Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698837240177.pdf (New Zealand)
2010/250 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 Anand Satyanand, Governor-General Order in Council At Wellington this 23rd day of August 2010 Present: His Excellency the Governor-General in Council Pursuant to section 72(1)(b) and (2) of the Financial Service Providers (Registration and Dispute Resolution) Act 2008, His Excellency the Governor-General, acting on the advice and with the consent of the Executive Council and on the recommendation of the Minister of Consumer Affairs made after consultation with the Minister of Finance, the Minister of Commerce, and persons (or their representatives) that the Minister of Consumer Affairs considered were likely to be substantially affected by the recommendation, makes the following rules.
Contents 1 2 3 Title Commencement Interpretation Page 4 4 4 1 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 2010/250 Part 1 Core features of reserve scheme Purpose of reserve scheme Functions of reserve scheme Part 2 Jurisdiction of reserve scheme What sort of complaints are covered Who may complain Complaint must be made to member first (and referred to reserve scheme within time limit) Compensation claimed must not be more than $200,000 Complaint must not relate to member’s general policies and practices or commercial judgements or investment performance What other complaints are not covered by reserve scheme Additional discretions relating to jurisdiction of reserve scheme Process for determining complaint not covered by reserve scheme Part 3 Complaints resolution process Making complaints to reserve scheme How to complain What reserve scheme must do on receipt of complaint General approach and methods for resolving complaints General approach to resolving complaints How complaints may be resolved Provisions on information supplied in, and conduct of, complaints resolution process Reserve scheme may receive information and make inquiries Reserve scheme must operate on without prejudice basis Obligation of parties to supply information requested to resolve complaints Reserve scheme must keep parties informed Representation of parties Final decisions on complaints When reserve scheme may proceed to make final decision on complaint 16
2010/250 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 Process for making and accepting final decisions Basis for final decisions under reserve scheme What kinds of remedies are possible under final decision No appeal against final decision of reserve scheme End of complaints resolution process What constitutes binding resolution of complaint
 When complaint process ceases if no binding resolution Other matters relating to consideration of complaint Confidentiality obligations for reserve scheme When parties may bring alternative court action Part 4 Structure and miscellaneous powers of reserve scheme Power to delegate other functions or powers Powers of delegate Appointing scheme adjudicator Functions of scheme adjudicator Appointing persons to provide mediation services Independence of scheme personnel Particular requirements for independence of scheme adjudicator Reserve scheme may extend complaint time frames Reserve scheme responsible for actions of personnel Part 5 Membership of reserve scheme Who is eligible to be member of reserve scheme Applications for membership Automatic conferral of membership Duties on members to have own complaints resolution procedures How to terminate membership voluntarily How membership may be terminated compulsorily Part 6 Reporting by, and accountability of, reserve scheme Accessibility requirements How reserve scheme must ensure its accessibility Reserve scheme may disseminate information Monitoring and reporting by reserve scheme What monitoring reserve scheme must carry out 16 17 18 18 18 18 19 19 20 20 21 21 22 22 22 22 22 23 23 24 24 25 25 26 27 27 3 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 2010/250 What reserve scheme must do about systemic issues What reserve scheme must do about serious misconduct Monitoring of reserve scheme Notification of advisory body What must happen to complaints about reserve scheme Annual report by reserve scheme Independent review of reserve scheme 28 28 28 29 29 30 Rules Title These rules are the Financial Service Providers (Dispute Reso- lution—Reserve Scheme) Rules 2010.
Commencement These rules come into force on 30 August 2010.
Interpretation In these rules, unless the context otherwise requires,— Act means the Financial Service Providers (Registration and Dispute Resolution) Act 2008 advisory body means the persons notified to the reserve scheme, under rule 52, as constituting the advisory body complaints body means an approved dispute resolution scheme or any other person or body to which formal com- plaints may be made that— (a) (b) is established or approved under legislation; or has terms of reference or a constitutive document that states that the complaints resolution scheme is estab- lished or operated in accordance with the Australian Benchmarks for Industry-Based Customer Dispute Resolution Schemes final decision means a final decision made under rules 24 to 26 generally accepted accounting practice means— (a) approved financial reporting standards (within the meaning of section 2(1) of the Financial Reporting Act r 1 50 51 52 53 54 55 1 2 3 4 2010/250 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 Part 1 r 4 (b) 1993) so far as those standards apply to the reserve scheme: in relation to matters for which no provision is made in those standards and that are not subject to any applic- able rule of law, accounting policies that— (i) are appropriate in relation to the reserve scheme; and have authoritative support within the accounting profession in New Zealand (ii) member means a member of the reserve scheme Minister means the Minister of Consumer Affairs qualifying group has the meaning set out in rule 7(2) remedial action means any action that a financial service provider is required to take by a binding resolution of a complaint under these rules or under the rules of an approved dispute resolution scheme reserve scheme means the person appointed under section 72 of the Act to fulfil the functions of the reserve scheme scheme adjudicator means a person employed or engaged by the reserve scheme under rule 34 to carry out the functions of a scheme adjudicator serious misconduct has the meaning set out in rule 51(2) systemic issue has the meaning set out in rule 50(2).
Part 1 Core features of reserve scheme 4 Purpose of reserve scheme The purpose of the reserve scheme is to promote the long- term interests of consumers and financial service providers by providing a complaints resolution scheme— (a) to which complaints may be made, free of charge, about financial services provided by any member and that is readily accessible to consumers; and that has decision-making systems and processes that are independent from members; and that operates in a timely, cost-effective, and fair manner; and (b) (c) 5 Part 1 r 5 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 2010/250 (d) (e) that operates on a confidential and without prejudice basis; and that is otherwise established and operated under these rules in accordance with— (i) independence, the principles of accessibility, fairness, accountability, efficiency, and effect- iveness set out in section 52(2) of the Act; and the Australian Benchmarks for Industry-Based Customer Dispute Resolution Schemes.
(ii) Functions of reserve scheme The main functions of the reserve scheme are— (a) (b) (c) (d) (e) (f) to provide a complaints resolution scheme of which any type of financial service provider may be a member: to require all members to have their own complaints procedures for dealing with complaints about the finan- cial services provided by the member (see rule 44): if complaints are not resolved under the members’ own procedures, to provide an independent scheme for re- solving those complaints from individuals and qualify- ing groups about financial services provided by mem- bers: to operate the complaints resolution scheme in accord- ance with the reserve scheme’s purpose and these rules: to resolve, or assist in resolving, those complaints under the scheme by agreement between the parties or, if ap- propriate, by a final decision that is binding if accepted by the complainant under these rules: to co-operate with, and communicate information to, the Registrar, approved dispute resolution schemes, relevant licensing authorities, and the Securities Com- mission as required by section 76 of the Act.
The reserve scheme also has the following functions: (a) to promote and publicise the reserve scheme as required by these rules: to give general advice to members on the development and maintenance of good complaints resolution proced- ures and practices of their own: (b) 5 (1) (2) 6 2010/250 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 Part 2 r 6 (3) (c) (d) (e) to monitor compliance with the rules and, if appropriate, to enforce compliance with the rules and with binding resolutions of complaints: to monitor and report on the effectiveness of the reserve scheme for consumers and members: to carry out any other functions of the reserve scheme under these rules.
