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  5. Financial Markets Conduct (UBT Invest NZ Funds) Exemption Notice 2020

Financial Markets Conduct (UBT Invest NZ Funds) Exemption Notice 2020

Page last updated: 27 Mar 2020
Name of noticeFinancial Markets Conduct (UBT Invest NZ Funds) Exemption Notice 2020
Gazette Notification Date2020-03-26
Date In Force2020-04-01
LI NumberN/A
ActFinancial Markets Conduct Act 2013
TypeIndividual Exemption Notice
Expiry Date2025-03-31

Summary:  This notice exempts Implemented Investment Solutions Limited (IIS) in respect of the UBT Invest NZ Retail Fund (Fund). Download the notice PDF. In respect of the UBT Invest NZ Retail Fund, IIS is exempted from clauses 53(1)(c)(viii), 53(1)(j)(i), 54(1)(a)(i) and (d) and 70(1)(a)(i) of Schedule 4 of the Financial Markets Conduct Regulations 2014:

Under those provisions IIS would be required to provide the following information:

  • a list of the 10 highest-value individual assets of the Fund and certain information against that list, including the name of the individual asset, in both the register entry for the offer and each quarterly fund update:
  • a complete list of the individual assets of the Fund and certain information against that list, including the name of the asset, in the register entry for the offer. This information must also be updated within 40 working days after 31 March and 30 September in each year.

For assets such as loans the name of the individual asset would need to reference the name of the borrower under that loan.  The primary assets of the Fund are intended to be commercial loans made to closely held entities.  As such, the individuals who own those entities may be readily identifiable.  So by naming a borrower the Manager may be indirectly identifying individuals.  Further, the Fund is targeted at investors and entities owned by people who are all members of a particular faith-based community.  As such, the ownership of borrowers might be known to investors by virtue of them all being part of that same broader faith-based community.     This notice exempts IIS, in respect of the Fund, from the requirement to provide the name of the borrower subject to the conditions set in clause 6 and 7 in the notice.  The conditions require IIS to provide alternative information with respect to loans made by IIS.  In summary the manager is required to provide the following information:

  • The term and security asset for the loan;
  • Information about the Fund's composition i.e. according to various security asset types and by loan term;
  • How many loans have been advanced by the Fund and the 10 largest loans as a percentage of the value of the Fund;
  • Risk rating information for each of the loans in the Fund, and a breakdown of the percentage of loans according to each risk rating;

While this notice exempts IIS from providing the name of the borrower, there is no exemption from the requirement to disclose all material information. IIS must still disclose any circumstances relating to a borrower that is material (eg, the borrower is a discharged bankrupt).