Managed investment scheme manager

Page last updated: 25 March 2021

What is a Managed investment scheme manager?

A managed investment scheme manager (MIS manager or manager) manages portfolio and investment strategy for managed investment schemes (MIS).
They may either be active or passive depending on their approach to make their own investment decision or follow a market index.
They may provide investment services to wholesale clients or retail clients.
Under the FMC Act the manager of a registered MIS, other than a restricted scheme, must be licensed.

What is an MIS?

In general terms, a MIS pools money from a number of investors who rely on the investment expertise of the MIS manager. The definition in the FMC Act (section 9) is broad and includes a wide range of collective investment schemes. These schemes can be structured in different ways and may invest in a wide range of investments. They can be open-ended (offered continuously) or close-ended (fixed number of managed investment product). Examples include:

open-ended- open-ended unitised trusts, and other schemes that invest in relatively liquid assets (including KiwiSaver, superannuation, workplace savings schemes), and generally known as managed fund MIS.
closed-ended- forestry partnerships, and property syndicates that invest in a single asset class, and generally known as ‘other MIS’.

A discretionary investment management service (DIMS), insurance contract, or a scheme that only involves managing separate and direct interests in underlying property are not considered to be a MIS and would need a separate licence to provide DIMS.

Licensing and registration

Before you apply for a licence

We’re here to help you, but there are also some things you can do to ensure your application runs as smoothly as possible:

review the licensing guides and documents below as they contain all the information you need to know so you can complete and submit your application
set up your account on the Disclose Register early and get familiar with the system – you can create and discard test registrations for practice
set up your RealMe® login details early
let us know when you intend to apply and focus on the minimum standards – we will assess your business against them when processing your application
work closely with your supervisor, as they can provide advice on how to address any gaps in your application
we’re here to help so please contact us if you have any questions either by email fmcapplications@fma.govt.nz or phone 0800 434 567.

How to apply

Please contact us to get a copy of a licence application, either by email fmcapplications@fma.govt.nz or phone 0800 434 567. Download the Licensing Checklist PDF.

Note: MIS manager licence applications take time to get right, so get in early: based on our experience, we expect your MIS application will involve at least some engagement with us before it is ready to be approved. Some applications will take longer than others and therefore require more input from us.

Our assessments are tailored to your business: our assessments are adapted to the unique aspects of your business, such as its size, nature and complexity but you must meet the legal requirements in the FMC Act and applicable regulations. Where a particular standard does not seem relevant to your application, you will need to explain how you came to that view. You will also need to explain how you will meet the intent of that standard, and the summary statement for that particular category. In limited cases, we will consider requests for an exemption from certain requirements of the Financial Markets Conduct Act.

Licensing guides

Licensing guide PART A
This guide contains information about the licensing process and includes many FAQs you might have and explains how to use our online application form(currently unavailable); create a RealMe^® identity, if you don't already have one and pay your licensing fee.

Download the licensing guide Part A: How do I apply for a licence? PDF.

Licensing guide PART B
This guide contains all the specific questions you’ll be asked and the minimum standards you’ll need to show you meet. It also details the information and supporting documents you’ll need to provide when you submit your application.

Download the licensing guide Part B: Managed investment scheme (MIS) manager PDF.

Related guides and documents

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Property and forestry investment schemes need a licence too

Businesses providing property investment schemes or property syndication funds, or forestry managed investment schemes, also need to get their licence application in as soon as possible.

This licensing guide for MIS managers of forestry schemes supplements Part B of our licensing application guides. It explains to businesses providing an MIS service of a forestry scheme on how to approach their licence application under the FMC Act.

Download the Licensing guide for MIS managers of forestry schemes PDF.

We have granted some compliance obligations exemptions as below:

Download Class exemptions from some detailed compliance requirements for property schemes PDF
Some exemptions for forestry MISs and their custodians - see page 13 of the Regulatory Update: FMA legislative notices supporting the FMC Act regime or email us at exemptions@fma.govt.nz

Standard conditions for MIS manager licences

In your application, you'll need to demonstrate how you can meet the minimum standards and conditions for your licence - or ask us for a limit or variation using the forms below. This is very important because when a licence is granted, they contain conditions that support your licensee obligations. They include conditions imposed by the FMC Act, the regulations, and any conditions imposed by the FMA.