For the purposes of these rules, the following powers and func- tions must be exercised or performed by a scheme adjudicator on behalf of the reserve scheme: (a) making a determination that a complaint is not covered by the reserve scheme, or exercising any other discre- tion as to the jurisdiction of the reserve scheme, under Part 2: (b) making a proposed or final decision on a complaint (c) under Part 3: any other functions or powers specifically conferred on a scheme adjudicator by these rules.
Part 2 Jurisdiction of reserve scheme 6 (1) What sort of complaints are covered The reserve scheme may consider a complaint only if it is covered under this rule.
(2) A complaint is covered by the reserve scheme if— (a) (b) (c) the complainant is a person or group referred to in rule 7(1); and it is about any conduct of a financial service provider in relation to providing a financial service in New Zealand; and the financial service provider complained about— (i) was, at the time the conduct occurred, a member of the reserve scheme in respect of the relevant financial service (even if it is no longer a member when the complaint is made); or (if an approved dispute resolution scheme has had its approval withdrawn and the financial ser- vice provider is consequently a member of the re- (ii) 7 Part 2 r 7 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 2010/250 serve scheme under section 61 of the Act) was, at the time the conduct occurred, a member of that previously approved dispute resolution scheme in respect of the relevant financial service; and (d) rules 8 to 11 do not exclude the complaint from cover- age or, despite being excluded, it is accepted by a scheme adjudicator under rule 12.
(3) A complaint may relate to an alleged breach of a contract, a statutory obligation, an industry code, or any other legal obli- gation or to an unfair practice (but need not be stated in this way in the complaint).
7 (1) Who may complain The reserve scheme may consider a complaint only from— (a) an individual or a qualifying group that— (i) has received, or has been refused access to, the financial service complained about; and is (or would be, if the financial service was re- ceived) a retail client; or (ii) (b) any person who is making a complaint on behalf of, and with the consent of, an individual or qualifying group described in paragraph (a) (other than as a professional adviser).
(2) A qualifying group is a business or another organisation that— (a) (b) at the time that the events relating to the dispute oc- curred, had no more than 19 full-time (or equivalent) employees; or a scheme adjudicator determines (despite the business or other organisation having more than that number of employees) should have the benefit of free access to the reserve scheme because of its size or nature.
(3) A person who has received, or been refused, an entitlement, benefit, or legal or beneficial interest arising from the provi- sion of a financial service to any other person (for example, a beneficiary under a life insurance policy) is treated as receiv- ing, or being refused access to, the financial service for the purposes of these rules.
8 2010/250 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 Part 2 r 9 8 Complaint must be made to member first (and referred to reserve scheme within time limit) (1) A complaint is not covered by the reserve scheme unless— (a) (b) (c) the complainant has first made that complaint (or substantially the same complaint) to the member con- cerned; and 1 of the following things has occurred: (i) the member has given the complainant written notice of its decision (a decision notice); or the member has given the complainant written notice that it has reached the view that the par- ties are unlikely to resolve the complaint under the member’s complaints procedures (a dead- lock notice); or at least 3 months has passed after the complainant first made that complaint to the member; and (ii) (iii) the complainant then refers the complaint to the reserve scheme within the following applicable time limit: (i) within 3 months after receiving a decision notice or deadlock notice under paragraph (b) if that notice complies with subclause (2): (ii) within 2 years after first making that complaint to the member in any other case.
(2) A decision notice or deadlock notice must advise the com- plainant of the right to refer the complaint to the reserve scheme, free of charge, and the time limit for doing so.
Compensation claimed must not be more than $200,000 9 (1) A complaint is not covered by the reserve scheme if (subject to subclause (2)) the amount claimed as compensation— (a) (b) would exceed $200,000 if consolidated with the amount claimed in any other complaint or complaints brought by the same complainant that concern the same, or sub- stantially the same, events or facts.
exceeds $200,000; or (2) However, a complaint claiming more than that maximum amount is covered by the reserve scheme if the complainant gives, on or shortly after making the complaint, a written 9 Part 2 r 10 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 2010/250 (3) 10 waiver of any rights to the excess portion of the claim if the complaint is resolved under the reserve scheme.
If the complainant waives any rights to the excess, then the relevant member is not liable for the excess amount if there is a binding resolution of the complaint under these rules.
Complaint must not relate to member’s general policies and practices or commercial judgements or investment performance (1) A complaint is not covered by the reserve scheme if a scheme adjudicator determines that— (a) it relates to a member’s general policies and practices unless— (i) it is about how a policy or practice has been ap- plied or administered in a particular case; or it concerns a particular fee or charge made by the member (and, in this case, regard must be had to any scale of fees or charges generally applied by the member); or (ii) (b) (c) it is about a member’s assessment of risk, of financial or commercial criteria, or of character, in deciding— whether to provide a financial service; or (i) the terms on which it provides a financial service; (ii) or it is about the investment performance of a financial product.
(2) However, the complaint is not excluded by subclause (1) if a scheme adjudicator determines that it may involve a breach of a legal obligation.
11 What other complaints are not covered by reserve scheme A complaint is not covered by the reserve scheme if a scheme adjudicator determines that— (a) Complaint also made in another forum the complaint involves the same, or substantially the same, events or facts and the same complainant as a matter already dealt with, or being dealt with, by any 10 2010/250 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 Part 2 r 12 court or tribunal, any arbitration, or any other com- plaints body, unless— (i) the proceedings were, or arbitration or complaint was, commenced by the relevant member only after the complaint was made by the complainant to the member; or (in the case of court or tribunal proceedings) the proceedings have been discontinued; or rule 31(4) applies; or (iii) the matter would be more appropriately dealt with by a court, a tribunal, arbitration, or another complaints body (for example, the Privacy Commissioner); or (ii) Complaint previously considered the complaint involves the same, or substantially the same, events or facts as a complaint previously made by the complainant to the reserve scheme (unless a scheme adjudicator considers that there is sufficient new in- formation to warrant a new consideration of the com- plaint); or Reasonable settlement offer already made on the basis of the facts presented by the complainant, the member has made a reasonable offer to settle the complaint; or Frivolous or vexatious complaint the complaint is frivolous or vexatious; or Complaint too old the complaint involves events that occurred more than 6 years before the complainant made the complaint to the member.
(b) (c) (d) (e) (f) 12 Additional discretions relating to jurisdiction of reserve scheme (1) A scheme adjudicator may, at his or her discretion, accept a complaint for consideration under the reserve scheme that is excluded from coverage by any of rules 8, 10, and 11 if the relevant member and the complainant agree it should be con- sidered under the reserve scheme.
11 Part 2 r 13 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 2010/250 (2) A scheme adjudicator may, at his or her discretion, consoli- date 2 or more complaints from the same complainant into 1 complaint (even if the relief claimed is not the same) if they deal with the same, or substantially the same, events or facts.
13 Process for determining complaint not covered by reserve scheme (1) A scheme adjudicator may determine that a complaint is not covered, or no longer covered, by the reserve scheme under this Part before the complaint is accepted or at any subsequent time.

