4616 NEW ZEALAND GAZETTE, No. 163 27 OCTOBER 2011

(ii) has the competence, knowledge and skills to provide advice or discretionary investment management services to
that client, and in respect of that product;
(iii) acts in the best interests of the client;
(iv) ensures that the client has sufficient information, in a form which enables the client to understand that
information, to make an informed decision;
(v) ensures that the client understands whether or not any advice given takes into account the personal circumstances
of the client; and
(vi) does not act in any way, or make any omission, which would bring the financial services profession, or any part
of it, into disrepute;
(i) the Company complies with Regulations 3 to 8, 14 to 17 and 22 to 24 of the Regulations as if the Company were a
dealer for the purposes of those Regulations, and must, when a client’s position in respect of a specified futures
contract is closed out, promptly pay any money owing to the client under that specified futures contract into a client
bank account;
(j) the amount of a client money which is withdrawn from the client bank account as margin for client transactions does
not exceed:
(i) in relation to a particular specified futures contract, the amount described in the disclosure document relating to
that specified futures contract in accordance with clause 3(2)(b) of this notice;
(ii) in relation to specified futures contracts entered into by a particular client, the amount of client funds held by the
Company for that client; and
(iii) in aggregate, the amount of margin payable by the Company to an approved counterparty in respect of a contract
entered into by the Company to hedge its exposure to client positions;
(k) the Company maintains proper records:
(i) to record dealings in respect of specified futures contracts with clients;
(ii) to record client money or property received, held or otherwise dealt with in connection with dealings in specified
futures contracts; and
(iii) which are audited or reviewed, and reported on, in accordance with the Regulations;
(l) the Company’s financial statements are prepared and registered as if 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;
(m) the Company sends a copy of its audited financial statements to the Financial Markets Authority not more than three
months after the end of each financial year;
(n) the Company at all times meets the capital adequacy requirements set out in clause 4 of this notice;
(o) the Company at all times meets the reporting requirements set out in clause 5 of this notice;
(p) the Company maintains adequate professional indemnity insurance for its business at all times;
(q) the Company must, within three months after the end of each financial year, give a report to the Financial Markets
Authority on the extent to which it has complied with its obligations under this notice in the preceding financial year;
(r) the Company must promptly provide to the Financial Markets Authority any information held by the company which is
requested by the Financial Markets Authority for the purposes of any enquiry or investigation, or for the purposes of
supervision of the Company; and
(s) the Company immediately notifies the Financial Markets Authority in writing of any material matter concerning the
Company’s authorisation as a futures dealer, including the following events:
(i) the insolvency of the Company or the bankruptcy of any of its directors;
(ii) where the Company has failed to comply, or believes it will fail to comply, with the capital adequacy
requirements set out in clause 4;
(iii) where a receiver, provisional liquidator, liquidator or a similar officer is appointed, or any resolution is passed or
order made for the liquidation or dissolution of the Company;
(iv) if the Company, or any of its directors or senior management, is convicted of an indictable offence;
(v) any regulatory action taken against the Company, or any of its directors or senior management whether in
New Zealand or elsewhere;
(vi) if there is any material change to the nature of the business activities undertaken by the Company;
(vii) if there is any change to the shareholding, or ultimate beneficial ownership, of the Company; and
(viii) 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.

4. Capital adequacy requirements—(1) The Company must at all times be able to pay its debts as they become due in the
   normal course of business.
   (2) The Company must ensure that its Surplus Liquid Funds exceeds at all times its Prescribed Liquid Funds Amount.
   (3) Except as provided in clause 6, the Company’s Prescribed Liquid Funds Amount is $1,000,000.00.
   (4) The Company’s Surplus Liquid Funds is the aggregate of all of its Liquid Assets, less any risk based reductions to its
   Liquid Assets, less its Gross External Liabilities.
   (5) The Company’s Liquid Assets are:
   (a) cash;
   (b) cash equivalents (as defined by NZ IAS 7);
   (c) trade receivables realisable within the next three months; and
   (d) financial assets that have a ready market, which are valued at current market prices.