Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Act 2019

1: Title
This Act is the Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Act 2019.
2: Commencement
1: Part 1
2: The rest of this Act comes into force on a date appointed by the Governor-General by Order in Council.
3: One or more orders may be made under subsection (2) bringing different provisions into force on different dates.
4: Any provision that has not earlier been brought into force comes into force on 30 August 2021 Section 2(2) brought into force 14 March 2021 clause 2 Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Act Commencement Order 2020 Section 2(4) amended 16 May 2020 section 3 COVID-19 Response (Further Management Measures) Legislation Act 2020
1: Amendments relating to derivative margins
1: Amendments to Reserve Bank of New Zealand Act 1989
3: Principal Act
This subpart amends the Reserve Bank of New Zealand Act 1989 principal Act 2019-08-31 Reserve Bank of New Zealand Act 1989
4: Section 122 amended (Moratorium)
After section 122(9)
9A: Nothing in subsection (1) limits or prevents the exercise of any rights to enforce a security interest over collateral to the extent that the security interest secures payment or performance of an obligation under or in relation to a qualifying derivative if—
a: the counterparties to the derivative are—
i: 2 qualifying counterparties; or
ii: a qualifying counterparty and an overseas person; and
b: before the exercise of the rights, the collateral is transferred or otherwise dealt with so as to be in the possession or under the control of—
i: the enforcing counterparty; or
ii: another person (who is not the grantor) on behalf of the enforcing counterparty, under the terms of an arrangement evidenced in writing; and
c: the rights are exercised after the specified time.
9B: See sections 122A to 122E subsection (9A)
5: New sections 122A to 122E inserted
After section 122
122A: Definitions of terms relating to qualifying derivatives
1: For the purposes of sections 122(9A), 122B, 122C, 122D, and 122E collateral
a: a financial product:
b: gold, silver, or platinum:
c: a document of title, a chattel paper, an investment security, money, a negotiable instrument, or an intangible (with terms and expressions used in this paragraph having the same meanings as in section 16(1) of the Personal Property Securities Act 1999):
d: if a person (an intermediary paragraphs (a) to (c)
e: the proceeds of property of a kind specified in any of paragraphs (a) to (d) default time derivative intermediated collateral paragraph (d) overseas person
a: a natural person who is not ordinarily resident in New Zealand; or
b: an entity (within the meaning of section 6(1) of the Financial Markets Conduct Act 2013) that is incorporated or established outside New Zealand possession section 122B section 173(1)﻿(fc) and (fd) proceeds paragraphs (a) to (d) qualifying counterparty
a: a registered bank; or
b: the Accident Compensation Corporation (as continued by section 259 of the Accident Compensation Act 2001); or
c: the Guardians of New Zealand Superannuation established under section 48 of the New Zealand Superannuation and Retirement Income Act 2001; or
d: a specified operator; or
e: any prescribed entity; or
f: any other entity of a prescribed class qualifying derivative
a: the derivative is subject to—
i: a netting agreement to which sections 310A to 310O of the Companies Act 1993 or sections 255 to 263 of the Insolvency Act 2006 apply; or
ii: netting under the rules of a designated settlement system; and
b: the enforcing counterparty’s interest in the collateral is evidenced in writing security interest specified time
a: the default time; or
b: an earlier or a later time specified by the Bank in a notice issued under section 122C
2: For the purposes of the definition of overseas person, a natural person is ordinarily resident in New Zealand
a: is domiciled in New Zealand; or
b: is living in New Zealand and the place where that person usually lives, and has been living for the immediately preceding 12 months, is in New Zealand, whether or not that person has on occasions been away from New Zealand during that 12-month period.