If a scheme adjudicator makes that determination, he or she must give written notice to the complainant and the member concerned of the determination and the reasons for the deter- mination.
(2) Part 3 Complaints resolution process Making complaints to reserve scheme How to complain 14 (1) A complaint may be made to the reserve scheme, free of charge, either orally or in writing, and need not use the word complaint.

(2) A complaint made orally must be put in writing as soon as (3) practicable.

The reserve scheme must give the assistance that is reasonable in the circumstances to enable a complainant to put a com- plaint in writing (see also rule 47(f)).
15 What reserve scheme must do on receipt of complaint The reserve scheme must give written notice to the com- plainant and the member concerned— (a) of the receipt of a complaint and its nature as soon as is reasonably practicable after receiving the complaint; and either at the same time as the notice of receipt or as soon as is reasonably practicable afterwards,— (b) 12 2010/250 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 Part 3 r 17 (i) (ii) that the complaint is accepted; or if a scheme adjudicator determines that the com- plaint is not covered by the reserve scheme under Part 2, of that determination and the reasons for that determination.
General approach and methods for resolving complaints General approach to resolving complaints A complaint must be investigated, dealt with, and considered under the reserve scheme in a timely, cost-effective, and fair manner and, in particular, in a way that— is consultative with the parties; and (a) encourages the parties, where possible, to work together (b) on matters that are agreed; and (c) maximises the use of informal means to resolve the (d) complaint; and endeavours to resolve the complaint through agreement between the parties; and (e) minimises the involvement of lawyers or other profes- sional advisers as representatives; and is consistent with the principles of natural justice.
(f) negotiation: conciliation or mediation: if rule 23 applies, a final decision.

