“2A Purposes of this Act

• The purposes of this Act are—

  • “(a) to promote the confident and informed participation of businesses, investors, and consumers in the financial markets; and

  • “(b) to promote and facilitate the development of fair, efficient, and transparent financial markets.”

“creditor has the same meaning as in section 5 of the Credit Contracts and Consumer Finance Act 2003

“FMA means the Financial Markets Authority established under Part 2 of the Financial Markets Authority Act 2011

“levy means a levy prescribed by regulations made under section 68 of the Financial Markets Authority Act 2011”.

• “(1) A person to whom this Act applies must not be in the business of providing a financial service unless that person—

  • “(a) is registered for that service under this Part; and

  • “(b) is, if required by section 48, a member of an approved dispute resolution scheme.”

• “(1) A person to whom this Act applies must not—

  • “(a) hold out that the person is registered under this Act unless that person—

    • “(i) is registered under this Part; and

    • “(ii) is, if required by section 48, a member of an approved dispute resolution scheme; or

  • “(b) hold out that the person is registered in respect of a particular service or entitled, qualified, able, or willing to be in the business of providing a financial service unless that person—

    • “(i) is registered for that service under this Part; and

    • “(ii) is, if required by section 48, a member of an approved dispute resolution scheme.”

• “(ea) a person who has been convicted within the past 5 years, in a country other than New Zealand, of an offence that is substantially similar to an offence specified in paragraph (e):”.

“15A Purpose of FMA's powers relating to registration

• The purpose of section 15B is to prevent a person (A) from being registered as a financial service provider if such registration has, will have, or is likely to have the effect of—

  • “(a) creating, or causing the creation of, a false or misleading appearance with respect to the extent to which A—

    • “(i) provides, or will provide, financial services in New Zealand; or

    • “(ii) provides, or will provide, financial services from a place of business in New Zealand; or

    • “(iii) is, or will be, regulated by New Zealand law in relation to a financial service; or

  • “(b) otherwise damaging the integrity or reputation of—

    • “(i) New Zealand's financial markets; or

    • “(ii) New Zealand's law or regulatory arrangements for regulating those markets.

“15B FMA may prevent registration of financial service provider

• “(1) On receipt of an application under section 15, the Registrar may, if the Registrar considers it necessary or desirable after having regard to section 15A, refer the application to the FMA and the FMA may, but is not required to, consider the application.

  “(2) If the FMA decides to consider the application, the FMA must, after taking into account section 15A, consider whether preventing the applicant from being registered under section 16(1) is necessary or desirable.

  “(3) If, in the FMA's view, the applicant should be prevented from being registered under section 16(1), the FMA must—

  • “(a) comply with subsection (4); and

  • “(b) if, having considered any submission received under subsection (4), the FMA remains of the view that the applicant should be prevented from being registered, direct the Registrar to reject the application in accordance with section 16(2); and

  • “(c) give its reasons for that direction.

  “(4) Before giving a direction under subsection (3)(b), the FMA must—

  • “(a) give the applicant—

    • “(i) written notice of its intention to give the direction; and

    • “(ii) the reasons why it intends to give that direction; and

    • “(iii) a date (being not less than 10 working days after the date of the notice referred to in subparagraph (i)) by which the applicant may make written submissions to the FMA in relation to its proposed direction; and

  • “(b) consider any submissions received in accordance with paragraph (a)(iii).

  “(5) The Registrar must comply with a direction given under subsection (3)(b).

  “(6) A provider who is not satisfied with a direction given under this section may appeal to the High Court under section 42.

“15C FMA may prevent registration regardless of whether applicant is otherwise qualified to be registered

• The FMA may give a direction under section 15B in relation to an applicant regardless of whether the applicant is qualified for registration under section 13.”

• “(aa) notify the provider of the Registrar's decision; and

• “(ab) require the provider to notify the Registrar, within 10 working days from receiving notification under paragraph (aa), of the name and business address of, and of the provider's membership number in, the approved dispute resolution scheme of which the provider is a member (if the provider is required, by section 48, to be a member of a scheme); and”.

