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  3. Consultation paper: Short duration derivatives

Consultation paper: Short duration derivatives

Page last updated: 28 Sep 2017

First published 3 April 2017


Final date for submissions


5pm Friday 28 April 2017

(this consultation has concluded) 

Consultation document Short duration derivatives
Submission form

Feedback form

E-mail for submission consultation@fma.govt.nz (please use the title of the consultation paper for the subject line)
Resulting documents

Designation notice

Summary of submissions report

We are seeking feedback on whether we should confirm that deliverable spot FX contracts (those settled within three working days) are not derivatives for the purposes of the FMC Act, through a proposed class designation under section 562(1)(c) of that Act.

Due to concerns about the potential harm short-duration derivative products pose for investors, we have reviewed how we regulate these products. As a result of this review, we decided that short-duration derivative issuers should be licensed. This decision is based on our view that the law requires businesses selling these products to have a licence.

We are concerned that an unintended consequence of this may be that spot contracts with a delayed settlement are caught by the definition of “derivative” in section 8 of the FMC Act. We don’t believe that ordinary spot FX contracts were intended to be regulated as derivatives.

Submissions closed on Friday 28 April 2017.

If you have questions, please contact us at questions@fma.govt.nz