122B: Matters relating to possession or control of collateral
1: For the purposes of section 122(9A)﻿(b)
a: collateral must be taken not to be in the possession or under the control of the enforcing counterparty if,—
i: under the security interest, the grantor is free to deal with the collateral in the ordinary course of business until the enforcing counterparty’s interest in the collateral becomes fixed and enforceable; or
ii: regulations made under section 173(1)﻿(fc)
b: intermediated collateral must be taken to be in the possession of the enforcing counterparty if that counterparty is the person in whose name the intermediary maintains the account:
c: intermediated collateral must be taken to be under the control of the enforcing counterparty if subsection (3)
d: collateral must be taken to be in the possession or under the control of the enforcing counterparty if regulations made under section 173(1)﻿(fc)
2: Subsection (1)﻿(a)﻿(i)
3: For the purposes of subsection (1)﻿(c)
a: the intermediary is not the grantor (but may be the enforcing counterparty or any other person); and
b: there is an agreement in force between the intermediary and 1 or more other persons, 1 of which is the enforcing counterparty or the grantor; and
c: the agreement has 1 or more of the following effects:
i: the person in whose name the intermediary maintains the account is not able to transfer or otherwise deal with the collateral:
ii: the intermediary must not comply with instructions given by the grantor in relation to the collateral without seeking the consent of the enforcing counterparty (or a person who has agreed to act on the instructions of the enforcing counterparty):
iii: the intermediary must comply, or must comply in 1 or more specified circumstances, with instructions (including instructions to debit the account) given by the enforcing counterparty in relation to the collateral without seeking the consent of the grantor (or any person who has agreed to act on the instructions of the grantor).
4: Subsections (1)﻿(a)﻿(i), (b), and (c), (2), and (3) section 122A(1) section 173(1)﻿(fc) and (fd)
5: The fact that a grantor retains a right of 1 or more of the following kinds does not by itself stop section 122(9A)﻿(b)
a: a right to receive and withdraw income in relation to the collateral:
b: a right to receive notices in relation to the collateral:
c: a right to vote in relation to the collateral:
d: a right to substitute other collateral that the parties agree is of equivalent value for the collateral:
e: a right to withdraw excess collateral:
f: a right to determine the value of collateral.
122C: Bank may reduce or extend stay on exercise of rights to enforce security interest over collateral
1: This section and section 122D section 122(9A) A
2: The Reserve Bank may, before the default time, issue a notice that states that the rights referred to in section 122(9A)
3: The time that is specified may be—
a: before the default time; or
b: after the default time if the Bank is satisfied of all of the matters set out in section 122D
4: The notice may relate to all rights referred to in section 122(9A)
5: Despite section 140(2)﻿(b), this section applies to an associated person or a subsidiary of a registered bank only if the associated person or subsidiary is itself a registered bank.
122D: Matters Bank must be satisfied of under section 122C(3)﻿(b)
The matters referred to in section 122C(3)﻿(b)
a: A is able to meet all of the following liabilities as and when those liabilities become due and payable:
i: A’s liabilities under all netting agreements to which sections 310A to 310O of the Companies Act 1993 or sections 255 to 263 of the Insolvency Act 2006 apply:
ii: A’s liabilities in respect of security interests over collateral to the extent that the security interests secure payment or performance of obligations under or in relation to qualifying derivatives:
iii: A’s liabilities that are subject to netting under the rules of a designated settlement system; and
b: A is able to pay its debts as they become due in the normal course of business; and
c: either—
i: A complies with the minimum capital requirements (if any) to which it is subject under conditions imposed under section 74; or
ii: there are satisfactory arrangements in place to ensure that A meets all of its liabilities referred to in paragraph (a) subparagraph (i)
122E: Publication and status of notice under section 122C
1: The Bank must, as soon as practicable,—
a: publish any notice issued under section 122C
b: notify the issue of the notice in the Gazette
2: The notice may take effect at any time after it is published under subsection (1)﻿(a)
3: The notice is neither a legislative instrument nor a disallowable instrument for the purposes of the Legislation Act 2012 and does not have to be presented to the House of Representatives under section 41 of that Act.
4: The notice cannot be varied or revoked.
