Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698751246691.pdf (New Zealand)
2011/282 Securities Trustees and Statutory Supervisors Regulations 2011 Anand Satyanand, Governor-General Order in Council At Wellington this 22nd day of August 2011 Present: His Excellency the Governor-General in Council Pursuant to section 53(1) of the Securities Trustees and Statutory Supervisors Act 2011, the Governor-General, acting on the advice and with the consent of the Executive Council and on the recom- mendation of the Minister of Commerce made after consulting the Financial Markets Authority, makes the following regulations.
Contents Title Commencement Interpretation Licensing criteria Matters that FMA must consider in satisfying itself that directors and senior managers are of good character Things that FMA must take into account in assessing matters referred to in section 16(3) of Act Matters that FMA must assess under section 16(3)(i) of Act Page 2 2 2 3 4 6 1 Securities Trustees and Statutory Supervisors Regulations 2011 2011/282 Method of assessment of matters in section 16(3) of Act Contents of regular reports that are required to be delivered by licensees to FMA Matters and information that must be contained in all regular reports Additional matters and information that must be contained in regular reports of trustees and statutory supervisors of 1 or more supervised issuers Additional matters and information that must be contained in regular reports of statutory supervisors of 1 or more supervised retirement villages 7 7 8 9 Regulations Title These regulations are the Securities Trustees and Statutory Supervisors Regulations 2011.
Commencement These regulations come into force on 1 October 2011.
Interpretation In these regulations, unless the context otherwise requires,— Act means the Securities Trustees and Statutory Supervisors Act 2011 applicant means a person who applies for, or to vary, a licence under section 15 of the Act financial markets legislation means the Acts listed in Sched- ule 1 of the Financial Markets Authority Act 2011 and the en- actments made under those Acts offence of dishonesty means— (a) a crime described in any of sections 104, 105B, 108 to 117, and 217 to 266 of the Crimes Act 1961; and an offence described in any of sections 15 to 20 of the Summary Offences Act 1981 (b) proposed supervised entity means the issuer of any secur- ity, and the operator of any retirement village, proposed to be covered by an applicant’s licence r 1 7 8 9 10 1 2 3 (1) 2 2011/282 Securities Trustees and Statutory Supervisors Regulations 2011 r 4 (2) 4 (1) (b) reporting period, in relation to a report delivered by a licensee to the FMA under section 25 of the Act, means— (a) the period since the period covered by the licensee’s previous report to the FMA under that section; or in the case of the licensee’s first regular report under that section, the period since the licence was issued supervised entity means a supervised issuer and the operator of a supervised retirement village supervised retirement village means a supervised interest that is a retirement village.
In these regulations, unless the context otherwise requires, a person is associated with another person if— they are acting jointly or in concert; or (a) either person acts, or is accustomed to act, in accordance (b) with the wishes of the other person; or they are related companies within the meaning of sec- tion 2(3) of the Companies Act 1993; or either person is able, directly or indirectly, to exert a substantial degree of influence over the activities of the other; or they are both, directly or indirectly, under the control of the same person; or one person is a director of the other person (being a company or other body corporate).
(d) (c) (e) (f) Licensing criteria Matters that FMA must consider in satisfying itself that directors and senior managers are of good character The matters that the FMA must consider in satisfying itself that every director and senior manager of an applicant is of good character for the purposes of section 16(2)(b) of the Act are whether any of those persons has been— (a) (b) convicted of any offence of dishonesty; or convicted of any offence under financial markets legis- lation; or refused registration or other entry into, or restricted from the right to carry on, any profession or occupa- (c) 3 r 5 (2) 5 (1) Securities Trustees and Statutory Supervisors Regulations 2011 2011/282 (d) tion that is relevant to the role of a director or senior manager; or the subject of any disciplinary action taken by a discip- linary body in respect of any profession or occupation.
To avoid doubt, the matters referred to in this regulation do not limit the matters that the FMA may consider in satisfying itself that every director and senior manager of an applicant is of good character for the purposes of section 16(2)(b) of the Act.
Things that FMA must take into account in assessing matters referred to in section 16(3) of Act The FMA must, in assessing the matters referred to in section 16(3)(a) of the Act, take into account— (a) in the roles that they hold in the applicant; and in the financial or retirement village industry; and in business generally; and the number of years of experience that the applicant’s directors and senior managers have— (i) (ii) (iii) the extent to which the applicant’s directors and senior managers are members of relevant professional bodies (for example, the New Zealand Institute of Chartered Accountants, the New Zealand Law Society, and the Institute of Directors in New Zealand (Inc)).