Download Standard Conditions for managed investment scheme manager licences PDF.

Single person self-managed superannuation scheme

Application for approval of a single person self-managed superannuation scheme as a Schedule 3 approved scheme should be lodged to compliance@fma.govt.nz

Please include in the subject line of your email “Application for Schedule 3 Scheme Approval”
The application needs to include a pdf copy of the executed trust deed which needs to comply with the requirements specified in FMC Act and Regulations.
The application needs to include the address for service for future correspondence from FMA and the balance date for the scheme.

The sole member of the scheme must be one of the trustees of the scheme or if the scheme has a sole corporate trustee one of the Directors of the corporate trustee. The fee payable with the application is currently $178.25 including GST and will be billed to the applicant.

Ongoing obligations once approved are:

an annual report the content of which is covered in the FMC Regulations
a set of unaudited accounts which comply with GAAP.

The accounts must be completed within 5 months of the balance date and a copy of the annual report and unaudited accounts must be lodged to FMA compliance@fma.govt.nz within 28 days of completion. Currently, there is no fee for the lodgement of the annual report and accounts.

Any questions regarding the trust deed content, application process or ongoing obligation can be made to questsons@fma.govt.nz

Licensing overview report 2017: what you need to know to meet your licence obligations.

It is helpful to read the Licensing overview report alongside the guide to the FMA’s view of conduct. Together, these documents give a good indication of our areas of future focus, our overall approach to monitoring; and what we expect of licensed providers of financial products and services.

Download the Licensing overview report (2017) PDF.

Licensing declarations and certificates

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For applicants

SD1.0 Certificate of compliance and authority to apply (applicant or their authorised person)

SD1.1 Declaration by current/proposed director of licence applicant

SD1.2 Declaration by current/proposed senior manager of licence applicant

SD1.3 Curriculum vitae of management team member of licence applicant

SD1.4 Declaration by Independent trustee (individual) - a combined certificate and declaration

For related bodies of the applicant

SD2.1 Declaration by executive director of related body to licence applicant

SD2.2 Declaration by senior manager of related body to licence applicant

For relevant parties to the applicant

SD3.1 Declaration by director of relevant party to licence applicant

SD3.2 Declaration by senior manager of relevant party to licence applicant

SD3.3 Declaration by individual relevant party to licence applicant (such as owner)

Obligations

Licensees have a number of obligations, in addition to the minimum standards and standard conditions set out in their licence.

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Minimum standards

To become a licensed MIS manager you'll have to meet and maintain certain minimum standards. The key standards in the FMC Act (section 396) include:

Your directors and senior managers (current or proposed) must be fit and proper for their positions
Your business must be capable of performing the service effectively and in keeping with your licence conditions
We must have no reason to think you're likely to contravene your licensee obligations.

There will also be other important requirements. You can find out more about the minimum licensing standards and conditions in our licensing guide.

Download Managed investment scheme (MIS) manager Licensing Application Guide Part B3 PDF.

Notifying the FMA

Licensees obligations include notifying the FMA of certain events and providing us with information. All notifications should be emailed to the FMA at compliance@fma.govt.nz, noting the relevant obligation in the subject line of your email. You can notify us when a new director or senior manager is appointed by completing a notification form.

Changes to directors or senior managers of a licensee and/or key personnel of an authorised body

This notification form must be completed and emailed to compliance@fma.govt.nz.

We understand that some people may not be able to print, sign and scan documents at the moment, due to the COVID-19 alert levels. If that is the case for you:

If you have an electronic signature, please affix that to the signature block and return the form to us.
If you do not have an electronic signature, rather than sign the document, please read it carefully, fill in all of the text boxes and then email it back to us with the following text in your email:
“I confirm that, when making the personnel change(s) notified in this form, we have followed our internal policies and processes and maintain the fit the proper standards for licensing.”

Download Notification of change of director or senior manager by licensee and/or key personnel of authorised body DOC.
(Refer Financial Markets Conduct Regulations 2014 r 191).

To notify us of a change to your key people and managers as required by the licensing standard conditions, please send an email to compliance@fma.govt.nz outlining what the changes are and the qualifications and experience of the new or replacing personnel, e.g. attach their c.v.

