Exemptions

What is an exemption?

• The FMA has wide powers under the FMC Act to provide exemptions to persons or transactions from compliance obligations under financial markets law.
• This allows us to provide a tailored approach and ensure requirements for businesses are reasonable and cost-effective. 
• We are aware that issues may arise for market participants operating under the FMC Act regime, and exemptions may be required in some cases. 

Exemptions available

The FMA has the power to grant exemptions from:

• any compliance obligation in Parts 2 to 7, subpart 8 of Part 8 and any of the schedules of the FMC Act and any regulations made under that Act
• Trusts Act 2019 provisions that apply to certain FMC Act trusts relating to debt securities or managed investment schemes.

While the law gives us broad powers to grant exemptions from compliance with specific provisions in the FMC Act, we consider that our exemption power only extends to compliance provisions, not to liability provisions. We are also unlikely to exempt issuers from the general prohibition in the FMC Act against the distribution of deceptive, misleading or confusing advertisements.

• Financial reporting exemptions and designations to vary financial reporting public accountability
• AML/CFT exemptions
• Exemptions - offers under the FMC act

How to apply

Information required in your application

1. Provide the full name, address and corporate status of the person(s) seeking the exemption.
2. State the jurisdiction in which the applicant is incorporated or constituted, and any securities exchanges upon which its financial products are listed
3. Provide the Acts and/or Regulations from which the exemption is sought and any conditions of exemption you consider appropriate.
4. Explain, for each provision of the Acts or Regulations from which the exemption is sought, why the exemption is wanted and give full reasons which may justify an exemption. Your reasons should include an explanation of how the exemption sought is consistent with the policy of the relevant legislation, and how it meets the statutory test (see sections 556, 557 and 572 of the FMC Act).
5. Identify any existing exemption notices which are like the exemption sought and which may provide a precedent for your application. Explain how the notices are similar to or different from the exemption you are seeking.
6. Provide a draft exemption notice which would give effect to the exemption you seek. When drafting this notice please include the company, or other entity and proper legal names; appropriate definitions where needed, the particular provisions of the relevant legislation from which exemptions are sought, the terms or conditions proposed for each exemption sought and a summary of the key reasons for the exemption ( these should be consistent with the policy of the relevant legislation, and address the statutory tests that must be met for the FMA to grant the exemption).

Additional information required for specific exemption applications

Fees

Exemption fees are set by regulations. You need to pay the application fee and an advance fee for fees and costs to be incurred as set out in the table below. We will charge any additional time spent on an hourly basis as set out in the table.

Please note: all fees are inclusive of GST.

We can also recover the cost of obtaining expert assistance in relation to particular applications. Applicants must also reimburse us for the costs of notifying the exemption notice in the Gazette, where applicable.

How to submit your application

Submit your completed application by email to exemptions@fma.govt.nz. Your application fee must be paid at the time your application is made. 

How to pay

You can pay by electronic deposit or internet banking. Payment can be made by applicants or law firms making applications on behalf of their clients. The person paying the application fee must also be the person who pays the subsequent fees and costs. For example, if a law firm pays the application fee, that law firm must also pay any additional fees and costs. We recommend if law firms apply for exemptions on behalf of their clients, the parties discuss and agree who will be responsible for paying the FMA’s fees before submitting an exemption application.

* This is the name of the person paying the application fee. This person will be invoiced for any subsequent fees and costs.

Please note payment by credit card is not available for exemption applications.

How long it takes

Individual exemption applications (relating to a particular person or transaction) generally take 30 working days from the time we receive all the information we need. This may take longer, for example, if significant questions of policy arise.  If this is the case, we will tell you and explain why. Exemption notices come into force as soon as we grant them. You do not need to wait for them to be notified in the Gazette. If your application is urgent, we will try to accommodate your request. However, you must provide the timeframes within which the decision is needed and provide reasons for requesting an urgent exemption.

Renewal of existing individual exemption notices

Our exemption notices have a term of no more than five years.  If you need an exemption to apply after the expiry date noted in the notice, you will need to apply for a new exemption.  The same process and timeframes apply as for a new exemption – an application should be submitted with the relevant information and fee as set out above.  We would also ask that any such applications are submitted as early as possible so they can be properly considered prior to the revocation of the existing notice (if necessary).