6: Section 134 amended (Sale of property or assets subject to a security)
1: After section 134(6)﻿(c)
d: is not a security interest referred to in subsection (8)
2: After section 134(7)
8: For the purposes of subsection (6)﻿(d)
a: the counterparties to the derivative are—
i: 2 qualifying counterparties; or
ii: a qualifying counterparty and an overseas person; and
b: before the exercise of rights to enforce the security interest, the collateral is transferred or otherwise dealt with so as to be in the possession or under the control of—
i: the enforcing counterparty; or
ii: another person (who is not the grantor) on behalf of the enforcing counterparty, under the terms of an arrangement evidenced in writing.
9: Terms and expressions defined in section 122A subsection (8)
10: Section 122B subsection (8)﻿(b) section 122(9A)﻿(b) subsection (8)﻿(b)
7: Section 173 amended (Regulations)
1: After section 173(fa)
fb: prescribing entities and classes of entities for the purposes of the definition of qualifying counterparty in section 122A
fc: providing for when collateral must or must not be taken to be in the possession or under the control of a person for the purposes of section 122(9A)﻿(b) section 122B
fd: providing that section 122B(1)﻿(a)﻿(i), (b), or (c)
2: In section 173
2: Regulations under subsection (1)﻿(fb) to (fd)
a: the Minister; and
b: the Minister of the Crown who, under the authority of any warrant or with the authority of the Prime Minister, is responsible for the administration of the Companies Act 1993.
3: The Ministers may make a recommendation under subsection (2)
a: had regard to the matters set out in subsection (4)
b: consulted the persons (or representatives of the persons) that the Ministers consider will be substantially affected by the regulations, and those persons have had the opportunity to comment to the Ministers.
4: The Ministers must have regard to the following under subsection (3)﻿(a)
a: the purposes of this Act, the Companies Act 1993, the Corporations (Investigation and Management) Act 1989, the Personal Property Securities Act 1999, the Property Law Act 2007, and the Receiverships Act 1993:
b: the effect of the regulations on—
i: the maintenance of a sound and efficient financial system; and
ii: the creditors of qualifying counterparties; and
iii: the integrity of statutory management, corporate insolvency, and personal property securities law.
8: Schedule 1 amended
In Schedule 1, after Part 1 Schedule 1
2: Amendments to Companies Act 1993
9: Principal Act
This subpart amends the Companies Act 1993 principal Act 2019-08-31 Companies Act 1993
10: New section 239ABMA inserted (Enforcement of security interest over collateral for qualifying derivative)
After section 239ABM
239ABMA: Enforcement of security interest over collateral for qualifying derivative
1: Nothing in sections 239ABC, 239ABD, 239ABE, and 239ABG limits or prevents any person referred to in subsection (2)
a: the counterparties to the derivative are—
i: 2 qualifying counterparties; or
ii: a qualifying counterparty and an overseas person; and
b: before enforcement, the collateral is transferred or otherwise dealt with so as to be in the possession or under the control of—
i: the secured creditor; or
ii: another person (who is not the company that granted the security interest) on behalf of the secured creditor, under the terms of an arrangement evidenced in writing.
2: The persons are—
a: the secured creditor:
b: a receiver or person appointed as mentioned in paragraph (a), (b), or (d) of the definition of enforce in section 239ABK as that definition applies in relation to the security interest, or any of the security interests (even if appointed after the decision period).
3: Terms and expressions defined in section 122A subsection (1)
4: Section 122B subsection (1)﻿(b)
a: treating references to section 122(9A)﻿(b) subsection (1)﻿(b)
b: treating references to the enforcing counterparty as references to the secured creditor; and
c: treating references to the grantor as references to the company that granted the security interest.
