Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698751307939.pdf (New Zealand)
2022/231 Financial Markets Conduct (Restricted Schemes— Disclosure and Reporting) Exemption Notice 2022 This exemption is granted by the Financial Markets Authority under section 556 of the Financial Markets Conduct Act 2013 after being satisfied of the matters set out in section 557 of that Act.
Contents Title Commencement Revocation Interpretation Transitional, savings, and related provisions Exemption for fund updates Exemption for fund updates Conditions of exemption in clause 6 Exemptions for quarterly reporting Exemption for quarterly reporting of limit breaks Conditions of exemption in clause 8 Exemption for quarterly reporting of related party transaction certificates Conditions of exemption in clause 10 Exemption for annual confirmation information Exemption for annual confirmation information Condition of exemption in clause 12 Schedule 1 Transitional, savings, and related provisions Page 1 2 2 2 2 2 3 3 3 4 4 5 5 6 1 Title Notice This notice is the Financial Markets Conduct (Restricted Schemes—Disclosure and Reporting) Exemption Notice 2022.
1 cl 2 2 3 4 (1) Financial Markets Conduct (Restricted Schemes— Disclosure and Reporting) Exemption Notice 2022 2022/231 Commencement This notice comes into force on 31 August 2022.

Revocation This notice is revoked on the close of 30 August 2027.
Interpretation In this notice, unless the context otherwise requires,— Act means the Financial Markets Conduct Act 2013 interest-based withdrawal benefit means an interest-based withdrawal benefit that a member receives on leaving the service of an employer before the mem‐ ber reaches the retirement benefit qualification age limit break has the meaning set out in section 167 of the Act Regulations means the Financial Markets Conduct Regulations 2014 retirement benefit qualification age means the age at which a member would ordinarily be entitled to receive a retirement benefit under a restricted scheme if they retired from service.
(2) Any term or expression that is defined in the Act or the Regulations and used, but not defined, in this notice has the same meaning as in the Act or the Regu‐ lations.

