1 NOVEMBER 2012 NEW ZEALAND GAZETTE, No. 131

3775

(a) the auditor to receive the monthly reports referred to in clause 7(3) and semi-annual prospective financial statements referred to in clause 7(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 7(3);

(ii) each of the statements required to be referred to in the certificate pursuant to clause 7(4) have been certified as true by the directors;

(iii) the log prepared under clause 7(5)(c) does not disclose any breach of the capital adequacy requirements in clause 6(2) of this notice;

(c) the auditor to check the semi-annual prospective financial statements to ensure that they do not disclose that the Company is likely to breach the capital adequacy requirements contained in clause 6(2) of this notice and that they disclose positive net cash inflows for each month;

(d) the auditor to check a sample of days on a semi-annual basis to:

(i) confirm that the calculations required under clause 7(5)(a) were performed on that day and signed off as reviewed by the compliance officer or the chief executive officer;

(ii) confirm that the results of the calculations agree to the logs provided to the auditor on a monthly basis;

(iii) confirm that the calculations were performed in compliance with clause 6; and

(iv) perform additional procedures, as set out in the agreed upon procedures, over the accuracy of the data used in the calculations;

(e) the auditor to report to FMA within 20 working days of the end of each month if:

(i) the Company fails to provide the auditor with the monthly report in accordance with clause 7(3) or semi-annual prospective financial statements in accordance with clause 7(8), or to include in any monthly report such information as it is required to;

(ii) the directors, or any of them, do not certify the truth of any of the statements required to be contained in the certificate under clause 7(4) without qualification;

(iii) the monthly report discloses a breach of the conditions in clause 6 by the Company;

(iv) the monthly report discloses a breach of the conditions contained in clauses 3(2)(k) and 4; and

(v) testing required under clause 7(2)(d) indicates any breach has occurred which was not reported at the time of the breach.

(3) Within 10 working days of the end of each month, the Company must provide a monthly report to its auditor that contains the following:

(a) Certification from the Company’s directors in terms of clause 7(4) of this notice;

(b) any memorandum, and any other documents or information, required by clause 7(6) of this notice;

(c) the calculations required under clause 7(5); and

(d) details of the extent to which the client money has been placed with each of its approved counterparties, including:

(i) the number of clients who have not provided consents for the purposes of clause 4 and the total amount of client money held for those clients;

(ii) the maximum amount of client money placed with each approved counterparty, and the percentage of total client money that amount represented;

(iii) the minimum margin required by each approved counterparty in respect of open contracts as at the date on which the maximum amount of client money was placed with approved counterparties;

(iv) the amount of client money placed with each approved counterparty as at the last day of the month, and the percentage of total client money that amount represents;

(v) the minimum margin required by each approved counterparty in respect of open contracts on the last day of the month;

(vi) the amount of the Company’s own money placed with approved counterparties on the last day of the month.

(4) The certificate required by clause 7(3)(a) must be signed by all directors of the Company, and should state that, after due enquiry, and to the extent that the following statements are true, the directors of the Company are satisfied that:

(a) the Company currently has, and has maintained at all times during the previous month, the amount of surplus liquid funds required by clause 6(2);

(b) the calculations required under clause 7(5) are true and correct;

(c) the Company can reasonably be expected to maintain the required level of surplus liquid funds for at least the next quarter;

(d) the Company has made all payments it was obliged to make as they fell due;

(e) the Company can reasonably be expected to continue to pay its debts as they fall due for at least the next quarter;

(f) there are no material matters which have, or are likely to, adversely affect the Company’s:

(i) financial position;

(ii) financial performance; or

(iii) cash flows;

(g) the Company has complied with clauses 3(2)(k) and 4 of this notice regarding handling client money and client property, and recording client money and client property and client dealing.