11: Schedule 1AA amended
In Schedule 1AA, after Part 1 Schedule 2
12: Consequential amendment to Insolvency Practitioners Regulation (Amendments) Act 2019
1: This section amends the Insolvency Practitioners Regulation (Amendments) Act 2019
2: Replace section 57
57: New Part added to Schedule 1AA
In Schedule 1AA,—
a: insert the Part set out in Schedule 1 of this Act as the last part in Schedule 1AA; and
b: make all necessary consequential amendments. 2019-08-31 Insolvency Practitioners Regulation (Amendments) Act 2019
13: Schedule 7 amended
1: In Schedule 7, after clause 2(1)﻿(b)﻿(i)﻿(C)
D: is not a security interest referred to in subclause (3A)
2: In Schedule 7, clause 2(2) subclause (1)﻿(b) subclauses (1)﻿(b) and (3A)
3: In Schedule 7, after clause 2(3)
3A: For the purposes of subclause (1)﻿(b)﻿(i)﻿(D)
a: the counterparties to the derivative are—
i: 2 qualifying counterparties; or
ii: a qualifying counterparty and an overseas person; and
b: before enforcement of the interest, the collateral is transferred or otherwise dealt with so as to be in the possession or under the control of—
i: the enforcing counterparty; or
ii: another person (who is not the company that granted the security interest) on behalf of the enforcing counterparty, under the terms of an arrangement evidenced in writing.
3B: Terms and expressions defined in section 122A subclause (3A)
3C: Section 122B subclause (3A)﻿(b) section 122(9A)﻿(b) subclause (3A)﻿(b)
3: Amendments to Corporations (Investigation and Management) Act 1989
14: Principal Act
This subpart amends the Corporations (Investigation and Management) Act 1989 principal Act 2019-08-31 Corporations (Investigation and Management) Act 1989
15: New section 2A inserted (Transitional, savings, and related provisions)
After section 2
2A: Transitional, savings, and related provisions
The transitional, savings, and related provisions set out in Schedule 1
16: Section 42 amended (Moratorium)
After section 42(9)
10: Nothing in subsection (1) limits or prevents the exercise of any rights to enforce a security interest over collateral to the extent that the security interest secures payment or performance of an obligation under or in relation to a qualifying derivative if—
a: the counterparties to the derivative are—
i: 2 qualifying counterparties; or
ii: a qualifying counterparty and an overseas person; and
b: before the exercise of the rights, the collateral is transferred or otherwise dealt with so as to be in the possession or under the control of—
i: the enforcing counterparty; or
ii: another person (who is not the corporation that granted the security interest) on behalf of the enforcing counterparty, under the terms of an arrangement evidenced in writing.
11: Terms and expressions defined in section 122A subsection (10)
12: Section 122B subsection (10)﻿(b) section 122(9A)﻿(b) subsection (10)﻿(b)
17: Section 51 amended (Sale of property or assets subject to a security)
1: After section 51(2)﻿(b)﻿(i)﻿(A)
AB: is not a security interest referred to in subsection (8)
2: Replace section 51(2)﻿(b)﻿(ii)
ii: proceeds of inventory that are subject to a security interest that—
A: is not a purchase money security interest that has been perfected at the time specified in section 74 of the Personal Property Securities Act 1999; and
B: is not a security interest referred to in subsection (8)
3: After section 51(6)﻿(c)
d: is not a security interest referred to in subsection (8)
4: After section 51(7)
8: For the purposes of subsections (2)﻿(b)﻿(i)﻿(AB) and (ii)﻿(B) and (6)﻿(d)
a: the counterparties to the derivative are—
i: 2 qualifying counterparties; or
ii: a qualifying counterparty and an overseas person; and
b: before the exercise of rights to enforce the security interest, the collateral is transferred or otherwise dealt with so as to be in the possession or under the control of—
i: the enforcing counterparty; or
ii: another person (who is not the corporation that granted the security interest) on behalf of the enforcing counterparty, under the terms of an arrangement evidenced in writing.