5 Transitional, savings, and related provisions The transitional, savings, and related provisions set out in Schedule 1 have effect according to their terms.
Exemption for fund updates 6 (1) Exemption for fund updates The manager of a defined benefit scheme that is a restricted scheme is exemp‐ ted from regulation 56(2) of the Regulations in respect of a period if— (a) the scheme has, in addition to providing for a defined benefit in respect of each member, either or both of the following characteristics: (i) (ii) it provides for members to receive an interest-based withdrawal benefit: it provides for members to have voluntary contribution accounts; and (b) at any time during the period, 1 or more members of the scheme are entitled to receive an interest-based withdrawal benefit or have a volun‐ tary contribution account.
(2) In this clause and clause 7, period means a 12-month period ending on the last day of a disclosure year, or the balance date of the scheme, as at which a fund 2 2022/231 Financial Markets Conduct (Restricted Schemes— Disclosure and Reporting) Exemption Notice 2022 cl 9 update would otherwise be required to be prepared under regulation 56(2) of the Regulations.
7 (1) Conditions of exemption in clause 6 This clause applies if, as at the end of the period, 1 or more members of the scheme are entitled to receive an interest-based withdrawal benefit or have a voluntary contribution account.
(2) The exemption in clause 6 is subject to the conditions that— (a) the manager includes a statement in or with the annual report to the effect that— (i) (ii) the manager is relying on this notice to not provide a fund update under regulation 56(2) of the Regulations; and the manager will instead supply alternative information to each member who is entitled to receive an interest-based withdrawal benefit or has a voluntary contribution account; and (b) the manager includes the following additional information in or with the annual report that is sent to each of those members: (i) (ii) the annual net return credited to the member’s account for the accounting period to which the annual report relates; and a pie graph or table showing, as at the balance date of that accounting period, the target asset mix of the scheme according to the asset categories specified in clause 1(4) of Schedule 4 of the Regulations.
(3) In this clause,— annual report means the annual report required by regulation 62 of the Regu‐ lations fund charges has the same meaning as in clause 2 of Schedule 4 of the Regu‐ lations net return means the rate of interest actually allocated to the member’s account after deductions for fund charges, trading expenses, and accrued tax trading expenses has the same meaning as in clause 2 of Schedule 4 of the Regulations.
Exemptions for quarterly reporting 8 Exemption for quarterly reporting of limit breaks The manager of a restricted scheme is exempted from regulation 95 of the Regulations.
9 (1) Conditions of exemption in clause 8 The exemption in clause 8 is subject to the conditions that,— 3 cl 10 Financial Markets Conduct (Restricted Schemes— Disclosure and Reporting) Exemption Notice 2022 2022/231 (a) if there has been any limit breaks in a quarter, the manager must provide to the FMA a report that contains the information set out in regulation 96(2) of the Regulations within 15 working days after the expiry of the quarter; and (b) the manager must provide to the FMA a report (report A) within 15 working days after each balance date of the scheme that— (i) (ii) states whether any limit breaks have occurred during the account‐ ing period ending on that date; and contains the information specified in regulation 96(2) of the Regu‐ lations if any limit breaks have occurred during that period; and (c) if the manager relies on regulation 96(3)(a) of the Regulations (as applied under subclause (2)), the manager must comply with regulation 96(3)(b) of the Regulations.
Regulation 96(3)(a) of the Regulations applies with all necessary modifications to a report under subclause (1)(a) or (b).
Report A is not required to include any information referred to in regulation 96(2)(d) to (i) of the Regulations if— (a) (b) the information has previously been provided to the FMA in a report that the manager is required to provide to the FMA; and report A states the date of the report in which the information was previ‐ ously provided; and (c) as at the date of report A, the information remains correct.
(2) (3) 10 Exemption for quarterly reporting of related party transaction certificates The manager of a restricted scheme is exempted from regulation 100 of the Regulations.
Conditions of exemption in clause 10 The exemption in clause 10 is subject to the conditions that,— (a) if a certificate is given under section 173(4) of the Act, the manager must, within 15 working days after the expiry of the quarter in which the certificate was given, provide to the FMA a report that— (i) (ii) states that a certificate was given; and includes a copy of the certificate; and (b) the manager must provide to the FMA a report (report A) within 15 working days after each balance date of the scheme that— (i) states whether any certificates have been given under section 173(4) of the Act during the accounting period ending on that date; and (ii) includes a copy of those certificates (if any).
11 (1) 4 2022/231 Financial Markets Conduct (Restricted Schemes— Disclosure and Reporting) Exemption Notice 2022 cl 13 (2) Report A is not required to include a copy of a certificate given under section 173(4) of the Act if— (a) (b) (c) a copy of the certificate has previously been provided to the FMA in a report that the manager is required to provide to the FMA; and report A states the date of the report in which a copy of the certificate was previously provided; and as at the date of report A, the information in the certificate remains cor‐ rect.
Exemption for annual confirmation information 12 Exemption for annual confirmation information 13 (1) (2) The manager of a defined benefit scheme that is a restricted scheme is exemp‐ ted from regulation 70B of the Regulations.