(b) (2) The FMA must, in assessing the matters referred to in section 16(3)(b) of the Act, take into account— (a) the assets of the applicant, the form the assets take, and the ratio of liquid to illiquid assets; and (c) (b) whether the applicant would be able to absorb the cost if 1 or more of the proposed supervised entities were to fail and if the applicant were not to be paid for its services; and any bank overdraft resources available to the applicant; and the financial strength of the applicant’s shareholders or owners; and any arrangements or guarantees that the applicant has with any associated persons; and (d) (e) 4 2011/282 Securities Trustees and Statutory Supervisors Regulations 2011 r 5 (f) the estimated assets and liabilities of the proposed supervised entities.
(3) (4) (5) (6) (c) (b) The FMA must, in assessing the matters referred to in section 16(3)(c) of the Act, take into account— (a) the number of staff employed by the applicant who are involved in trustee or statutory supervisor work, and the training those staff have received; and the number of support staff employed by the applicant; and the applicant’s access to legal and other professional services; and the applicant’s office facilities and infrastructure.
(d) The FMA must, in assessing the matters referred to in section 16(3)(d) of the Act, take into account the applicant’s practices of peer review and oversight of junior staff.
The FMA must, in assessing the matters referred to in section 16(3)(e) of the Act, take into account— (a) the reporting obligations that the applicant proposes to require of different types or classes of proposed super- vised entities in relevant governing documents; and the applicant’s systems to track whether it has received on time all required documentation from proposed supervised entities; and the applicant’s systems to record its consideration of reports received from proposed supervised entities and any action taken as a result.
(b) (c) The FMA must, in assessing the matters referred to in section 16(3)(f) of the Act, take into account— (a) (b) the ownership of the applicant; and any relationships that the applicant has, or its directors and senior managers have, with the proposed supervised entities; and any other businesses carried out by the applicant, or any associated persons of the applicant, that may compromise the applicant’s independence from the proposed supervised entities; and any other relationships that the applicant has, or its dir- ectors and senior managers have, that have the potential (c) (d) 5 Securities Trustees and Statutory Supervisors Regulations 2011 2011/282 to compromise the applicant’s independence from the proposed supervised entities.
The FMA must, in assessing the matters referred to in section 16(3)(g) of the Act, take into account— (a) the balance of independent and executive directors on the applicant’s board; and the nature, composition, powers, and functions of the applicant’s board committees; and the applicant’s succession plans, disaster recovery plans, and risk management policies; and (b) (c) (d) whether the applicant has an internal auditor.
The FMA must, in assessing the matters referred to in section 16(3)(h) of the Act, to the extent that the applicant is reason- ably able to provide such information in accordance with the terms of the relevant insurance contract, take into account— the amount for which the applicant is insured, and how (a) it compares with the applicant’s overall risk of exposure to liability; and the coverage of the applicant’s insurance policy and its exclusions; and how often the insurance is reviewed.
(c) To avoid doubt, this regulation does not limit the things that the FMA may take into account in assessing the matters referred to in section 16(3) of the Act or the way in which those matters may be assessed.
(b) Matters that FMA must assess under section 16(3)(i) of Act The matters that the FMA must assess under section 16(3)(i) of the Act are as follows: (a) whether the applicant previously had a licence and, if so, the applicant’s record under the licence, including any contravention of the terms of the licence or financial markets legislation; and the applicant’s due diligence processes when deciding whether to accept new appointments as a trustee or statutory supervisor; and (b) r 6 (7) (8) (9) 6 6 2011/282 Securities Trustees and Statutory Supervisors Regulations 2011 r 8 (c) whether the applicant delegates any of its functions to another entity and, if so, how the applicant ensures that the function is effectively performed.
7 (1) (2) 8 Method of assessment of matters in section 16(3) of Act The FMA may, when assessing the matters referred to in sec- tion 16(3) of the Act (including the matters referred to in regu- lation 6), give to each matter the weight that the case suggests is suitable.
The FMA must assess the matters referred to in section 16(3) of the Act, the things to take into account in assessing those matters under regulation 5, and the matters referred to in regu- lation 6 as follows: (a) the matters in section 16(3)(a), (d), and (e) of the Act, the things to take into account in assessing those mat- ters under regulation 5(1), (4), and (5), and the matters in regulation 6 must be assessed only against the part of the applicant’s business that is actually involved in the work of performing the functions of a trustee or statu- tory supervisor: the matters set out in section 16(3)(b), (c), (f), (g), and (h) of the Act and the things to take into account in as- sessing those matters under regulation 5(2), (3), (6), (7), and (8) must be assessed against the applicant’s busi- ness as a whole.
