Investment Advisers (Disclosure) Act 1996

1: Short Title and commencement
1: This Act may be cited as the Investment Advisers (Disclosure) Act 1996.
2: Subject to subsection (3)
3: This Act shall come into force on the 1st day of October 1997 if no Order in Council is made under subsection (2)
2: Interpretation
1: In this Act, unless the context otherwise requires,— Address
a: In the case of an individual, both—
i: The address of the individual's principal place of business in New Zealand (if any) or, if the individual does not have a place of business in New Zealand, the address of the individual's principal place of business outside New Zealand; and
ii: The city, town, or district (whether in New Zealand or elsewhere) in which the principal residence of the individual is situated:
b: In any other case, the address of the person's principal place of business in New Zealand (if any) or, if the person does not have a place of business in New Zealand, the address of the person's principal place of business outside New Zealand: Business Buy Court Director Disclosure section 3 4 Employment Investment advice advice
a: A recommendation, opinion, or guidance given to a member of the public in relation to buying or selling (or not buying or selling) securities; and
b: Without limiting paragraph (a)
c: Do not include—
i: Any such recommendation, opinion, or guidance given by a person whose principal occupation is that of a journalist and that is given in that person's capacity as a journalist; or
ii: Any such guidance about the procedure for buying or selling securities: Investment adviser adviser
a: Where a person is giving investment advice in the course of his or her employment, include both that person and his or her employer; but
b: Do not include the issuer promoter trustee Securities Act 1978 Unit Trusts Act 1960 statutory supervisor Securities Act 1978
c: Do not include a person who only transmits investment advice relating to particular securities given by the issuer promoter trustee Securities Act 1978 Unit Trusts Act 1960 statutory supervisor Securities Act 1978 Investment broker broker
a: Where a person is receiving such investment money or investment property in the course of his or her employment, include both that person and his or her employer; but
b: Do not include—
i: The issuer or a trustee (within the meaning of the Securities Act 1978 Unit Trusts Act 1960
ii: A nominated person of a trustee (within the meaning of the Unit Trusts Act 1960
iii: A nominee of a nominated person of a trustee (within the meaning of the Unit Trusts Act 1960
iv: A statutory supervisor (within the meaning of the Securities Act 1978
v: A security registrar appointed by the issuer— of a security to which the investment money or investment property relates; and
c: Do not include a person who only transmits investment money or investment property to a person to whom paragraph (b) Investment broker and broker: paragraph (b) substituted 3 June 1998 2(1) Investment Advisers (Disclosure) Amendment Act 1998 Investment money money Investment money and money: this definition was substituted 3 June 1998 Investment Advisers (Disclosure) Amendment Act 1998 Investment property property Investment property and property: this definition was substituted 3 June 1998 2(3) Investment Advisers (Disclosure) Amendment Act 1998 Investor Person Receive Remuneration Security Securities Act 1978
a: A security exempted from Part 2 Securities Act 1978 paragraphs (b) to (h)
b: A call debt security Sell
a: Allot, transfer, dispose of, withdraw, or terminate; and
b: Agree to sell, allot, transfer, dispose of, withdraw, or terminate: Seller section 2(1) Securities Act 1978 Send Voting security section 2 Securities Markets Voting security: this definition was amended, as from 1 December 2002 30 Securities Markets Amendment Act 2002 by substituting the word Markets Amendment Working day
a: Saturday, Sunday, Good Friday, Easter Monday, Anzac Day, the Sovereign's Birthday, Labour Day, and Waitangi Day; and
b: A day in the period commencing with the 25th day of December in any year and ending with the 2nd day of January in the following year; and
c: If the 1st day of January in any year falls on a Friday, the following Monday; and
d: If the 1st day of January in any year falls on a Saturday or a Sunday, the following Monday and Tuesday: Writing
a: The recording of words in a permanent and legible form; and
b: The display of words by any form of electronic or other means of communication in a manner that enables the words to be readily stored in a permanent form and, with or without the aid of any equipment, to be retrieved and read;— and written
2: For the purposes only of determining whether investment advice is given to the public or investment money or investment property is received from the public, section 3 Securities Act 1978
3: For the purposes of this Act, unless the context otherwise requires, associated persons persons associated with each other
a: Persons who are relatives Income Tax Act 2007
b: Persons who are partners to whom the Partnership Act 1908
c: Bodies corporate that consist substantially of the same shareholders or are under the control of the same persons; or
d: A body corporate and a person who has the power, directly or indirectly, to exercise, or control the exercise of, the right to vote attached to 25 percent or more of the voting securities of the body corporate; or
e: A body corporate and a person who is a director or principal officer of the body corporate. Section 2(3)(a) amended 1 April 2008 Income Tax Act 2007 Subsection (3)(a) amended 1 April 2005 YA 2 Income Tax Act 2004 by substituting the words Income Tax Act 2004 Income Tax Act 1994 Disclosure by investment advisers and investment brokers
3: Initial disclosure by investment advisers and investment brokers
1: Every investment adviser and investment broker (or, in the case of an adviser or broker that is a body corporate or unincorporate, any of whose directors or secretary) who, during the 5 years preceding the date of giving investment advice or receiving investment money or investment property, as the case may be,—
a: Has been convicted of an offence against this Act, or of a crime involving dishonesty Crimes Act 1961
b: Was a director or principal officer of a body corporate at the time the body corporate committed such an offence; or
c: Has been adjudged bankrupt; or
d: Has been prohibited by an Act or by a court from taking part in the management of a company or a business,— shall, in accordance with section 5
2: Every section 5
a: How payment or delivery of money or delivery of property should be made to the
b: Whether or not the money or property received by the
c: What records will be kept by the
d: Whether or not the receipt, holding, and disbursement of the money and the receipt, holding, and distribution of the property, by the
e: The extent, if any, to which the
f: Such other information as is required to be disclosed under this subsection by regulations made under this Act.