Condition of exemption in clause 12 The exemption in clause 12 is subject to the condition that the manager com‐ plies with regulations 69 and 71 of the Regulations as if the confirmation infor‐ mation that must be provided were the information set out in subclause (2).
The information that must be provided is, in relation to the accounting period that has expired and a particular member (A), the following to the extent that it is applicable: (a) (b) (c) (d) A’s voluntary contribution account balance at the start and at the end of the period: the amount of contributions credited to that account during the period: if A has not yet reached the retirement benefit qualification age, A’s interest-based withdrawal benefit as at the end of the period as calcula‐ ted under the governing document for the scheme: if A has reached the retirement benefit qualification age but is not receiving a retirement benefit, A’s retirement benefit as at the end of the accounting period as calculated under the governing document for the scheme: (e) if A is receiving a retirement benefit,— (i) the total retirement benefit payments made to A during the accounting period; and (ii) A’s retirement benefit entitlement for each payment period as at the end of the accounting period.
5 Schedule 1 Financial Markets Conduct (Restricted Schemes— Disclosure and Reporting) Exemption Notice 2022 2022/231 Schedule 1 Transitional, savings, and related provisions cl 5 Part 1 Provisions relating to this exemption as made 1 Application of exemption for fund updates Clause 6 applies in relation to a fund update if the last day of the disclosure year or the balance date of the scheme as at which the fund update would otherwise be required to be prepared occurs on or after 31 August 2022.
2 3 Application of exemptions for quarterly reporting Clauses 8 and 10 apply to reporting in respect of quarters that end on or after 31 August 2022.

Application of exemption for annual confirmation information Clause 12 applies to confirmation information in relation to accounting periods that end on or after 31 August 2022.

Dated at Wellington this 9th day of August 2022.

Liam Mason, General Counsel, Financial Markets Authority.
Statement of reasons This notice, which comes into force on 31 August 2022 and is revoked on 30 August 2027, provides exemptions for restricted schemes from certain disclosure and report‐ ing obligations under the Financial Markets Conduct Regulations 2014 (the Regula‐ tions).

The current regulatory settings require some restricted schemes to disclose information to members and to give reports to the Financial Markets Authority (the FMA).
Given the nature of these schemes, these requirements do not always provide useful information and impose unnecessary compliance costs.

The notice provides relief for certain defined benefit restricted schemes in respect of annual fund updates and confirmation information, and for all restricted schemes in respect of certain quarterly reporting requirements.

The notice includes conditions requiring alternative disclosure and reporting.
6 2022/231 Financial Markets Conduct (Restricted Schemes— Disclosure and Reporting) Exemption Notice 2022 Statement of reasons The Financial Markets Authority (the FMA), after satisfying itself as to the matters set out in section 557 of the Financial Markets Conduct Act 2013 (the Act), considers it appropriate to grant the exemptions because— • • • • • restricted schemes have different characteristics and risks than standard man‐ aged investment schemes, including that they have restricted membership or are closed to new members, and are generally smaller in asset size.
Further‐ more, restricted schemes are legacy schemes and can no longer be established under the Act: restricted schemes have different governance and reporting requirements under the Act and the Regulations because many of them are workplace savings schemes and are generally considered not-for-profit given that they are designed to be run solely for the benefit of members, and also because they are legacy schemes with decreasing and easily identified membership: given the different nature and characteristics of restricted schemes, some of the disclosure and reporting required under the Regulations is less relevant to members of these schemes.
These requirements also impose unnecessary com‐ pliance costs on restricted schemes given that the information is not useful to members and that these costs are higher relative to the size of the schemes.
The alternative requirements set out in conditions to this notice ensure more appro‐ priate and meaningful information is provided to restricted scheme members: for these reasons, the FMA is satisfied that granting the exemptions is desirable in order to promote the purposes of the Act, specifically to avoid unnecessary compliance costs, to promote flexibility in the financial markets, and to ensure that timely, accurate, and understandable information is provided to persons to assist those persons to make decisions relating to financial products (requiring appropriate alternative disclosure and reporting): the FMA is also satisfied that the exemptions are not broader than reasonably necessary to address the matters that gave rise to them, given that the exemp‐ tions are limited to restricted schemes and impose alternative disclosure and reporting obligations.
Furthermore, the exemption relating to annual fund updates is limited to defined benefit restricted schemes that have members who are entitled to receive an interest-based withdrawal benefit or who have a vol‐ untary contribution account, but where the primary benefit applying on retire‐ ment is defined.

Issued under the authority of the Legislation Act 2019.

Date of notification in Gazette: 12 August 2022.

This notice is administered by the Financial Markets Authority.
Wellington, New Zealand: Published under the authority of the New Zealand Government—2022 7