9: Terms and expressions defined in section 122A subsection (8)
10: Section 122B subsection (8)﻿(b) section 122(9A)﻿(b) subsection (8)﻿(b)
18: Schedule replaced
1: Replace the Schedule Schedule 3
2: Section 73
4: Amendments to Personal Property Securities Act 1999
19: Principal Act
This subpart amends the Personal Property Securities Act 1999 principal Act 2019-08-31 Personal Property Securities Act 1999
20: New section 21A inserted (Transitional, savings, and related provisions)
Before section 22
21A: Transitional, savings, and related provisions
The transitional, savings, and related provisions set out in Schedule 1AA
21: New section 103B and cross-heading inserted
After section 103A Priority of interests under qualifying derivatives
103B: Priority of interests under qualifying derivatives
1: The security interest of a person (the enforcing counterparty
a: the counterparties to the derivative are—
i: 2 qualifying counterparties; or
ii: a qualifying counterparty and an overseas person; and
b: before the enforcement of the security interest, the collateral is transferred or otherwise dealt with so as to be in the possession or under the control of—
i: the enforcing counterparty; or
ii: another person (who is not the debtor that granted the security interest) on behalf of the enforcing counterparty, under the terms of an arrangement evidenced in writing.
2: Terms and expressions defined in section 122A section 122A
3: Section 122B section 122(9A)﻿(b) subsection (1)﻿(b)
4: This section overrides anything in this Act to the contrary (other than section 103A).
22: New Schedule 1AA inserted
Insert the Schedule 1AA set out in Schedule 4
5: Amendments to Property Law Act 2007
23: Principal Act
This subpart amends the Property Law Act 2007 principal Act 2019-08-31 Property Law Act 2007
24: New section 6A inserted (Transitional, savings, and related provisions)
After section 6
6A: Transitional, savings, and related provisions
The transitional, savings, and related provisions set out in Schedule 1AA
25: Section 153 amended (Preferential claims)
1: After section 153(1)﻿(a)﻿(iii)
iv: is not a security interest referred to in subsection (7)
2: Replace section 153(2)﻿(b)
b: secondly, to the payment of amounts secured by—
i: any perfected purchase money security interest over the accounts receivable or inventory concerned, or any perfected security interest arising from a transfer of accounts receivable for new value over the accounts receivable concerned, to the extent that it has priority over the mortgagee’s mortgage and, in the case of the application of income, so far as payment is then due; or
ii: any security interest referred to in subsection (7)
3: After section 153(6)
7: For the purposes of subsections (1)﻿(a)﻿(iv) and (2)﻿(b)﻿(ii)
a: the counterparties to the derivative are—
i: 2 qualifying counterparties; or
ii: a qualifying counterparty and an overseas person; and
b: before enforcement of the security interest, the collateral is transferred or otherwise dealt with so as to be in the possession or under the control of—
i: the enforcing counterparty; or
ii: another person (who is not the person who granted the security interest) on behalf of the enforcing counterparty, under the terms of an arrangement evidenced in writing.
8: Terms and expressions defined in section 122A subsection (7)
9: Section 122B subsection (7)﻿(b) section 122(9A)﻿(b) subsection (7)﻿(b)
26: New Schedule 1AA inserted
Insert the Schedule 1AA set out in Schedule 5
6: Amendments to Receiverships Act 1993
27: Principal Act
This subpart amends the Receiverships Act 1993 principal Act 2019-08-31 Receiverships Act 1993
28: New section 3A inserted (Transitional, savings, and related provisions)
After section 3
3A: Transitional, savings, and related provisions
The transitional, savings, and related provisions set out in Schedule 1AA
29: Section 30 amended (Preferential claims)
1: After section 30(1)﻿(c)
d: is not a security interest referred to in subsection (6)
2: After section 30(2)﻿(b)﻿(ii)
iii: a security interest referred to in subsection (6)
3: After section 30(5)
6: For the purposes of subsections (1)﻿(d) and (2)﻿(b)﻿(iii)
a: the counterparties to the derivative are—
i: 2 qualifying counterparties; or
ii: a qualifying counterparty and an overseas person; and
b: before enforcement of the security interest, the collateral is transferred or otherwise dealt with so as to be in the possession or under the control of—
i: the enforcing counterparty; or
ii: another person (who is not the company that granted the security interest) on behalf of the enforcing counterparty, under the terms of an arrangement evidenced in writing.
