✨ Financial Regulations and Reporting Requirements
NEW ZEALAND GAZETTE, No. 193
15 DECEMBER 2011
(8) The Company must apply the following risk-based reductions to the calculation of its liquid assets:
(a) for any loans and advances to, or amounts owing to which clause 4(7) applies (including any margins lodged with a related party), 18% of the value of the asset;
(b) for a futures contract entered into where the client has not paid to the Company any margin due in respect of that futures contract by the 2nd business day following the date the liability to make that margin payment arose, a reduction of 120% on that uncollected margin;
(c) for equity securities held or receivable by the Company including short positions:
(i) for leading equities (meaning NZSX listed equities or equities listed on the main board of an overseas exchange):
- A 10% for an equity ranked 1 to 50 in the leading index of the relevant exchange; or
- B 15% for all other equities quoted on the main board; and
(ii) for rights, the lesser of:
- A 100%; or
- B 10% of the combined value of rights and application monies; and
(iii) for other equity securities (including partly paid shares), 100%;
(d) for liquid assets comprising debt securities in New Zealand dollars:
| Security Type | NZ Dollar Domiciled Under 1 yr | NZ Dollar Domiciled 1–3 yrs | NZ Dollar Domiciled 3–5 yrs | NZ Dollar Domiciled 5+ yrs |
|---|---|---|---|---|
| Government Securities | 0.5% | 1.5% | 3.0% | 5.0% |
| Investment Grade (Non Govt) | 1.5% | 3.5% | 4.5% | 7.0% |
| Rated Non Investment Grade (Non Govt) | 4.0% | 7.0% | 8.5% | 10.0% |
| Other | 6.0% | 8.0% | 10.0% | 12.5% |
*All rated Securities must carry a rating by an agency approved by the Reserve Bank for the purposes of section 80 of the Reserve Bank of New Zealand Act 1989.
(e) for liquid assets comprising debt securities in foreign currencies:
| Security Type | Foreign Currencies Under 1 yr | Foreign Currencies 1–3 yrs | Foreign Currencies 3–5 yrs | Foreign Currencies 5+ yrs |
|---|---|---|---|---|
| Government Securities | 0.6% | 1.8% | 3.6% | 6.0% |
| Investment Grade (Non Govt) | 1.8% | 4.2% | 5.4% | 8.4% |
| Rated Non Investment Grade (Non Govt) | 4.8% | 9.8% | 10.2% | 12% |
| Other | 7.2% | 9.6% | 12% | 15.5% |
*All rated Securities must carry a rating by an agency approved by the Reserve Bank for the purposes of section 80 of the Reserve Bank of New Zealand Act 1989.
(9) The Company’s gross external liabilities include its current, long-term and contingent liabilities, whether or not those contingent liabilities appear on the Company’s statements of financial position.
(10) In calculating the Company’s gross external liabilities that calculation excludes:
(a) any client funds held by the Company; and
(b) the liabilities of any trust of which the Company is a trustee.
6. Reporting requirements
(1) The Company must:
(a) appoint an auditor;
(b) appoint a compliance officer with responsibility for ensuring compliance with this notice; and
(c) make available to the auditor any information the auditor requests to satisfy itself that the Company has complied with the capital adequacy requirements in clause 5.
(2) The Company must enter into agreed upon procedures with the auditor, a copy of which must be filed with the Financial Markets Authority, which provide for (without limitation):
(a) the auditor to receive the monthly reports referred to in clause 6(3) and semi-annual prospective financial statements referred to in clause 6(8) from the Company;
(b) the auditor to check each month that:
(i) the monthly report contains all of the information that is required to be in the monthly report pursuant to clause 6(3);
(ii) each of the statements required to be referred to in the certificate pursuant to clause 6(4) have been certified as true by the directors; and
(iii) the log prepared under clause 6(5)(c) does not disclose any breach of the capital adequacy requirements in clause 5(2) of this notice;
Next Page →
NZ Gazette 2011, No 193
✨ LLM interpretation of page content
🏭
Authorised Futures Dealers Notice 2011
(continued from previous page)
🏭 Trade, Customs & IndustrySecurities, Futures Dealers, Financial Markets Authority, Intercontinental Financial Services Corporation Limited, Disclosure Documents, Compliance, Capital Adequacy