Financial Markets Conduct (Tradition Kiwi Brokers Limited) Exemption Notice 2025

The Financial Markets Conduct (Tradition Kiwi Brokers Limited) Exemption Notice 2025 exempts Tradition Kiwi Brokers Limited (Tradition) from the requirement under section 310 of the Financial Markets Conduct Act 2013 (Act) to hold a licence to operate a financial product market in New Zealand, subject to conditions. 

The key reasons for granting the exemption are:

• Tradition’s financial product market is simple in its format, the type of products that can be traded are limited, and the conditions of the exemption ensure that all participants in the Tradition financial product market are wholesale investors.

Accordingly, the following purposes can be substantially achieved without Tradition being subject to licensing requirements:

• • promoting informed participation of businesses, investors and consumers in the financial markets; and 
  • promoting and facilitating the development of fair, efficient, and transparent financial markets; and 
  • the additional purposes of providing timely, accurate and understandable information to persons to assist those persons to make decisions relating to financial products or the provision of financial services:
• the exemption is subject to conditions that Tradition must not hold client money or property or operate any clearing and settlement facility in relation to Tradition’s financial product market and must not trade on its own behalf, or on the behalf of others, on Tradition’s financial product market. As such, it is not necessary to impose requirements in relation to those matters to achieve the purpose of the Act relating to governance arrangements and the management of governance risks:
• given the statutory purposes described above can be substantially met without Tradition being subject to licensing requirements, it is desirable to grant the exemption in order to promote the further statutory purpose of avoiding unnecessary compliance costs:
• granting the exemption promotes innovation and flexibility in the financial markets, by allowing specialised interdealer broking services to operate with appropriate regulatory settings.

Furthermore, taking into consideration:

• the matters set out in section 308 of the Act regarding the nature of the activities conducted, the size of the market, the nature of the financial products dealt with, the participants, and the technology used; and
• the purpose set out in section 229 of the Act to encourage a diversity of financial product markets that take account of the differing needs and objectives of issuers and investors,

the obligations arising out of the operation of subparts 7 and 8 of Part 5 of the Act would be out of proportion to any benefits licensing Tradition may bring. From a regulatory perspective, the needs and objectives of the particular investors in relation to the particular products appear to be largely met by existing arrangements. Also, to subject the issuers whose products are traded on Tradition’s financial product market to listing rules and requirements would impose significant costs on both Tradition and the issuers disproportionate to any benefit.

The exemption is subject to conditions limiting the infrastructure of the facility, the nature of participants, the capacity in which they are participating, and the range of products traded on Tradition’s financial product market. As such, the FMA considers the exemption is not broader than reasonably necessary to address the matters that gave rise to the exemption.

Download Financial Markets Conduct (Tradition Kiwi Brokers Limited) Exemption Notice 2025 [PDF 348KB]