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MEMORANDUM OF UNDERSTANDING BETWEEN 

THE UNITED STATES COMMODITY FUTURES TRADING COMMISSION 

AND THE 

NEW ZEALAND SECURITIES COMMISSION 

ON CONSULTATION AND 

MUTUAL ASSISTANCE FOR THE EXCHANGE OF INFORMATION 

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The United States Commodity Futures Trading Commission and the New Zealand Securities 

Commission (collectively "the Authorities"). recognizing the increasing international activity 

in the futures and options markets and the corresponding need for mutual cooperation as a 

means for improving their effectiveness in administering and enforcing the futures and options 

laws and regulations of their respective countries, have reached the following understanding. 

The following understanding does not create any binding legal obligations. 

1: DEFINITIONS 

For the purposes of this Memorandwn of Understanding (Mernorandwn): 

1.1 "Authority" means: 

1.1.1 the United States Commodity Futures Trading Commission ("CFTC"); 

or 

1.1.2 the New Zealand Securities Commission ("NZSC"). 

1.2 "Requested Authority" means an Authority to whom a request under this 

Memorandum is made. 

1.3 "Requesting Authority" means an Authority making a request under this 

Memorandum. 

1.4 "person" means: a natural person, unincorporated association, partnership or 

body corporate; or a government, government subdivision, agency, 

instrumentality of a government, or any equivalent authority. 

1.5 "futures business" means any business undertaken by any person who is 

involved, in whole or in part, in: effecting transactions in futures and options 

for the accounts of others or soliciting sUch transactions; buying and selling 

futures and options for one's own account; advising others for compensation--

either directly or through publications, writings, or electronic media -- as to the 

desirability of trading in, purchasing or selling futures and options; the 

managing, promoting, offering or selling of any collective investment scheme 

involving futures or options; or equivalent activities conducted by persons or 

entities; and includes persons acting in the capacity of commodity trading 

advisors, commodity pool operators, futures commission merchants, introducing 

brokers, associated persons or floor brokers, and floor traders. 

1.6 "futures processing business" means a clearing organization. 

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1.7 "futures transaction" means a transaction in futures or options that is 

regulated or subject to regulation by the Authorities whether transacted on or 

subject to the rules of an exchange or market or over-the-counter. 

1.8 "laws or regulations" means the laws of the-United States and New Zealand 

and regulations promulgated thereunder concerning, by way of example: 

1.8.1 insider trading, misrepresentation or the use of fraudulent, deceptive or 

manipulative practices in connection with the offer, purchase or sale of 

any futures or options contract or the conduct of futures businesses or 

futures transactions; 

1.8.2 the duties of persons to comply with reporting requirements; 

1.8.3 the making of a false or misleading statement or any material omission 

in any application or report made to the Authorities; 

1.8.4 the duties of persons or future's businesses to make full and fair 

disclosure of information to futures market participants in connection 

with futures transactions; 

1.8.5 the duties of futures businesses and futures processing businesSes 

pertaining to financial, operational or other requirements and duties of 

fair dealing in the offer and sale of futures and options, the execution of 

transactions and the conduct of their businesses; 

1.8.6 the financial and other qualifications of those engaged in, or in control 

of, futures businesses or futures processing businesses; and 

1.8.7 any other futures or options matters or _manipulative acts or practices 

that fall Wider the jurisdiction of the Authorities. 

2: MUTUAL ASSISTANCE FOR THE EXCHANGE OF INFORMATION 

2.1 General Principles 

2.1.1 This Memorandum sets forth a statement of intent of the Authorities 

regarding the exchange of information between the Authorities for the 

purpose of enhancing the Authorities' ability to enforce or administer 

the laws or regulations of their respective jurisdictions. 

2.1.2 Nothing in this Memorandwn is intended to limit or enhance the powers 

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of the CFTC under the laws of the United States or the powers of the 

NZSC under the laws of New Zealand: 

(a) to investigate or gather information otherwise than as-provided in 

this Memorandum, whether or not in connection with a request under 

this Memorandum; 

(b) to disclose information, except that an Authority will follow the 

steps in 2.5 and 2.6 when it is going to disclose information received 

under this Memorandum. 

2.1.3 The provisions of this Memorandum do not give rise to a right, directly 

or indirectly, on the part of any person, other than the Authorities, to 

obtain, suppress or exclude any evidence or to challenge the execution 

of a request for assistance under this Memorandum. 