• “(3) Subsection (1) does not apply if the FMA has directed the Registrar to reject the application.”

• “(iii) the provider knows that any details on the register are no longer accurate, including information relating to the provider's membership of an approved dispute resolution scheme:”.

• “(c) the person responsible for an approved dispute resolution scheme of which a financial service provider was a member, if the person knows that the provider is no longer a member of that scheme, in which case the person responsible must also notify the Registrar of the following matters:

  • “(i) whether that provider’s membership was terminated under section 63(1)(ba); and

  • “(ii) whether any remedial action imposed on that provider by the scheme has not been carried out; and

  • “(iii) whether there is any unresolved complaint about that provider.”

• “(1A) To avoid doubt, the notification obligations in subsection (1)(c) apply in relation to an approved dispute resolution scheme or a reserve scheme that has been discontinued (whether as a result of approval being withdrawn or for any other reason).”

• “(aa) has failed to notify the Registrar of the name, business address, and membership number, as required by section 16(1)(ab); or”.

• “(1A) The Registrar may, if the Registrar considers it necessary or desirable after taking into account section 18A, refer consideration of whether a financial service provider should be deregistered to the FMA for the FMA's direction.

• “(1B) The Registrar must deregister a financial service provider if the FMA gives a direction under section 18B(3)(c)(i).”

“18A Purpose of FMA's powers relating to deregistration

• The purpose of section 18B is to provide for the deregistration of a person (A) if A's registration has, will have, or is likely to have the effect of—

  • “(a) creating, or causing the creation of, a false or misleading appearance with respect to the extent to which A—

    • “(i) provides, or will provide, financial services in New Zealand; or

    • “(ii) provides, or will provide, financial services from a place of business in New Zealand; or

    • “(iii) is, or will be, regulated by New Zealand law in relation to a financial service; or

  • “(b) otherwise damaging the integrity or reputation of—

    • “(i) New Zealand's financial markets; or

    • “(ii) New Zealand's law or regulatory arrangements for regulating those markets.

“18B Consideration of deregistration of financial service provider by FMA

• “(1) The FMA—

  • “(a) may, but is not required to, consider a referral under section 18(1A); and

  • “(b) may otherwise consider giving a direction under this section at its own discretion (if a referral has not been made).

  “(2) If the FMA decides to consider the referral or otherwise decides to consider giving a direction under this section, the FMA must, after taking into account section 18A, consider whether it is necessary or desirable for a financial service provider to be deregistered.

  “(3) If, after acting under subsection (2), the FMA decides to give a direction to the Registrar under this section to deregister the financial service provider, the FMA must—

  • “(a) give the financial service provider—

    • “(i) written notice of its intention to give the direction; and

    • “(ii) the reasons why it intends to give the direction; and

    • “(iii) a date (being not less than 20 working days after the date of the notice referred to in subparagraph (i)) by which the applicant may make written submissions to the FMA in relation to its proposed direction; and

  • “(b) consider any submissions received in accordance with paragraph (a)(iii); and

  • “(c) either,—

    • “(i) if the FMA remains of the view that the financial service provider should be deregistered, direct the Registrar to deregister the provider; or

    • “(ii) if the FMA decides that the provider should not be deregistered, advise the Registrar accordingly; and

  • “(d) give its reasons for the direction or advice, as the case may be.

  “(4) A provider who is not satisfied with a direction given under this section may appeal to the High Court under section 42.

  “(5) Sections 19 and 20 do not apply if a financial service provider is deregistered as a result of a direction given under subsection (3)(c)(i).

“18C FMA may direct deregistration regardless of whether section 18(1) applies

• The FMA may give a direction under section 18B in relation to a person regardless of whether any of paragraphs (a) to (d) of section 18(1) apply.”

• “(2) In addition to the information referred to in subsection (1), the Registrar may, if the Registrar thinks it is appropriate, insert a note of warning in the register in relation to a registered person if—

  • “(a) a request for information has been made by the Registrar under this Act in relation to that person; or

  • “(b) the Registrar or the FMA is considering any matters relating to the deregistration of that person under this Act.