7: Terms and expressions defined in section 122A subsection (6)
8: Section 122B subsection (6)﻿(b) section 122(9A)﻿(b) subsection (6)﻿(b)
30: New Schedule 1AA inserted
Insert the Schedule 1AA set out in Schedule 6
31: Consequential amendments to Insolvency Practitioners Regulation (Amendments) Act 2019
1: This section amends the Insolvency Practitioners Regulation (Amendments) Act 2019
2: In the heading to section 61 sections 3A and section
3: In section 61 sections are inserted after section 3 section is inserted after section 3A
4: In section 61
5: Replace section 76
76: New Part inserted in Schedule 1AA
In Schedule 1AA,—
a: insert the Part set out in Schedule 3 of this Act as the last part in Schedule 1AA; and
b: make all necessary consequential amendments.
6: Replace the Schedule 3
3: s 76 New Part inserted in Schedule 1AA
7: In Schedule 3 2019-08-31 Insolvency Practitioners Regulation (Amendments) Act 2019
2: Amendments relating to financial benchmarks
32: Principal Act
This Part amends the Financial Markets Conduct Act 2013 principal Act OIC LI 2020/314 2021-03-14 Financial Markets Conduct Act 2013 Remaining provisions brought into force
33: Section 6 amended (Interpretation)
1: In section 6(1) market service
g: acting as an administrator of a financial benchmark
2: In section 6(1) administrator of a financial benchmark contributor section 448C(4) financial benchmark subsections (6) and (7)
3: After section 6(5)
6: In this Act, a financial benchmark
a: referenced or otherwise used for purposes that include 1 or more of the following:
i: calculating the interest, or other amounts, payable under financial products or other securities:
ii: calculating the price at which a financial product or other security may be traded, redeemed, or dealt in:
iii: calculating the value of a financial product or other security:
iv: measuring the performance of a financial product or other security; and
b: made available to users (whether or not for a fee); and
c: generated periodically from 1 or more—
i: transactions, instruments, currencies, prices, estimates, rates (including an interest rate or exchange rate), indices, values, financial products or other securities; or
ii: other interests or property (whether tangible or intangible).
7: A financial benchmark
34: Section 18 amended (Interpretation in this Part)
In section 18 financial product
b: includes, for the purposes of any provision of this Part or section 464,—
i: any class or classes of financial product (within the meaning of section 5 of the Financial Advisers Act 2008) declared by the regulations to be a financial product for the purposes of that provision; and
ii: any security of a kind referred to in section 6(6)﻿(c)
35: Section 351 amended (Regulations modifying this Part or Part 7 for licensed markets)
In section 351(1)﻿(ab) 451(d) 451(1)﻿(d)
36: Section 386 amended (Overview)
After section 386(1)﻿(g)
ga: subpart 7A
37: Section 390 amended (When providers of other market services may be licensed)
Replace section 390(1)
1: In addition, a person may hold a market services licence—
a: to act as a provider of prescribed intermediary services (for example, a person-to-person lending intermediary or a crowd funding intermediary if prescribed by regulations); or
b: to act as an administrator of a financial benchmark.