How complaints may be resolved The reserve scheme may decide to use any 1 or more of the following methods to resolve a complaint: (a) (b) (c) The reserve scheme may decide the procedures to be followed under the relevant method (for example, whether to use email, telephone, meetings, or other methods of contact with the par- ties) consistently with these rules.
16 17 (1) (2) 13 Part 3 r 18 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 2010/250 18 19 (1) Provisions on information supplied in, and conduct of, complaints resolution process Reserve scheme may receive information and make inquiries Any information may be considered in relation to a complaint under the reserve scheme, and any inquiry made, that is fair and reasonable in the circumstances.
Reserve scheme must operate on without prejudice basis The reserve scheme must operate on a without prejudice basis, and all parties must participate in the reserve scheme on a with- out prejudice basis.

(2) Accordingly, no person may be required to disclose any in- formation to which this rule applies in any court proceeding except— (a) (b) in accordance with an order of a court; or if all the parties to the complaints resolution process consent.
(3) This rule applies to all information generated for the purposes of, or disclosed in the course of, considering or resolving the complaint under the reserve scheme.

(4) However, this rule does not apply to information that exists independently of the complaints resolution process.
20 Obligation of parties to supply information requested to resolve complaints (1) A party to a complaint must supply to the reserve scheme any information requested by a scheme adjudicator to assist in re- solving the complaint unless the party satisfies the scheme ad- judicator that— (a) supply would breach an obligation of confidence owed to a third person who has refused to consent to the sup- ply (despite the party’s best endeavours to obtain that consent); or the information is subject to legal professional privil- ege; or the party does not have the information or it is not within the party’s control.
(b) (c) 14 2010/250 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 Part 3 r 21 (2) As soon as practicable after receiving a request under sub- clause (1) (and in any case within the time limit set by the scheme adjudicator), the party must— (a) (b) supply the information to the reserve scheme; or give its reasons for withholding the information (iden- tifying the information being withheld).
(3) 21 (1) (2) If a party to a complaint fails (without satisfying a scheme ad- judicator that subclause (1)(a), (b), or (c) applies) to supply the information within the time limit set by the scheme adjudica- tor, the reserve scheme may— (a) proceed to resolve the complaint on the basis that an ad- verse inference may be drawn from that party’s failure to comply with the information request; or if the complainant fails to comply with a request, refuse to continue consideration of the complaint.
(b) Reserve scheme must keep parties informed The reserve scheme must, in relation to a complaint,— (a) keep the parties informed of the progress of a complaint; and ensure that each party to a complaint has a reasonable opportunity to be informed of, and respond to, the argu- ments or submissions of the other party.
(b) If 1 party (party A) supplies information to the reserve scheme that the reserve scheme then wishes to supply to any other party to the complaint (party B),— (a) the reserve scheme is entitled to assume that party A consents to the supplying of the information in its en- tirety to party B (unless there is a clear statement to the contrary); but if party A clearly refuses consent to the supply of the information to party B, the reserve scheme must not supply that information to party B; but if paragraph (b) applies, a scheme adjudicator must not use that information to reach a decision adverse to party B unless— (i) party B has consented to the use of the informa- tion on the basis of non-disclosure of the infor- mation to party B; or (b) (c) 15 Part 3 r 22 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 2010/250 (ii) a scheme adjudicator determines that exceptional circumstances apply that justify a departure from the usual application of the principles of natural justice.
22 Representation of parties A party to a complaint may— (a) (b) use an adviser (whether a lawyer or other professional adviser) as a representative or have an adviser present at a meeting if all parties consent; or act through a representative that the reserve scheme considers appropriate if that person is a corporation, a minor, or under a disability, or if the reserve scheme is satisfied that the person is unable to present his or her case adequately in person for any other reason.
Final decisions on complaints 23 When reserve scheme may proceed to make final decision on complaint If the reserve scheme determines that it is no longer appropri- ate to assist the parties to reach an agreed settlement, it may refer the complaint to a scheme adjudicator for a final decision under the reserve scheme.
Process for making and accepting final decisions 24 (1) A scheme adjudicator must follow the following process in making a final decision on a complaint: (a) after reviewing the information held by the reserve scheme on the complaint (including any recommenda- tion already made by the reserve scheme to the parties and any submissions by the parties on the recommen- dation), the scheme adjudicator must give the parties written notice of— (i) (ii) the proposed decision (and the reasons for it); and the period for further submissions (which must be at least 15 working days); and 16 2010/250 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 Part 3 r 25 (b) (c) (d) during that period the scheme adjudicator may continue to consider the complaint and hear any further submis- sions from the parties; and if the complaint is not otherwise resolved during that period, the scheme adjudicator may make a final deci- sion (which may differ from the proposed decision) at the end of that period; and the scheme adjudicator must give written notice to the parties of the final decision (and the reasons for it) and of the acceptance period (which must be at least 15 working days).
(2) A final decision becomes binding on the parties if, within the acceptance period stated in the notice of the decision, the com- plainant gives written notice to the reserve scheme and the other party or parties stating that the complainant accepts the decision in full and final settlement of the complaint.
Basis for final decisions under reserve scheme 25 (1) A scheme adjudicator must make any final decision on a com- plaint in light of what is fair and reasonable in all the circum- stances and having regard to— (a) (b) (c) the law; and relevant industry codes of practice; and good industry practice.

