Amendments to the Financial Markets Conduct Regulations 2014 (regulations) will soon be in place. The regulations affect the application of the Financial Markets Conduct Act 2013 (Act).
The majority of the regulations come into force on 30 June 2016. However, regulation 9(1), (5), and (6) come into force on 1 December 2016. Regulations 6 and 7 come into force on 1 December 2017.
The effect of Regulation 5 will be to bar the application of s 176 of the Act in certain circumstances. Section 176 will not apply to investments in an unregistered scheme used as a vehicle for investment and reporting by registered schemes. In this way, restricted schemes can have the benefit of a professionally run unregistered scheme but still protect their investors in relation to in-house asset investments (see also discussion of Regulations 6 and 7 below). That protection should involve satisfying oneself that the unregistered scheme has arrangements ensuring that it carries out its powers and duties professionally.
The effect of Regulations 6 and 7 will be to impose a requirement for restricted schemes to satisfy an altered in-house assets ratio rule. This requirement will not be in effect until 1 December 2017.
Regulation 8 will amend schedule 1 to allow superannuation schemes for which no offers to the public have been made, to “opt in” and become registered schemes.
Regulation 9 will widen the scope of the requirements for PIE call fund units, PIE term fund units, and bank notice products, to apply them also to managed investment products issued by a registered bank. It also effects minor changes to the wording of statements required under Schedule 8 in relation to investor certificates and safe harbour certificates, to bring them into line with other statements required under Schedule 8.