38: Section 393 amended (Principles guiding the exercise of FMA powers)
Replace section 393(a)
a: exercising the power must be necessary or desirable in order to promote 1 or more of the following:
i: either or both of the main purposes specified in section 3:
ii: any of the additional purposes specified in section 4:
iii: in the case of a market services licence to act as an administrator of a financial benchmark, either or both of the additional purposes specified in section 448B
39: Section 396 amended (When licence must be issued)
After section 396(f)
g: in the case of an application for a licence to act as an administrator of a financial benchmark, the issue of a licence is necessary or desirable in order to promote either or both of the additional purposes set out in section 448B
40: Section 403 amended (When FMA may impose permitted conditions)
1: In section 403(2) subsection (3) subsections (3) to (5)
2: After section 403(3)
5: In the case of a licence to act as an administrator of a financial benchmark, a condition referred to in subsection (1) may also impose conditions to achieve the purposes set out in section 448B
41: Section 410 amended (Meaning of material change of circumstances)
In section 410(b) (f) (g)
42: Section 414 amended (FMA’s powers in case of contravention of market services licensee obligation, material change, etc)
In section 414(3)﻿(b) (f) (g)
43: New subpart 7A of Part 6 inserted
After section 448
7A: Additional regulation of licences relating to financial benchmarks
448A: Application of subpart
This subpart applies to market services licences to act as an administrator of a financial benchmark.
448B: Additional purposes for licences relating to financial benchmarks
1: In relation to market services licences to act as an administrator of a financial benchmark, this Part has the purposes (in addition to those set out in sections 3 and 4) of—
a: ensuring the accuracy, integrity, and reliability of financial benchmarks, and providing for their continued availability, to support the purposes set out in sections 3 and 4; and
b: promoting the recognition of New Zealand financial benchmarks in overseas jurisdictions by ensuring that—
i: those benchmarks comply with applicable international requirements; and
ii: an administrator of a financial benchmark is subject to effective regulation when generating and operating those benchmarks; and
iii: those benchmarks may be referenced or otherwise used in international instruments.
2: This section does not limit section 3 or 4.
448C: FMA’s powers to direct contributor to provide information or data
1: The FMA may exercise a power under subsection (2)
a: a contributor has ceased or is likely to cease providing or making available information or data relevant to the generation or operation of the financial benchmark specified in a licence; and
b: it is necessary or desirable in order to promote any of the purposes set out in section 448B
2: The FMA may, by written notice and otherwise in the prescribed manner, give a direction to a contributor requiring the contributor to provide information or data to a licensee, an authorised body, or another entity, where the provision of that information or data is necessary or desirable for the generation or operation of the financial benchmark specified in a licence.
3: A direction may (without limitation) specify either or both of the following:
a: requirements relating to the manner and form in which the information or data must be provided:
b: the entity to which the information or data must be provided.
4: In this subpart, contributor
5: Subsection (4)
6: The contributor must comply with the direction ( see
448D: FMA’s powers to direct administration of financial benchmark
1: The FMA may exercise a power under subsection (2)
a: a licensee or an authorised body has ceased or is likely to cease generating or operating a financial benchmark specified in a licence; and
b: it is necessary or desirable in order to promote any of the purposes set out in section 448B
2: The FMA may, by written notice and otherwise in the prescribed manner, give a direction to a licensee or an authorised body—
a: to continue to generate or operate the financial benchmark in a particular way; or
b: to transfer or cease the generation or operation of the financial benchmark in a particular way.
3: A direction may (without limitation) specify 1 or more requirements relating to the following:
a: changes to the rules or procedures by which the financial benchmark is generated:
b: changes to the documents under which the financial benchmark is generated or operated (for example, any compliance documents required by a condition of the licence):
c: the orderly transfer of the generation or operation of the financial benchmark to another person:
d: the orderly cessation of the generation or operation of the financial benchmark:
e: the provision of material (including information, data, computer software, instructions, methodologies, formulas, or algorithms) to another person, where the provision of that material is necessary or desirable for the generation, operation, or transfer of that financial benchmark.
4: The licensee or authorised body must—
a: give the FMA all reasonable assistance to facilitate the continued generation and operation of the financial benchmark (or the orderly cessation of the financial benchmark); and
b: comply with the direction.