(2) However, the scheme adjudicator is not bound to give effect to strict legal rights or obligations or to legal forms or techni- calities.
(3) Without limiting subclause (1) or (2), the scheme adjudicator may, in relation to any agreement or document that is directly or indirectly relevant to the complaint, disregard any provision in that agreement or document that excludes or limits— any condition, warranty, or undertaking; or (a) any right, duty, liability, or remedy that would arise or (b) accrue in the circumstances of the complaint if there were no such exclusion or limitation.
(4) The scheme adjudicator is not bound by rules of evidence or previous decisions.
17 Part 3 r 26 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 2010/250 26 What kinds of remedies are possible under final decision A scheme adjudicator may direct, as part of a final decision, any, or a combination, of the following remedies on a com- plaint: (a) that the member pay to any person, by way of compen- sation, a sum of up to $200,000 for 1 complaint or, in aggregate, for related complaints that the scheme adju- dicator has treated as 1 consolidated complaint: that the member take any other action directed by the scheme adjudicator to do either or both of the following things: remedy the matter complained about: (i) (ii) provide redress for any loss or damage suffered: that the member concerned cease, or not continue or re- peat, the conduct that has caused the matter complained about or conduct of the same or a similar kind (as spe- cified by the scheme adjudicator): that the member make a public or private apology as directed by the scheme adjudicator.
(b) (c) (d) 27 No appeal against final decision of reserve scheme There is no appeal to a court against a final decision that has become binding under these rules.

End of complaints resolution process 28 What constitutes binding resolution of complaint (1) There is a binding resolution of a complaint under these rules if— (a) the parties to the complaint enter into an agreed settle- ment; or a final decision becomes binding on the parties to the complaint in accordance with rule 24.
(b) (2) If the parties to a complaint enter into an agreed settlement, the parties must notify the reserve scheme in writing of that fact.
29 When complaint process ceases if no binding resolution The reserve scheme may cease considering a complaint (even if there is no binding resolution) if— 18 2010/250 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 Part 3 r 31 (a) (b) (c) (d) (e) the complainant withdraws the complaint by written no- tice to the reserve scheme; or a scheme adjudicator determines that the complaint is not, or is no longer, covered by the reserve scheme (and, in this case, rule 13 applies); or the reserve scheme decides to refuse, under rule 20(3) (failure to comply with request to supply information), to continue considering a complaint; or rule 31(2) applies (bringing of proceedings by com- plainant); or the acceptance period for a final decision under rule 24 expires.
Other matters relating to consideration of complaint 30 Confidentiality obligations for reserve scheme The reserve scheme must keep confidential all information re- lating to a complaint that is provided to it except— (a) to the extent reasonably necessary to carry out the func- tions of the reserve scheme (or any incidental matter); and as required or permitted by law; and if the disclosure of the information is with the consent of the parties to the complaint.
(b) (c) 31 When parties may bring alternative court action (1) Nothing in these rules prevents a complainant from bringing proceedings in a court or tribunal on the same, or substantially the same, events or facts as a complaint while the complaint is being considered under the reserve scheme.
(2) However, if a complainant does bring proceedings of that kind, the reserve scheme must cease considering, and resolving, the complaint on becoming aware of that fact (unless the proceed- ings are permitted under subclause (4)).

(3) A member must not bring proceedings against a complainant in any court or tribunal on the same, or substantially the same, events or facts as the complaint (unless the proceedings are permitted under subclause (4)).
19 Part 4 r 32 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 2010/250 (4) Proceedings by either party are permitted to preserve a party’s legal rights if a limitation period is about to expire and, in this case,— (a) while the complaint is being considered under the re- serve scheme, the party must pursue the legal proceed- ings to the minimum extent necessary to preserve its rights; and on resolution of the complaint, the party must discon- tinue any aspect of the legal proceedings that is incon- sistent with any binding resolution of the complaint.
(b) Part 4 Structure and miscellaneous powers of reserve scheme 32 (1) Power to delegate other functions or powers The reserve scheme may delegate any of its functions or powers to any person employed or engaged by it to perform the functions of the reserve scheme (other than this power of delegation).
(2) No delegation in accordance with this section— (a) (b) (c) affects or prevents the performance of any function or the exercise of any power by the reserve scheme; or affects the responsibility of the reserve scheme for the actions of any delegate acting under the delegation; or is affected by any change in the person appointed as the reserve scheme or any employee.