• “(3) The Registrar must remove a note of warning inserted under subsection (2) if the Registrar is satisfied that the reasons for inserting it no longer apply.”

• “(d) the Commerce Commission:”.

• “(ca) is ordinarily resident in New Zealand; or

• “(cb) has a place of business in New Zealand; or

• “(cc) is in the business of providing a financial service; or”.

• “(aa) ascertaining whether information provided to the Registrar is correct:

• “(ab) requiring a person, in relation to information provided to the Registrar, to—

  • “(i) confirm that the information is correct; or

  • “(ii) correct the information:

• “(ac) specifying—

  • “(i) a particular form in which the confirmation or correction referred to in paragraph (ab) must be provided; and

  • “(ii) a date by which the confirmation or correction must be provided; and

  • “(iii) whether the confirmation or correction must be verified by the production of original documents or certified copies of original documents or by a statutory declaration:”.

• “(ca) is ordinarily resident in New Zealand; or

• “(cb) has a place of business in New Zealand; or

• “(cc) is in the business of providing a financial service; or”.

• “(1A) A financial service provider who is not satisfied with any direction given by the FMA under section 15B or 18B may appeal to the High Court.”

• “(c) refer the decision or direction back to the Registrar or the FMA (as the case may be) with directions to reconsider the whole or a specified part of the decision or direction.”

• “(2) If an interim dispute resolution scheme is appointed under section 79AA, references in this Act to an approved dispute resolution scheme are to be read as including references to the interim dispute resolution scheme.

• “(3) However, nothing in sections 51 to 61 applies in relation to the interim dispute resolution scheme.”

• “(da) whether the scheme will accept all types of financial service providers as members and, if not, whether there are other approved dispute resolution schemes that cover all types of financial service providers:”.

• “(ba) the rules about the scheme do not, or no longer, comply with the requirements of section 63:”.

• “(3A) However, despite subsection (3), the Minister is not required to withdraw approval unless the person responsible for the scheme has, at the time of the request,—

  • “(a) given the Minister—

    • “(i) 3 months' notice of the date on which the proposed withdrawal of approval is to take place; or

    • “(ii) any lesser notice period agreed to by the Minister; and

  • “(b) informed the Minister of adequate arrangements that it has made, or will make, to facilitate the transfer of members of the existing scheme to another approved dispute resolution scheme or schemes.”

• “(4) The Minister's notice may also require the person responsible for the scheme to do 1 or more of the following:

  • “(a) notify members of the scheme of adequate arrangements that have been, or will be, made to facilitate the transfer of members of the scheme to another approved dispute resolution scheme or schemes:

  • “(b) make clear to those members that those members may—

    • “(i) apply to join another approved dispute resolution scheme or schemes in accordance with those arrangements; or

    • “(ii) apply to join any other approved dispute resolution scheme:

  • “(c) remind each of its members of the member's obligation—

    • “(i) to continue to be a member of an approved dispute resolution scheme, as required by section 48; and

    • “(ii) to notify the Registrar that the member has transferred to another approved dispute resolution scheme, and details of that scheme, as required by section 17.”

“61 Effect of withdrawal of approval on members of dispute resolution scheme

• When a dispute resolution scheme's approval is withdrawn, each member of the scheme—

  • “(a) ceases to be a member of that scheme; and

  • “(b) must ensure that—

    • “(i) the member's obligations under section 17 are complied with; and

    • “(ii) the member continues to comply with section 48.”

• “(aa) that the types of financial service providers referred to in paragraph (a) must be accepted as members of the scheme, unless—

  • “(i) refused membership for a reason set out in paragraph (ba); or

  • “(ii) a provider is not eligible for registration under this Act:”.

• “(ba) that membership may be refused or terminated because of an applicant's, or a member's,—

  • “(i) material or persistent breach of a scheme's rules:

  • “(ii) failure to take remedial action imposed on that provider by a scheme (whether or not that scheme still exists):

  • “(iii) failure to pay a scheme's membership fee:

  • “(iv) failure to continue to be a type of financial service provider that may be a member of the scheme:”.