5: See
448E: Duration of direction
1: A direction under section 448C or 448D
2: The FMA may, by written notice, extend the period referred to in subsection (1)
448F: FMA must follow steps for giving direction
Sections 475 to 477 apply to a direction under section 448C or 448D
448G: FMA may give interim direction pending exercise of power
1: The FMA may give an interim direction (an interim direction section 448C or 448D subsection (2)
a: the FMA is considering, at any time, whether it may exercise a power under section 448C or 448D
b: the FMA considers that making an interim direction is necessary or desirable in the public interest.
2: An interim direction is in force from the time at which it is given until the close of—
a: the date that is 15 working days after the day on which it is given; or
b: a later date specified by the FMA by notice to the person to whom the interim direction relates.
3: For the purposes of subsection (2)﻿(b)
a: the FMA may specify a later date if the FMA is of the opinion that it is not reasonably practicable for it to complete its consideration as referred to in subsection (1)﻿(a) subsection (2)﻿(a)
b: the later date must be a date that is no more than 30 working days after the day on which the interim direction is given.
4: The FMA—
a: may act under subsection (1) or (2)﻿(b)
b: must, after acting under subsection (1) or (2)﻿(b)
5: The person to whom the interim direction relates must comply with the direction ( see
448H: FMA must give notice after giving interim direction
If the FMA gives an interim direction, the FMA—
a: must, as soon as is reasonably practicable, give written notice to the person to whom the interim direction relates of—
i: the terms and conditions of the interim direction; and
ii: the reasons for the interim direction; and
iii: any other information the FMA thinks relevant in the circumstances; and
b: in the case of an interim direction to a contributor, must also give the written notice referred to in paragraph (a)
c: may also make the direction available on its Internet site; and
d: may also give notice to any other person of those matters.
448I: General provisions on FMA’s directions
1: The FMA may give a direction under this subpart on the terms and conditions that the FMA thinks fit.
2: The FMA may vary a direction in the same way as it may give the direction under this subpart.
3: The FMA may revoke a direction or suspend a direction on the terms and conditions it thinks fit.
448J: Protection for persons in respect of provision of material, information, or data under this subpart
No civil or criminal proceedings may be brought against a person by reason of the person having provided material, information, or data in good faith and in accordance with a direction under this subpart.
44: Section 449 amended (Part 6 services provisions)
After section 449(4)﻿(k)
ka: section 448C, 448D, or 448G
45: Section 451 amended (Meaning of FMC reporting entity)
1: In section 451(b) scheme or a person referred to in subsection (2)
2: In section 451
2: Despite subsection (1)﻿(b)
a: the licence only covers acting as an administrator of a financial benchmark; and
b: the person is not a person referred to in subsection (1)﻿(a) or (c) to (k)
46: Section 452 amended (Company that issues equity securities not FMC reporting entity if fewer than 50 shareholders)
In section 452(1) 451(a) 451(1)﻿(a)
47: Section 532 amended (Appeals against other decisions of FMA on questions of law only)
After section 532(f)
fa: a decision under section 448C, 448D, or 448G
48: Section 546 amended (Regulations for purposes of Part 6 (market services))
After section 546(1)﻿(d)﻿(iv)
v: in the case of a licence to act as an administrator of a financial benchmark, conditions of a kind described in section 403(5)
49: Section 548 amended (Other regulations)
1: After section 548(1)﻿(d)﻿(vii)
viii: excluding (whether by class or in a particular case) a price, estimate, rate, index, or value from being a financial benchmark for the purposes of section 6(7)
2: In section 548(2) and (v) (v), and (viii)
50: Section 550 amended (Procedural requirements for regulations relating to exemptions, exclusions, and definitions)
In section 550(2)﻿(f) and (v) (v), and (viii)
51: Schedule 4 amended
In Schedule 4, clause 20(2A) 451(a) 451(1)﻿(a)
52: Consequential amendments
Amend the enactments specified in Schedule 7 OIC LI 2020/314 2021-03-14 Fair Trading Act 1986 Financial Services Legislation Amendment Act 2019 Remaining provisions brought into force