8 MAY

NEW ZEALAND GAZETTE

1287

(2) Any term or expression that is defined in the Act or the
Regulations and that is used, but not defined, in this notice
has the same meaning as in the Act or the Regulations.

3. Authorisation

(1) The company is authorised to carry on the business of dealing in specified futures contracts.

(2) The authorisation is subject to the conditions that:

(a) the company does not carry on the business of
dealing in specified futures contracts on behalf of any
person other than a person who has entered into a
client services agreement with the company, and
then only in accordance with the terms of that
agreement.

(b) before the company carries on the business of
dealing in specified futures contracts on behalf of any
person, the company has provided that person with
copies of the following:

(i) A document that clearly describes, for the
prudent but non-expert investor, the risks
associated with trading in specified futures
contracts, including any specific risk factors
that apply to trading in any of the particular
contracts or classes of contracts dealt with by
the company;

(ii) one or more documents that clearly describe,
for the prudent but non-expert investor, the
class or classes of specified futures contracts in
which the company intends to deal on behalf of
that person; and

(iii) an investment broker disclosure document
including the information listed in section 3 of
the Investment Advisers (Disclosure) Act 1996.

(c) no employee, director or agent of the company may
give investment advice to any client unless that
director, employee or agent has first provided
investment adviser disclosure to that client in terms
of the Investment Advisers (Disclosure) Act 1996,
including the request disclosure under section 4 of
the Act.

(d) any company document that states the company has
been authorised by the Securities Commission to
carry on the business of dealing in futures contracts
includes a statement to the effect that:

(i) the Securities Commission’s role in authorising
futures dealers is limited and does not imply
approval or endorsement of the business,
trading or solvency of the company; and

(ii) the Securities Commission has not approved
the client services agreement or any disclosure
documents of the company.

(e) the company maintains proper records:

(i) to record dealings in respect of specified futures
contracts with or on behalf of the client;

(ii) to record client money, funds and property held
or received in connection with dealings in
specified futures contracts; and

(iii) which are audited or reviewed, and reported on,
in accordance with the Regulations and the
Financial Reporting Act 1993.

(f) the company has current agreed upon procedures
engagement terms.

(g) the company has appointed a compliance reporter.

(h) copies of the current agreed upon procedures
engagement terms, the company’s compliance
manual and any amendments to these documents
have been deposited with the Securities Commission.

(i) the company’s financial statements are prepared and
registered on the basis that the company is an issuer
in terms of the Financial Reporting Act 1993 and are
audited at least once a year by a qualified auditor
under the Financial Reporting Act 1993.\n
(j) the agreed upon procedures engagement terms
provide for (without limitation):

(i) the client money, funds and property records in
respect of specified futures contracts to be
reviewed and reported on by the compliance
reporter at least once a year;

(ii) the review of, and reporting on, the dealing
practices and systems of the company against
the practices and procedures set out in
the company’s compliance manual by the
compliance reporter (including on-site
inspections of the company’s records and
procedures), such review and reporting to be
undertaken at least once in every six months;

(iii) a copy of the compliance reporter’s reports to
be sent to the Securities Commission by the
compliance reporter;

(iv) the company to provide the compliance reporter
with copies of its annual report and monthly
financial statements including a statement of
financial position, a statement of financial
performance, a statement of cash receipts and
payments that includes receipts and payments
of client monies, funds and property for the
month and a statement of its position with
regard to client funds;

(v) the compliance reporter to give notice to the
Securities Commission before or immediately
upon it resigning or retiring from its position as
compliance reporter.

(k) the company sends a copy of its audited financial
statements to the Securities Commission not more
than three months after the end of each financial
year.

(l) the company maintains adequate professional
indemnity insurance for its business at all times.

(m) the company immediately notifies the Securities
Commission in writing of any of the following
events:

(i) The insolvency of the company or the
bankruptcy of any of its directors.

(ii) If the company, or any of its directors, is
convicted of an indictable offence.

(iii) Where a receiver, provisional liquidator,
liquidator or a similar officer is appointed, or
any resolution is passed or order made for the
winding up or dissolution of the company.

(iv) Any regulatory action taken against the
company, or any of its directors or senior
management, whether in New Zealand or
elsewhere.

(v) If any director or member of the senior
management leaves the company or if any new
director or member of senior management is
appointed to the company.

Dated at Wellington this 6th day of May 2003.

The Common Seal of the Securities Commission was
affixed in the presence of:

[L.S.]

JANE DIPLOCK, A.O., Chairperson.

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