Financial Markets Conduct (PPS Mutual Limited) Exemption Notice 2025

The Financial Markets Conduct (PPS Mutual Limited) Exemption Notice 2025 (Notice) exempts PPS Mutual Limited (PPS Mutual) from Parts 3 and 4 of the Financial Markets Conduct Act 2013 (Act) in respect of any offer of an interest in the Profit Share Benefit to a member.

The exemption is subject to a number of conditions.  These include ensuring that:

• PPS Mutual holds a licence to carry on insurance business in New Zealand under the Insurance (Prudential Supervision) Act 2010 (IPSA) and that licence permits PPS Mutual to issue the Profit Share Benefit;
• PPS Mutual holds a licence under the Act that covers the market service of acting as a financial institution;
• no member is required or permitted to contribute money (or money’s worth) as consideration for receiving an interest in the Profit Share Benefit (other than by way of paying premiums under a life insurance policy offered by PPS Mutual under the name “Professionals’ Choice Policy” or any similar life insurance policy issued by PPS Mutual (Professionals’ Choice Policy)); and
• PPS Mutual provides tailored disclosure to members in relation to the Profit Share Benefit.

The key reasons for granting the exemption as set out in the Statement of Reasons in the Notice are:

• the Profit Share Benefit is a contract of insurance and is appropriately regulated by the Reserve Bank of New Zealand under IPSA. To impose the managed investment scheme requirements of the Act would create duplication, be overly complex and impose unnecessary compliance costs.
• PPS Mutual will remain subject to the conduct of financial institutions regime and the application of the fair conduct principle, which includes the requirement to treat consumers fairly and will provide an additional conduct overlay to the requirements of IPSA;
• members cannot contribute additional funds to the Profit Share Benefit (above premiums paid to PPS Mutual under a Professionals’ Choice Policy). Instead, the purpose of the Profit Share Benefit is to return a share of excess capital to members, meaning the usual requirements of the managed investment scheme regime are less relevant; and
• members of PPS Mutual will receive timely, accurate and understandable information from PPS Mutual in relation to the Profit Share Benefit, in accordance with the conditions to the exemption. This information, together with the relevant insurance policy document for the Profit Share Benefit, will provide more useful information for members.

Download Financial Markets Conduct (PPS Mutual Limited) Exemption Notice 2025 [PDF 266KB]