2.2 Scope of Assistance 

2.2.1 The Requested Authority will provide to the Requesting Authority the 

fullest assistance possible, within the framework of this Memorandum 

and to the extent permissible under the laws of the Requested Authority, 

in response to any request concerning matters within the jurisdiction of 

the Requesting Authority. 

2.2.2 Assistance available pursuant to this Memorandum includes, but is not 

limited to: 

(a) providing access to information in the files of the Requested 

Authority; 

(b) taking testimony and statements of persons; 

(c) obtaining information and documents from persons; and 

(d) conducting compliance inspections or examinations of futures 

transactions and futures businesses. 

2.2 .3 Assistance under this Memorandum may be denied by the Requested 

Authority: 

(a) where the request would require the Requested Authority to act 

in a manner that would violate the laws of the State of the 

Requested Authority; 

(b) where the request is not in accordance with the provisions set 
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forth in this Memorandum; or 

(c) on the grounds of national security or essential public i?terest. 

2.3 Requests for Assistance 

2.3.1 Requests for assistance are to be made in writing and addressed to the 

Requested Authority's contact officer(s) listed in Appendix A. 

2.3.2 A request for assistance will include the following: 

(a) a general description of both the matter which is the subject of 

the request and the purpose for which the information is sought; 

(b) a general description of the assistance, docwnents, information, 

testimony, and statements of persons sought by the Requesting 

Authority; 

(c) information in the possession of the Requesting Authority that 

might assist the Requested Authority in identifying the persons 

or entities believed by the Requesting Authority to possess the 

information sought, or the places where such information may be 

obtained; 

(d) the laws or regulations pertaining to the matter that is the subject 

of the request; and 

(e) the desired time period for the reply and, where appropriate, the 

urgency thereof. 

2.3.3 In the event of urgency, a request for assistance and reply thereto will 

be expedited to the extent possible and may be effected initially by 

means of communication other than the exchange of letters, provided 

that it is confirmed as prescribed in 2.3.1 and 2.3.2. 

2.4 Execution of Requests 

2.4.1 Access to information held in the files of the Requested Authority will 

be provided upon request of the Requesting Authority pursuant to 2.3. 

2.4.2 When requested by the Requesting Authority, the Requested Authority 

will take the testimony or statements of persons who, directly or 

indirectly, are involved in the activities that are the subject of the 

request or are holding information that may assist in carrying out the 

request. The Requesting Authority may, in its discretion, request that 
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testimony or statements be taken from specific persons. The Requesting 

Authority may also seek to have the Requested Authority require 

production of other evidence. 

2.4.3 Execution of a request under this Memorandwn, including obtaining 

testimony or statements or gathering docwnents, will be conducted in 

accordance with the procedures and laws of the Requested Authority 

and by persons designated by the Requested Authority, unless otherwise 

agreed by the Authorities. 

2.4.4 A person whose statement is taken pursuant to a request will have the 

right to have counsel present during the taking of the statement. 

2.4.5 Notwithstanding any other provision of this Memorandum, any person 

providing testimony, statements, information or documents as a result of 

a request made under this Memorandwn will be entitled to all the rights 

and privileges applicable under the laws of the State of the Requested 

Authority. Assertions regarding rights and privileges arising exclusively 

pursuant to the laws of the State of the Requesting Authority will be 

preserved for consideration by the courts in the State of the Requesting 

Authority. 

2.4.6 Notwithstanding 2.4.3, when requested by the Requesting Authority, 

testimony or statements will be taken under oath and a transcript will be 

made. In addition, subject to approval by the Requested Authority, 

representatives of the Requesting Authority may be present at the taking 

of testimony or statements and may specify particular questions to be 

asked of any witness. To the extent permitted by law, a representative 

of the Requesting Authority may also pose specific questions to any 

witness. 

2.4.7 When requested by the Requesting Authority, an inspection or 

examination will be conducted of the books and records concerning 

futures transactions and futures businesses. In addition, to the extent 

permitted by the law of the Requested Authority, a representative of the 

Requesting Authority may be present at the inspection or examination 

and, subject to approval by the Requested Authority, may participate in 

the inspection or examination. 

2.4.8 If it appears that responding to a request for assistance under this 

Memorandum will involve substantial costs to the Requested Authority, 

the Authorities will together establish a cost sharing arrangement before 

the Requested Authority continues to respond to such request for 

assistance. 

