if the references to gross negligence were omitted from those provisions.

5Application of this schedule to trusts under Financial Markets Conduct Act 2013

Nothing in this schedule limits the powers and provisions in the Financial Markets Conduct Act 2013 that relate to the application of this Act.