Confirmation of Financial Products
83 Section 211 requires the issuer of a regulated
product to send to the product holder within one month of issue a
product or confirmation document that properly describes the
nature, terms and conditions of the product and the name of the
product holder.
84 Almost all derivative transactions are already evidenced by a standard confirmation document. However the document countenanced by the Bill is quite different in terms of the information it would carry. To require this new documentation will impose significant extra cost.
85 We submit that derivatives should be excluded from section 211 provided that the product holder has been sent a copy of the underlying master derivative contract (e.g. an ISDA Master Agreement) and a copy of the standard derivative confirmation setting out the relevant terms of the individual transaction.
Licensed markets
86 Clause 307, appropriately, excludes from
licensing requirements any facility provided by an issuer for
matching buyers and sellers of financial products issued by that
issuer. This is a welcome exclusion, as it is not uncommon for
non-listed entities to wish to provide such facilities. It would,
however, be useful for this to be extended to subsidiaries which
provide such facilities for products issued by their parents, and
vice versa.
87 We accordingly submit that clause 307(2)(b) read "a company matching persons who wish to acquire financial products issued by that company or a related company (which is part of the same wholly-owned group as the company providing the facility) with persons who wish to dispose of financial products of that company or related company (whether at a specified price or otherwise)".
Related Topics
- Financial Market Conduct Bill - Part 1 – Preliminary Provisions
- Financial Markets Conduct Bill - Part 2 - Misleading or deceptive conduct or false or misleading representations
- Financial Markets Conduct Bill - Part 3 – Disclosure of offers of financial products
- Financial Markets Conduct Bill - Part 4 – Governance of financial products
- Financial Markets Conduct Bill - Part 6 – Licensing and other regulation of market services
- Financial Markets Conduct Bill - Part 7 – Enforcement, liability and appeals
- Financial Markets Conduct Bill - Part 9 – Repeals, amendments, and transitional provisions
>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.