(3) This rule is subject to rule 5(3), which specifies which func- tions may be performed only by a scheme adjudicator under these rules.
Powers of delegate 33 (1) A delegate to whom any functions or powers of the reserve scheme are delegated may— (a) perform the function or exercise the power in the same manner, subject to the same restrictions, and with the same effect as if the delegate were the reserve scheme (unless the delegation provides otherwise); and 20 2010/250 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 Part 4 r 35 (b) may delegate the function or power only with the prior written consent of the reserve scheme and subject to the same restrictions, and with the same effect, as if the subdelegate were the delegate.
(2) A delegate who purports to perform a function or exercise a power under a delegation— (a) is, in the absence of proof to the contrary, presumed to do so in accordance with the terms of that delegation; and (b) must produce evidence of his or her authority to do so if reasonably requested to do so.

34 (1) (2) 35 Appointing scheme adjudicator The reserve scheme must employ or engage 1 or more persons as scheme adjudicators under these rules.
In employing or engaging a scheme adjudicator, the reserve scheme must— (a) consider candidates’ objectivity, qualifications, experi- ence, and personal qualities; and only employ or engage a person who is capable of per- forming the functions of a scheme adjudicator.
(b) Functions of scheme adjudicator The functions of a scheme adjudicator are to do the following things on behalf of the reserve scheme: (a) make determinations that a complaint is not covered by the reserve scheme, or to exercise any other discretion as to the jurisdiction of the reserve scheme, under Part 2: (b) make proposed or final decisions on a complaint under (c) (d) Part 3: perform any other functions or exercise any other powers specifically conferred on a scheme adjudicator by these rules: perform any other functions or exercise any other powers delegated to the scheme adjudicator by the reserve scheme.
21 Part 4 r 36 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 2010/250 36 37 (1) Appointing persons to provide mediation services The reserve scheme may employ or engage persons to pro- vide mediation services to assist persons to resolve complaints, promptly and effectively, under the reserve scheme.
Independence of scheme personnel The reserve scheme must ensure that any person employed or engaged as a scheme adjudicator or to provide mediation services— (a) is, in deciding how to deal with any particular complaint or aspect of it, able to act independently; and is independent of any of the parties to the complaint.
(b) (2) However, the reserve scheme, in managing the overall provi- sion of the complaints resolution scheme, may give general in- structions about the manner in which, and the times and places at which, services are to be provided (including as to particular types of matters or particular types of situations, or both).
38 Particular requirements for independence of scheme adjudicator (1) A scheme adjudicator must not consider a complaint for the purpose of making a final decision if the scheme adjudicator has taken part in any investigation, negotiation, or mediation in relation to that complaint.

This rule does not limit rule 37.

(2) Reserve scheme may extend complaint time frames The reserve scheme may, if it thinks fit, extend any time frame set under these rules that relates to considering or resolving a complaint.
Reserve scheme responsible for actions of personnel The reserve scheme is responsible for all actions of a scheme adjudicator, and of other persons employed or engaged by the reserve scheme to fulfil the functions of the reserve scheme, in those capacities.
39 40 22 2010/250 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 Part 5 r 42 Part 5 Membership of reserve scheme 41 Who is eligible to be member of reserve scheme (1) A financial service provider of any type is eligible to be a mem- ber of the reserve scheme— (a) (b) in respect of all its financial services (if it is not a mem- ber of any approved dispute resolution scheme); or in respect of those of its financial services that are not covered by an approved dispute resolution scheme of which it is a member.
(2) A financial service provider is or becomes disqualified from membership of the reserve scheme if it has not taken any re- medial action required under any approved dispute resolution scheme within the period allowed for that action or, if no period was specified, within a reasonable time (as determined by the reserve scheme).
Subclause (2) does not prevent a financial service provider from being registered as a member if the period allowed for the action or the reasonable time has not yet expired (but see rule 46(1)(e)).
(3) 42 Applications for membership The reserve scheme must register a financial service provider as a member if the financial service provider— (a) applies for membership in the form required by the re- serve scheme and pays the prescribed fee for member- ship; and has entered into, and provides a copy of, a deed of undertaking, enforceable by the reserve scheme and by any complainant, to— (i) (ii) comply with these rules; and comply with any binding resolution of a com- plaint under the reserve scheme (whether or not it is still a member of the reserve scheme); and is not disqualified from membership under rule 41(2).
(b) (c) 23 Part 5 r 43 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 2010/250 43 (1) (2) Automatic conferral of membership If the Minister withdraws an approved dispute resolution scheme’s approval, all members of that scheme become members of the reserve scheme under section 61 of the Act despite rule 41(2).

Those members will be members of the reserve scheme in re- spect of all financial services previously covered by the ap- proved dispute resolution scheme.
(3) However, a financial service provider that becomes a member under this rule then is disqualified from membership of the reserve scheme if it does not meet the requirements set out in rule 42(a), (b), and (c) within the period specified by the reserve scheme.
44 Duties on members to have own complaints resolution procedures (1) A member must— (a) (b) (c) (d) establish (either itself or through membership or ar- rangement with another body) proper procedures for dealing with complaints about the provision of finan- cial services by the member; and publicise to customers those procedures for making a complaint; and receive and consider complaints under those proced- ures; and use its best endeavours to resolve complaints under those procedures.
(2) At a minimum, the procedures must ensure that— (a) (b) the receipt and nature of a complaint are documented, the complainant receives an acknowledgement that the complaint has been received, and the steps taken to re- solve the complaint are documented; and the complainant is informed, at the time of acknowledg- ing receipt of a complaint, that if a complaint is not re- solved through these procedures that the complainant may take the complaint, free of charge, to the reserve scheme; and 24 2010/250 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 Part 5 r 46 (c) (d) (e) the complaint, and any information provided or created in relation to the complaint, is kept confidential to the parties except with the consent of the complainant; and the member gives written notice (with reasons) to the complainant— (i) of any decision it reaches on the complaint under those procedures (a decision notice); or if it reaches the view that the parties are unlikely to resolve the complaint under those procedures (a deadlock notice); and (ii) any decision or deadlock notice also states that the com- plainant may take the complaint, free of charge, to the reserve scheme and the time limits within which the complainant must do so under rule 8.
(2) How to terminate membership voluntarily 45 (1) A member may terminate its membership of the reserve scheme by giving the reserve scheme at least 3 months’ written notice of the voluntary termination date.