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2.5 Permissible Uses of Information 

2.5.1 The Requesting Authority may use the information furnished solely: 

(a) for purposes stated in the request, including ensuring compliance 

with or enforcement of the laws or regulations specified in the 

request and related provisions; and 

(b) for purposes within the general framework of the use stated in 

the request, including conducting a civil or administrative 

enforcement proceeding, market oversight and market 

surveillance, assisting in a criminal prosecution, or conducting 

any investigation related thereto for any general charge 

applicable to the violation· of the law or regulation specified in 

the request. 

2.5.2 To use the information furnished for any purpose other than those stated 

in 2.5.1, the Requesting Authority will first inform the Requested 

Authority of its intention and provide the Requested Authority an 

opportunity to oppose the utilization. If the Requested Authority 

opposes the utilization, the information may be used only under the 

conditions imposed by the Requested Authority. If usc of the 

information is opposed by the Requested Authority, the Authorities will 

consult pursuant to 2. 7 concerning the reasons for the refusal ind the 

circumstances under which use of the information might otherwise be 

allowed. 

2.5.3 Notwithstanding 2.5.1, the Authorities understand that laws of the 

United States and New Zealand may place limitations on disclosure of 

non-public information obtained pursuant to this Memorandum. 

2.6 Confidentiality 

2.6.1 Each Authority will keep confidential, to the extent permitted by law, 

requests made under this Memorandum, the contents of such requests 

and any other matters arising during the operation of this Memorandum, 

including consultations between the Authorities. However, disclosures 

that are absolutely necessary to carry out the requests are permitted, and 

confidentiality may be waived by mutual agreement of the Authorities. 

2.6.2 The Requesting Authority will keep confidential to the extent permitted 

by its law any information received pursuant to this Memorandum, 

unless it is disclosed in accordance with 2.5. 

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2.6.3 Except as contemplated by 2.5 and 2.6.1, the Requesting Authority will 

not disclose the information to any other person and will use its best 

efforts to ensure that the information is not obtained by any other 

person. However, unless otherwise agreed, if such informatien is 

obtained by a public authority, the Requesting Authority will use its best 

efforts to ensure that such information is not used by that public 

authority in any way that involves disclosure to any other person. 

2.6.4 The Requesting Authority will notify the Requested Authority of any 

legally enforceable demand for information it receives pursuant to this 

Memorandum prior to complying with the demand, and will assert such 

appropriate legal exemptions or privileges with respect to such 

information as may be available. 

2. 7 Consultations 

2.7.1 The Authorities will keep the operation of this Memorandum under 

continuous review and will consult with a view to improving its 

operation and resolving any matters that may arise. In particular, the 

Authorities will consult upon request in the event of: 

(a) a decision by one Authority to decline a request for information 

or, pursuant to 2.5.2, to decline to consent to a proposed use of 

information that has been obtained under this Memorahdwn; 

(b) a change in market or business conditions or in the legislation 

governing matters within the jurisdiction of either Authority, or 

any difficulty which may make it necessary to amend or extend 

this Memorandum in order to achieve its purposes; or 

(c) a misunderstanding regarding the meaning of any terms used in 

this Memorandum. 

2.7.2 The Authorities may implement such practical measures as may be 

necessary to facilitate the purposes of this Memorandum. 

2.8 Unsolicited Assistance 

To the extent permitted by the laws and regulations of its jurisdiction, each Authority 

will use reasonable efforts to provide to the other Authority any information it discovers 

which gives rise to a suspicion of a breach, or anticipated breach, of the laws or regulations of 

the other Authority. 

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3: FINAL PROVISIONS 

3.1 Effective Date 

Cooperation under this Memorandum will begin immediately upon signature. 

3.2 Termination 

The Authorities intend for cooperation under this Memorandum to continue until the 

expiration of 30 days after either Authority gives written notice to the other Authority of its 

intention to discontinue the cooperation. If such notice is given, cooperation in accordance 

with this Memorandum will continue with respect to all requests for assistance that were made 

before the effective date of notification until the Reque-sting Authority terminates the matter 

for which assistance was requested. 

Signed at 

FOR THE: 

UNITED STATES COMMODITY 

FUTURES TRADING COMMISSION 

~~ BROOKSEL Y E. B RN 

CHAIRPERSON 

NEW ZEALAND 

SECURITIES COMMISSION 

' ( 

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' 

E.H. ABERNETHY 

CHAIRMAN