1. Compliance
  2. Derivatives issuers
  3. Your ongoing obligations
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Derivatives Issuers

Page last updated: 21 Feb 2019

Your obligations

Licensees have a number of obligations, in addition to the minimum standards and standard conditions set out in their licence.

These obligations include notifying the FMA of certain events and providing us with information.  For example, you must notify us  when a new director or senior manager is appointed by completing a declaration form.

All notifications should be emailed to us at compliance@fma.govt.nz, noting the relevant obligation in the subject line of your email. 

Financial reporting obligations 

As a licensee, you fall within the definition of a ‘FMC reporting entity’ and are required to comply with specific financial reporting obligations. For most derivatives issuers, the obligations will apply to any balance dates on or after 31 March 2015.  You will be considered to have higher public accountability than other FMC reporting entities and in summary, you will be required to:

  • keep proper accounting records to support the preparation of compliant financial statements. Records must be kept in English and a copy must be kept in New Zealand
  • prepare financial statements in respect of your or your group's operations. Those financial statements will need to comply with New Zealand equivalents to International Financial Reporting Standards (NZ IFRS)
  • have your financial statements audited by an auditor or audit firm that is licensed/registered in New Zealand
  • lodge your financial statements and the audit report on them with the Companies Office within four months after your balance date.

See our financial reporting section for more information and answers to frequently asked questions.

PDS requirements

Licensed derivatives issuers are required to comply with the Product Disclosure Statement (PDS) requirements if they are planning to make a regulated offer under the FMC Act.

We offer a pre-registration review service to help issuers, and their directors, feel more confident their offer documents are likely to satisfy the FMA’s expectations. See our pre-registration review section for more information including our guidance note Effective disclosure.

Derivatives investor money and property 

Licensed derivatives issuers are required to comply with the new requirements for the handling of derivatives investor money and derivatives investor property by derivatives issuers. These include:

  • holding derivatives investor money on trust for the investor
  • ensuring that derivatives investor money is paid promptly into a specified bank to a trust account
  • derivatives investor money must be held separate from money held by or for the issuer or offeror on its own account
  • at least daily, reconciling the derivatives issuer’s records of the amount of derivatives investor money with the amount of money in the trust account
  • derivatives investor money and derivatives investor property must not be used to satisfy any liability of a derivatives issuer
  • keeping and maintain up to date records of derivatives investor money and derivatives investor property held for each investor
  • obtaining an assurance report, within 4 months after the issuer’s balance date, that states whether, in the auditor’s opinion, the derivatives issuer’s processes, procedures and controls were suitably designed and operated effectively during the accounting period.

The regulations can be found on the government’s legislation website: www.legislation.govt.nz


Licensees are subject to supervision by us. We take a risk-based approach to monitoring, meaning the extent of supervision varies depending upon our priorities and the nature of your business.  It can range from a full onsite inspection through to information requests and desk-based reviews. As a minimum, we will seek assurance you are complying with the basics, ie: 

  • you are meeting the minimum standards for licensing
  • you are complying with the conditions attached to your licence. 

We will also assess your conduct generally as a licence holder and check you are complying with key legislation such as the Financial Advisers Act 2008, the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 and the fair dealing provisions within the FMC Act.

One of the big shifts for the FMA under the FMC Act is the use of preventative regulation, which aims to identify and anticipate potential causes of harm to New Zealand’s financial markets and investors. Find out more about the seven priority areas of potential harm in our Strategic Risk Outlook.

A key part of our supervision is self-reporting by licensees. If we can see that you can identify and resolve problems it gives us confidence. If you have any significant issues, we encourage you to tell us about them and what you are doing to remedy them.

If you need to contact us at any time during the term of your licence you should email compliance@fma.govt.nz

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