3: For the purposes of subsection (2)(d) auditor section 2C Securities Act 1978 Subsection (2) amended 3 June 1998 3(1)(a) Investment Advisers (Disclosure) Amendment Act 1998 by omitting the words investment adviser and 3 June 1998 3(1)(b) omitting the words adviser or Subsection (3) amended 3 June 1998 3(2) Investment Advisers (Disclosure) Amendment Act 1998 by omitting the words adviser or
4: Request disclosure by investment advisers
1: Every investment adviser shall, on request (whether made orally or in writing) by an investor to whom that adviser is giving or, during the preceding month has given, investment advice, disclose to that investor, as soon as practicable, and in any event not later than 5 working days after the request and in accordance with section 5
a: The name of any relevant organisation with which the adviser has a relationship and a description of that relationship:
b: The types of securities about which the adviser gives advice; and, if the adviser gives advice only about securities of a particular issuer or particular issuers, a statement to this effect and the name of each of the issuers concerned:
c: Any qualifications of the adviser that are relevant to the giving of investment advice, when those qualifications were obtained, and a brief description of the extent to which the adviser has kept up to date the knowledge gained in obtaining those qualifications:
d: A brief description of the adviser's experience as an investment adviser:
e: Whether or not the adviser or an associated person has, or will or may have, a direct or indirect pecuniary or other interest in giving investment advice to the investor (being an interest that is reasonably likely to influence the adviser in giving the advice) and, if so, the nature of that interest:
f: Without limiting paragraph (e)
i: Directly or indirectly, from a person (other than the investor); and
ii: In connection with the giving of the investment advice or a transaction resulting from the giving of the advice,— remuneration that is reasonably likely to influence the adviser in giving the advice, the nature and (to the extent practicable) the amount or rate of the remuneration, and the name of the person from whom the remuneration has been, or will or may be, received:
g: Such other information as is required to be disclosed under this subsection by regulations made under this Act.
2: In this section, the term request paragraphs (a) to (g) Method of disclosure
5: Method of disclosure
Subject to regulations made under this Act, disclosure under this Act to an investor must,—
a: Unless the disclosure is made by way of broadcasting Broadcasting Act 1989
b: In the case of an investment adviser or investment broker, other than an employee of an investment adviser or investment broker, state the name, address, and business telephone number of the investment adviser or investment broker concerned; and
c: In the case of an investment adviser or investment broker who is an employee of an investment adviser or investment broker, state the name of that employee; and
d: Be either received by the investor or delivered or sent to the investor at the investor's last known address or an address (including an electronic address) specified by the investor for this purpose. Disclosure not to be misleading
6: Disclosure not to be misleading
Disclosure under this Act must not be deceptive, misleading, or confusing in a material respect at the time that it is made. Enforcement
7: Power to order certain persons not to give investment advice or receive investment money or investment property
1: Where a person—
a: Has been convicted of an offence against this Act, or of a crime involving dishonesty Crimes Act 1961
b: Has failed, more than once, to comply with this Act; or
c: Was a director or principal officer of a body corporate at the time the body corporate committed such an offence or so failed,— the Court may make an order prohibiting or restricting the person from doing all or any of the following things:
d: Giving investment advice to, or receiving investment money or investment property from, the public:
e: Acting as a director, or taking part directly or indirectly in the management or control, of any company or business that is an investment adviser or an investment broker:
f: Being an employee, or acting as agent, of an investment adviser or an investment broker in a capacity that allows the person to take part in the giving of investment advice to, or receiving investment money or investment property from, the public.