• “(g)  that the scheme has jurisdiction in respect of—

  • “(i) a breach of contract, a statutory obligation, or an industry code; and

  • “(ii) any other prescribed matters; and

  • “(iii) any other matter provided for in the rules:”.

• “(s) any other prescribed matters.”

• “(2) The compensation referred to in subsection (1)(i) that the scheme can impose on a member must be able to include, in the case of a complaint relating to a repossession under Part 3A of the Credit Contracts and Consumer Finance Act 2003, compensation for non-financial loss, stress, humiliation, and inconvenience up to a certain amount stated in the rules.

• “(3) The rules about an approved dispute resolution scheme must be treated as containing any provision that is implied into those rules by regulations made under this Act.

• “(4) A rule about an approved dispute resolution scheme has no effect to the extent that it is inconsistent with any provision implied into the rules by those regulations.”

• “(3) The Minister must comply with subsection (1) within 45 working days of the notification of the change of rules unless the Minister, within those 45 working days,—

  • “(a) requests further information from the person responsible for the scheme (in which case, the Minister must comply with subsection (1) within 45 working days after receipt of that further information); or

  • “(b) advises the person responsible for the scheme that a period of more than 45 working days is required to consider the change (in which case, the Minister must specify the time within which he or she will comply with subsection (1)).”

• “(ca) if there is a series of material complaints about a particular creditor under a consumer credit contract or class of such creditors, communicate that fact to the Commerce Commission:”.

• “(2) In subsection (1)(ca), consumer credit contract—

  • “(a) has the same meaning as in section 11 of the Credit Contracts and Consumer Finance Act 2003; and

  • “(b) includes a credit contract to which Part 3A of that Act applies.”

• “(a) must ensure that the names of approved dispute resolution schemes and the name and business address of the person responsible for each scheme are available for inspection by the public, free of charge, at the head office of the Ministry (during ordinary office hours), and on an Internet site that is publicly available (at all reasonable times):”.

• “(aa) providing rules for an interim dispute resolution scheme:”.

• “(ca) prescribing matters for the purposes of section 63(1)(g)(ii) and (s):

• “(cb) prescribing provisions to be implied into rules about approved dispute resolution schemes:”.

• “(1B) The Minister must not recommend the making of regulations under subsection (1)(aa) unless the Minister—

  • “(a) is satisfied that—

    • “(i) members of a scheme that has ceased, or will cease, to be an approved dispute resolution scheme would be, or are, unable to reasonably become members of another approved dispute resolution scheme; and

    • “(ii) the interim dispute resolution scheme will be consistent with the purpose of this Part (see section 47); and

    • “(iii) the interim dispute resolution scheme will be capable of providing a scheme for the purpose of this Part; and

    • “(iv) the rules of the interim dispute resolution scheme will comply with section 63; and

  • “(b) has consulted the FMA and any other persons that the Minister considers are likely to be substantially affected by the establishment of an interim dispute resolution scheme.

• “(1C) The Minister must not recommend the making of regulations under subsection (1)(ca) or (cb) unless the Minister has consulted the FMA and any other persons that the Minister considers are likely to be substantially affected by the regulations.

• “(1D) However, a failure to consult with the persons referred to in subsection (1B)(b) or (1C) does not affect the validity of the regulations.”

“79AA Appointment of interim dispute resolution scheme

• “(1) The Governor-General may, by Order in Council made on the recommendation of the Minister,—

  • “(a) appoint a dispute resolution scheme to fulfil the functions of the interim dispute resolution scheme (with or without conditions) for a term recommended by the Minister:

  • “(b) revoke an appointment made under paragraph (a).

  “(2) The Minister may recommend an Order in Council for the purpose described in subsection (1)(a) only after complying with section 79(1B).

  “(3) The Minister may recommend an Order in Council for the purpose described in subsection (1)(b) if the Minister is satisfied that the scheme is no longer required.”