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.

How to apply

Information required in your application

Provide the full name, address and corporate status of the person(s) seeking the exemption.
State the jurisdiction in which the applicant is incorporated or constituted, and any securities exchanges upon which its financial products are listed
Provide the Acts and/or Regulations from which the exemption is sought and any conditions of exemption you consider appropriate.
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).
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.
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

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Exemptions from requirements for disclosure of offers of financial products or governance of financial products

Describe the financial products and the offer.
It would be helpful to give some background to the offer and then specific details e.g., the type of financial products, details of the offer, parties to the offer, details of target subscribers, etc, proposed governance arrangements.
Describe how your proposed exemption may affect investors and any costs and benefits to them.
Describe the effects on the issuer of the financial product(s), and the relative costs and benefits, of (a) having and (b) not having the exemption.
Describe any proposed conditions that require disclosure of alternative information helpful for the investor to make an investment decision and any alternative governance arrangements to allow for effective monitoring and reduce risks.

Exemptions for relief from financial reporting obligations for overseas issuers

Provide detailed information on the financial reporting, including audit requirements in force in the country where the issuer is incorporated or is otherwise subject to e.g., listing rules or prudential regulation.
Provide the legal standing of the financial reporting requirements.
Provide the enforceability of the financial reporting requirements.
Detail the ease with which New Zealand authorities could, if necessary, obtain cooperation from home jurisdiction in any investigation – for example, the Securities Regulator and any independent Auditor oversight bodies.
Include copies of applicable financial reporting laws and standards, or references to where these can be obtained electronically.

Exemptions for relief from financial reporting obligations for entities in receipt of funds from a conduit issuer

Describe how the applicant is a ‘recipient of funds from a conduit issuer’.
Include specific details, e.g., the type of financial products, parties to the offer, parties who are ‘recipients of funds from a conduit issuer’ and the ‘conduit issuer’, details of target subscribers etc.
Address how the circumstances of the issuer or the conditions suggested will ensure that investors still receive adequate information about their investment and the entity or entities for whose use the money has been raised.

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.

Exemption application type	Application and advance fee	Hourly rate – FMA Board members	Hourly rate – FMA staff
Financial Markets Conduct Act 2013	$1,265 (incl. $115 application fee)	$230	$178.25

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.

Payment option

How to pay

Additional information

Electronic deposit or internet banking

Where bill pay is available please select ‘Financial Markets Authority - Other’

Otherwise, our bank details are:

Bank: Westpac

Account name: Financial Markets Authority

Account number: 03-0584-0198005-000

To ensure we process your payment correctly please provide the following information:

Particulars: Payor’s name*

Code: Exemptions

Reference: Applicant’s name

* 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.

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