NEW ZEALAND GAZETTE, No. 131
1 NOVEMBER 2012

(iii) places the interests of the client first, and acts with integrity, in providing the futures adviser services;

(iv) ensures that the client has sufficient information, in a form which enables the client to understand that information, to make an informed decision about the futures adviser service or the specified futures contracts to which the futures adviser service relates;

(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 at all times complies with the requirements relating to client money and client property in clause 4.

(j) the Company must, within three months after the end of each financial year, give a report to FMA on how it handles client money, including the extent to which clients have consented to their money being held with approved counterparties and amount and proportion of client money held with each approved counterparty;

(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 FMA 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 6 of this notice;

(o) the Company at all times meets the reporting requirements set out in clause 7 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 FMA on the extent to which it has complied with its obligations under this notice in that financial year;

(r) the Company must promptly provide to FMA any information held by the Company which is requested by FMA, for the purposes of any enquiry or investigation, or for the purpose of supervision of the Company in connection with the Company’s obligations under this notice; and

(s) the Company immediately notifies FMA 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 6;

(iii) where a receiver, provisional liquidator, liquidator, administrator 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, 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. Further conditions relating to client money—(1) Subject to clause 4(2), the Company must comply 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, immediately pay any money owing to the client under that futures contract into a client bank account.

(2) The Company may, if the client has provided written consent, transfer an amount of that client’s client money from the client bank account to one or more approved counterparties in advance of the client entering into a specified futures contract which has been, or will be, backed off with that counterparty or while the client has an open position in a specified futures contract, and may retain a balance of client money attributable to that client with those approved counterparties after that client closes out specified futures contracts.

(3) The Company may only accept a consent from a client for the purpose of clause 4(2) if the client has, prior to giving that consent, received a written document which explains how the client’s money will be handled if that client provides the consent and the risks associated with that treatment of client money.

(4) If a client has provided a consent for the purposes of clause 4(2), the Company must only hold, handle or disburse the client’s money in accordance with that consent and the written description of how client money will be handled which was given to the client prior to the client giving their consent and is referred to in that consent.

(5) Client money may only be withdrawn from the client bank account for the purpose of margining a specified futures contract or funding a trading account with an approved counterparty if it is immediately paid to the relevant approved counterparty in accordance with one or more consents pursuant to clause 4(2) and must be immediately returned to the client bank account on being remitted back to the dealer by the approved counterparty.

5. Further conditions relating to disclosure documents—(1) The disclosure document must include information that would enable a prudent but non-expert investor to make a decision about whether to invest in a specified futures contract of that class.