The Financial Markets Conduct Act 2013 (FMC Act) sets out minimum compliance standards of behaviour for people operating in the financial markets.
It provides for fair dealing in relation to financial products and services by prohibiting:
misleading or deceptive conduct
false or misleading representations
offers of financial products in the course of unsolicited meetings.
The fair dealing provisions of the FMC Act apply to all members of the public (regardless of whether they're a retail or wholesale customer) and are based on equivalent provisions in the Fair Trading Act 1986 (FTA).
What financial products and services are covered?
The range of financial products and services covered is defined in the FMC Act and is very broad.
Financial products consist of the four categories of investment introduced by the FMC Act:
managed investment product
Financial services are defined by reference to Section 5 of the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (FSP Act).
Providing credit under a credit contract is not defined as a financial service for these purposes.
Who do I contact if I have a fair dealing complaint?
We are the primary regulator of:
misleading or deceptive conduct and false or misleading representations in relation to financial products and services (other than credit contracts)
of unsubstantiated representations in relation to financial products and services (other than credit contracts)
offers of financial products in the course of unsolicited meetings
Therefore, please contact us if you would like to make a complaint if it relates to one of the above.
IMPORTANT: New Zealand laws have changed. If your complaint is about misleading or deceptive conduct that occurred BEFORE 1 April 2014, please contact the Commerce Commission.
If your complaint is about misleading or deceptive conduct for financial products or services that occurred AFTER 1 April 2014, please contact us.
How do the FMA and the Commerce Commission work together?
The FMA and the Commerce Commission have a Memorandum of Understanding that describes how we will work together to regulate fair dealing across financial products and services.
Only we can bring proceedings arising from unsubstantiated representations relating to financial products or financial services (other than credit contracts) and offers in the course of unsolicited meetings.
Credit contracts will continue to be regulated by the Commerce Commission. The Commission will also investigate breaches of the FTA in respect of financial products and services (other than credit contracts) and, with our consent, take enforcement action.
Does this apply to advertisements of offers under the Securities Act 1978?
The fair dealing provisions apply to prospectuses, investment statements and other advertisements relating to offers made under the Securities Act 1978 (other than in relation to civil liability for untrue statements, or criminal liability for misstatements). For more information see the transitional provisions in Schedule 4 of the FMC Act.
The unsubstantiated representations prohibitions will not apply to prospectuses and investment statements, but will apply to representations you make in other advertisements.