The terminating member must carry out all outstanding remed- ial action within 20 working days after the voluntary termin- ation date or within any longer period agreed by the reserve scheme.
The reserve scheme must notify the Registrar in writing of the termination in accordance with section 17 of the Act.

If the terminating member does not comply with subclause (2), the reserve scheme may report the terminating member to the relevant licensing authority and the Registrar.
(4) (3) 46 (1) How membership may be terminated compulsorily The reserve scheme may compulsorily terminate a member’s membership of the scheme under subclause (2) if it considers (and the advisory body concurs) that termination is justified because the member— (a) has committed a material breach of any of these rules; or has failed to comply with a requirement of an agreed settlement or of a final decision that has become binding on the member; or (b) 25 Part 6 r 47 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 2010/250 (c) (d) (e) has persistently breached these rules; or has failed to pay a prescribed fee or charge in respect of membership or complaints when due; or has become disqualified under rule 41(2) or 43(3) (which relates to members being accepted subject to complying with certain requirements within the rele- vant period).
If subclause (1) applies, the reserve scheme may— (a) give the member written notice— (i) of that fact and what action must be taken to rem- edy the situation (specifying a period of at least 10 working days for completing that action); and that the member’s membership will be termin- ated at the end of that notice period if that action is not taken; and (ii) (b) if the member does not comply with the notice within the notice period,— (i) (ii) terminate the member’s membership; and notify the member, the Registrar (under section 17 of the Act), and the relevant licensing author- ity of the termination; and report the member to the advisory body.
(iii) Part 6 Reporting by, and accountability of, reserve scheme Accessibility requirements How reserve scheme must ensure its accessibility The reserve scheme— (a) must maintain, or ensure there is maintained, at all rea- sonable times a separate Internet site for the reserve scheme on which it promotes the reserve scheme and through which complaints may be made by the public: (b) must ensure its Internet site is publicly accessible at all reasonable times: (c) must maintain a list of the reserve scheme’s current members and must publish this list on its Internet site: (2) 47 26 2010/250 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 Part 6 r 49 (d) must maintain a freephone number and a freepost ser- vice: (e) may promote the reserve scheme’s availability in any other way it thinks fit (for example, newspapers, Citi- zens Advice Bureaux, and public libraries): must provide additional support (for example, an inter- preter) that is reasonable in the circumstances— (i) (f) to assist complainants to put complaints into writing: if there are special circumstances (for example, disability or language differences) that make it difficult for a complainant to make a complaint to the reserve scheme: (ii) (g) must promote the availability of its additional support services: (h) may take other action to promote the reserve scheme to specific groups that may not otherwise know of the reserve scheme because of special socio-eco- nomic, cultural, linguistic, geographical, or physical circumstances (for example, advertise in non-English newspapers).
48 Reserve scheme may disseminate information The reserve scheme may collect case studies of complaints and may (without any information identifying the parties involved) disseminate these to members and publish them on its Internet site for the purpose of— (a) (b) educating members and consumers: educating other groups that have an interest in the case studies or in complaints resolution processes (for ex- ample, Community Law Centres or Citizens Advice Bu- reaux): demonstrating the process of decision making under the reserve scheme.
(c) Monitoring and reporting by reserve scheme 49 What monitoring reserve scheme must carry out (1) The reserve scheme must monitor members’ compliance with these rules.

27 Part 6 r 50 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 2010/250 (2) The reserve scheme must regularly report the results of that monitoring to the advisory body, with advice on what actions the reserve scheme has taken, or proposes to take, in the case of breaches by members.
50 What reserve scheme must do about systemic issues (1) The reserve scheme must report any systemic issue that it iden- tifies, in the course of considering a complaint, to the advisory body, the member concerned, and other members (as the re- serve scheme considers appropriate).
In these rules, a systemic issue is an issue that has material implications, beyond the parties to the particular complaint, relating to either— (a) the systems or conduct of the member complained about; or the systems or conduct of other members, or classes of members.
(b) Examples of systemic issues include poor disclosure or com- munication processes, information technology problems, ad- ministrative or technical errors, flaws in the design of finan- cial products or other financial services, or inaccurate inter- pretation by a member or members of standard terms and con- ditions.
51 What reserve scheme must do about serious misconduct (1) The reserve scheme must report all serious misconduct of a member to the relevant licensing authority or any other rele- vant regulator.