2: Any person may, with the leave of the Court, apply to the Court for an order under this section.
3: An order under this section—
a: May be for a specified period of time or without any time limit, and may be made on such terms and conditions as the Court thinks fit; and
b: May be cancelled or varied at any time by the Court.
4: In proceedings under this section, the Court may make an order for the payment by a party to the proceedings of the whole or part of the full costs (including reasonable costs incurred between solicitor and client, fees, and other expenses) incurred by any other party to the proceedings, and, in any such case, the costs so awarded are recoverable as a debt by the party against whom they have been awarded to the party in whose favour they have been awarded.
8: Injunctions may be granted by Court for contravention
1: The Court may, on the application of any person made with the leave of the Court, grant an injunction restraining a person from engaging in conduct that constitutes or would constitute a contravention of a provision of this Act or an attempt to contravene such a provision.
2: The Court may, at any time, rescind or vary an injunction granted under this section.
3: Where an application is made to the Court under this section for the grant of an injunction restraining a person from engaging in conduct of a particular kind, the Court may,—
a: If it is satisfied that the person has engaged in conduct of that kind—
i: Grant an injunction restraining the person from engaging in conduct of that kind; or
ii: If, in the opinion of the Court, it is desirable to do so, grant an interim injunction restraining the person from engaging in conduct of that kind,— whether or not it appears to the Court that the person intends to engage again, or to continue to engage, in conduct of that kind; or
b: If it appears to the Court that, in the event that an injunction is not granted, it is likely that the person will engage in conduct of that kind,—
i: Grant an injunction restraining the person from engaging in conduct of that kind; or
ii: If, in the opinion of the Court, it is desirable to do so, grant an interim injunction restraining the person from engaging in conduct of that kind,— whether or not the person has previously engaged in conduct of that kind and whether or not there is an imminent danger of substantial damage to any person if the first-mentioned person engaged in conduct of that kind.
9: Order to disclose information
Where, on the application of any person made with the leave of the Court, the Court is satisfied that a person has engaged in conduct constituting a contravention of a provision of this Act, the Court may (whether or not that person has previously engaged in such conduct), make an order requiring that person, or any other person involved in the contravention, to disclose, at that person's own expense, to the public, or to a particular person or to persons of a particular class, in such manner as is specified in the order, such information, or information of such kind, as is so specified, being information that is in the possession of the person to whom the order is directed or to which that person has access.
10: Civil action for failure to disclose
1: Where, on the application (made with the leave of the Court) of any person—
a: Who has received investment advice from an investment adviser; or
b: Whose investment money or investment property has been paid or delivered to an investment adviser or an investment broker,— the Court is satisfied that the adviser or broker has engaged in conduct constituting a significant contravention of a provision of this Act, the Court may (whether or not that adviser or broker has previously engaged in such conduct and whether or not the person has suffered any loss as a result of the conduct), make an order requiring that adviser or broker to pay to the person an amount determined by the Court not exceeding,—
c: If the adviser or broker is an individual, $10,000; or
d: In any other case, $30,000— together with the costs (including reasonable costs incurred between solicitor and client, fees, and other expenses) incurred in respect of the proceedings.
2: Proceedings under this section may be commenced at any time within 3 years after the contravention occurred.
11: Offences and penalties
1: Every person who, without reasonable excuse, contravenes any of the provisions of this Act commits an offence and is liable on summary conviction, to a fine not exceeding,—
a: If the person is an individual, $10,000; or
b: In any other case, $30,000.
2: Where a person is convicted, whether in the same or separate proceedings, of 2 or more offences in respect of contraventions of the same provisions of this Act and those contraventions are of the same or a substantially similar nature and occurred at or about the same time, the aggregate amount of any fines imposed on that person in respect of those convictions shall not exceed the amount of the maximum fine that may be imposed in respect of a conviction for a single offence.
3: Proceedings under this section may be commenced at any time within 3 years after the matter giving rise to the contravention arose.
12: Regulations
1: The Governor-General may from time to time, by Order in Council, in accordance with the recommendation of the Securities Commission, make regulations for all or any of the following purposes:
a: Requiring information to be disclosed under section 3 4
b: Prescribing the method of disclosure under this Act:
c: Providing for such other matters, not inconsistent with this Act, as are contemplated by or necessary for giving full effect to the provisions of this Act and for its due administration.
2: The provisions of section 70(3) Securities Act 1978