(b) Contents of regular reports that are required to be delivered by licensees to FMA Matters and information that must be contained in all regular reports Every report delivered by a licensee to the FMA under section 25 of the Act must contain, for the reporting period, all of the following: (a) details of any changes in circumstances relating to the requirements referred to in section 16(2), the matters re- ferred to in section 16(3), or any other matters reported to the FMA under section 26(3) of the Act: a statement that either— (b) 7 r 9 Securities Trustees and Statutory Supervisors Regulations 2011 2011/282 (i) (ii) confirms the licensee’s compliance with any con- ditions imposed on the licence; or sets out the details of the licensee’s non-compli- ance with those conditions: (c) (d) (e) (f) a summary of the licensee’s interactions with its super- vised entities, including a broad description of how regularly the licensee received reports from, and met with, those supervised entities: a description of how any investigations by the licensee into concerns about any of its supervised entities were initiated and carried out: a description of what steps the licensee took in response to any actual or potential insolvency of any of its super- vised entities: a statement that either— (i) confirms the licensee’s compliance with the terms of every governing document that relates to a supervised interest; or sets out the details of the licensee’s non-compli- ance with the terms of any governing document that relates to a supervised interest.
(ii) Additional matters and information that must be contained in regular reports of trustees and statutory supervisors of 1 or more supervised issuers This regulation applies to a report delivered to the FMA under section 25 of the Act by a licensee that is a trustee or a statutory supervisor of 1 or more supervised issuers.
In addition to the matters and information referred to in regu- lation 8, the report must contain, for the reporting period, all of the following: (a) (b) (c) the number of supervised issuers: the number and type of issues of supervised interests: the number of appointments as a trustee or statutory supervisor that the licensee has gained or lost: the value of supervised interests that are securities on issue, calculated as near as possible to the reporting date: (d) 9 (1) (2) 8 2011/282 Securities Trustees and Statutory Supervisors Regulations 2011 r 10 (e) (f) the number of supervised issuers that have committed a material breach of the terms of their trust deed or deed of participation, or of a term of any offer of securities: a description of what steps the licensee took in response to any actual or potential material breach of a trust deed or deed of participation, or of the terms of any offer of securities, by any of its supervised issuers.
10 (1) (2) Additional matters and information that must be contained in regular reports of statutory supervisors of 1 or more supervised retirement villages This regulation applies to a report delivered to the FMA under section 25 of the Act by a licensee that is a statutory supervisor of 1 or more retirement villages.
In addition to the matters and information referred to in regu- lation 8, the report must contain, for the reporting period, all of the following: (a) (b) the number of supervised retirement villages: the number and type of operators of those supervised retirement villages: the number of appointments as a statutory supervisor that the licensee has gained or lost: a statement of whether or not those supervised retire- ment villages have full replacement insurance cover: the total amount, as at the date of the most recent audited financial statements prepared in accordance with gener- ally accepted accounting practice, that the operators of those supervised retirement villages would be required to pay to residents under occupation right agreements in the event of the termination of all residents’ occupation right agreements: the number of instances (if any) where the operator of a supervised retirement village has failed to pay any amount due to a resident under, or in relation to, an oc- cupation right agreement, where that amount becomes due for any reason: a summary of the licensee’s interactions with residents of the retirement village.
(c) (d) (e) (f) (g) 9 Explanatory note Securities Trustees and Statutory Supervisors Regulations 2011 2011/282 (3) In this regulation, resident and occupation right agreement have the meanings given in section 5 of the Retirement Vil- lages Act 2003.

Rebecca Kitteridge, Clerk of the Executive Council.

Explanatory note This note is not part of the regulations, but is intended to indicate their general effect.
These regulations, which come into force on 1 October 2011, pre- scribe— • the matters that the Financial Markets Authority (the FMA) must consider when processing applications for licences under the Securities Trustees and Statutory Supervisors Act 2011 (the Act), and the method of making certain assessments: the content of the regular reports that licensees must provide to the FMA under section 25 of the Act.

• Issued under the authority of the Acts and Regulations Publication Act 1989.
Date of notification in Gazette: 25 August 2011.

These regulations are administered by the Ministry of Economic Development 12 10 Wellington, New Zealand: Published under the authority of the New Zealand Government—2011