In these rules, serious misconduct is conduct that the reserve scheme considers, on reasonable grounds, is fraudulent or grossly negligent, or involves wilful breaches of any applic- able law or code of practice.
Monitoring of reserve scheme Notification of advisory body The Minister may give a written notice to the reserve scheme of the persons that constitute the advisory body and have the function of monitoring the reserve scheme for the purposes of (2) (3) (2) 52 (1) 28 2010/250 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 Part 6 r 54 (2) these rules (and may amend or revoke that notice in the same way).
If the Minister does not give that notice (or revokes and does not replace the notice), any reference to the advisory body in these rules must be read as a reference to the Minister.

53 What must happen to complaints about reserve scheme (1) The reserve scheme must receive and promptly refer com- plaints about the reserve scheme to the advisory body.
The reserve scheme must, if the advisory body makes any rec- ommendations on the complaint to the reserve scheme,— (a) have due regard to the recommendation or recommen- dations; and report to the advisory body on the following matters: (i) (b) whether or not it has implemented the recom- mendation or recommendations; and to the extent it has implemented, or proposes to implement, the recommendation or recommen- dations, what actions it has taken or proposes to take; and to the extent it does not propose to implement any of the recommendations, why not and what ac- tions it proposes to take instead (if any) in rela- tion to the complainant or the reserve scheme’s systems or procedures (or both); and the time frames for any actions it proposes to take.
(ii) (iii) (iv) The reserve scheme must make its response under subclause (2) within the time specified by the advisory body in its rec- ommendations.

The reserve scheme must notify the complainant of the advi- sory body’s recommendations and of its response under sub- clause (2).

Annual report by reserve scheme The reserve scheme must submit, by 31 October in each year (other than 31 October 2010), an annual report on the reserve scheme to the Minister.
29 (2) (3) (4) 54 (1) Part 6 r 55 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 2010/250 The annual report must include at least the following informa- tion relating to the previous reporting year: (a) statistics on caseload, resolved cases, cases rejected on coverage grounds, and the amount of time taken to re- solve complaints: the results of feedback surveys: some examples of typical cases (without any informa- tion identifying the parties involved): information on compliance with the principles set out in section 52(2) of the Act: a list of members: the results of any independent review under rule 55 completed within the previous 12 months: financial statements prepared in accordance with gener- ally accepted accounting practice that demonstrate how funding is being used: any systemic issues arising from complaints and how these have been dealt with (without any information identifying the parties involved).
(b) (c) (d) (e) (f) (g) (h) at its head office (during ordinary office hours); and on its Internet site.

The reserve scheme must make copies of the reserve scheme’s annual report available for inspection by the public, free of charge,— (a) (b) In this rule, reporting year means a year ending on 30 June (but, for the first reporting year, means the period beginning on the date of the appointment of the reserve scheme and ending on 30 June 2011).
Independent review of reserve scheme The reserve scheme must co-operate with any person ap- pointed by the Minister to carry out an independent review of the reserve scheme.
The reserve scheme must make available to the person ap- pointed by the Minister to carry out the review information on the following matters: (a) the timeliness of the complaints resolution process: (2) (3) (4) 55 (1) (2) 30 2010/250 Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 Explanatory note (c) (b) whether the reserve scheme is meeting the principles set out in section 52(2) of the Act and complying with its obligations set out in these rules: whether the reserve scheme is meeting any conditions of appointment set out in the Order in Council appoint- ing the scheme: the results of any review by the reserve scheme of its operations.
(d) Rebecca Kitteridge, Clerk of the Executive Council.

Explanatory note This note is not part of the rules, but is intended to indicate their general effect.

These rules, which come into force on 30 August 2010, are about the functions of the reserve scheme appointed under section 72 of Financial Service Providers (Registration and Dispute Resolution) Act 2008 (the Act).
The reserve scheme is designed to provide an independent consumer complaints resolution service for complaints about financial services provided by members.

The key provisions of the rules are as follows: complaints may be made, free of charge, by retail clients who • are individuals or businesses or other organisations with no more than 19 full-time equivalent employees.

There are some limits on the types of complaints that are covered by the re- serve scheme.
The main limits are that complaints must first have been made to the member concerned (and referred to the reserve scheme within the applicable time limit) and the com- pensation claimed must not exceed $200,000.

The rules also set out how to make a complaint: the scheme works by assisting the parties to reach an agreed settlement.

However, final decisions may be made that be- come binding on both parties if accepted by the complainant.

There is no appeal possible from a final decision.


There is a range of remedies possible under the scheme, but compensa- • 31 Explanatory note Financial Service Providers (Dispute Resolution—Reserve Scheme) Rules 2010 2010/250 tion is capped at $200,000.

How information must be dealt with and other requirements for the processes of the scheme are set out in the rules: the rules also provide for how financial service providers be- come members and how membership may be terminated.
Any type of financial service provider may be a member: the rules provide a number of accountability mechanisms for the reserve scheme, including an annual report and require- ments to co-operate with an independent review of the scheme.

• • Issued under the authority of the Acts and Regulations Publication Act 1989.

Date of notification in Gazette: 26 August 2010.

These rules are administered by the Ministry of Consumer Affairs.
12 32 Wellington, New Zealand: Published under the authority of the New Zealand Government—2010