Most Read Contributor in New Zealand, September 2016
The regulations to support the Financial Markets Conduct
Act 2013 (FMCA) have now been signed off and were released
by the Ministry of Business, Innovation and Employment
The journey which brought us to this point began in
mid-2010 with the release of a discussion document which, at over
200 pages, was considered long at the time but is dwarfed by the
more than 700 pages of regulation to bring the FMCA into
We provide some comments on the transition to the new
Financial Markets Conduct Regulations 2014 contain most of the
detailed rules behind the FMCA but there are another eighteen sets
of regulations to support the new law and to allow other
legislation to work throughout the transition to the new
The table below shows, at a high level, how the transition
provisions (as modified by the final regulations) work for various
New "wholesale offers" (see clause 16 of Schedule 1
of the regulations)
Can be made under the old law up until 1 June
New "offers to the public" of equity, debt or managed
investment products using an investment statement and
Can be made under the old law up until 1 December 2015 (unless
a continuous debt or managed investment product issue, in which
case can be made up until 1 December 2016), unless the issuer
New "regulated offers" using a product disclosure
statement and register entry
Available from 1 December 2014
Transitioning existing products and schemes to new
governance and accountability regime
Transition can be any time between 1 December 2014 and 1
December 2016, provided at least 20 working days' notice is
given to the Registrar of Financial Service Providers and the
On transition, issuers will need to comply with ongoing disclosure
requirements, governance requirements and financial reporting
New superannuation and KiwiSaver schemes
From 1 December 2014 (with no transition period)
While issuers can transition their existing financial products
and schemes to be governed by FMCA, rather than the old law, we do
not expect there will be a rush to do so.
Continuous issuers of debt securities and managed investment
schemes will need to consider carefully whether they will be able
to meet the new governance and accountability requirements before
giving notice to transition to the new law.
Given the significantly improved liability regime, we expect
most public issuers of equity securities or new tranches of debt
securities will proceed under the new law soon after 1 December
2014, rather than rely on the transition.
The information in this article is for informative purposes
only and should not be relied on as legal advice. Please contact
Chapman Tripp for advice tailored to your situation.
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