Note that this is a standard condition for the following licence types: DIMS, crowdfunding, independent trustee (for corporates), MIS and peer-to-peer lending.

Standard conditions for MIS manager licences

Standard Conditions for managed investment scheme manager licences

In your application, you'll need to demonstrate how you can meet the minimum standards and conditions for your licence - or ask us for a limit or variation in the application form. This is very important because when a licence is granted, they contain conditions that support your market services obligations. They include conditions imposed by the FMC Act, the regulations, and any conditions imposed by the FMA.

Marketing yourself as a licensed manager of a registered scheme

Licences are issued under the FMC Act. Should you wish to reference your licence and the authority under which it is granted on your marketing material including; websites, business cards, brochures or letterhead please use the following:

For licences without restrictions:
[Name of licence holder as on licence] is a licensed manager of registered schemes or
[Name of licence holder as on licence] is licensed under the Financial Markets Conduct Act 2013 as a manager of registered schemes.

For licences with restrictions:
[Name of licence holder as on licence] is a licensed manager of [type of scheme eg registered forestry] schemes or
[Name of licence holder as on licence] is a licensed to manage the [name scheme] scheme or
[Name of licence holder as on licence] is licensed under the Financial Markets Conduct Act 2013 as a manager of [type of scheme eg registered forestry] schemes or
[Name of licence holder as on licence] is licensed under the Financial Markets Conduct Act 2013 to manage the [name of scheme] scheme.

Your marketing material must not refer to your licence as an FMA licence.

Statements of investment policy and objectives

A statement of investment policy and objectives (SIPO) is a document that sets out the investment governance and management framework, philosophy, strategies and objectives of a managed investment scheme and its investment funds or portfolios. Under the FMC Act, all MIS managers must ensure there is a SIPO for each MIS they manage. Except in prescribed circumstances, you must also register the SIPO with the Registrar, and must lodge any changes to the SIPO with the Registrar. For further information refer to the SIPO guidance note.

Download SIPO guidance note PDF.

Download limit break information sheet PDF.

On-going obligations

As a licensed MIS manager you'll have other ongoing obligations. For example, you must:

register your scheme before you make a regulated offer, and keep the registration up-to-date
ensure scheme property is held by the supervisor or another independent custodian and is held on trust
carry out functions in keeping with the governing document, SIPO, your issuer and market services licensee obligations
correct material pricing errors or non-compliance with MIS pricing methodology, report these to your supervisor, and take any other steps required including compensation as required
monitor your compliance, identify material changes of circumstance, and meet reporting obligations

Annual MIS manager regulatory return

All licensed MIS managers are required to complete and submit an annual regulatory return. The return is a series of questions about your business and how your licensed service is used.

The initial reportable period will be 1 July 2021 to 30 June 2022. Completed returns will be due by 30 September 2022. We will notify all licensees when it is time to complete and submit the first regulatory return.

In subsequent years, licensees will be required to complete an annual regulatory return for the 12-month period ending 30 June and submit it to the FMA by 30 September of that year.

The information you provide us through the annual return helps us to:

better understand your business and the services you offer
ensure the information we have on your business is current
focus our monitoring activities more effectively.

Download the MIS manager regulatory return template.

Asia Region Funds Passport

New Zealand, Australia, Japan, Korea and Thailand are members of an arrangement called the Asia Region Funds Passport. The passport allows a managed fund based in one country to be offered more easily to investors in other participating countries. The passport arrangements are set out in the Financial Markets Conduct (Asia Region Funds Passport) Regulations 2019.

If you want to offer interests in a New Zealand registered MIS into another passport country you will first need to apply to the FMA under s 134(3) of the FMC Act for the scheme to be registered as a passport fund. For further information see here.

Fair dealing obligations

The FMC Act sets out minimum compliance standards of behaviour for people operating in the financial markets.

It prohibits:

misleading or deceptive conduct
false or misleading representations
unsubstantiated representations
offers of financial products in the course of unsolicited meetings.

Please contact us for reporting misconduct, making a complaint, or giving us a ‘tip-off’.

AML/CFT obligations

The Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (the Act) imposes several obligations:

You must provide a written risk assessment of the money laundering and financing of terrorism activity you could expect in the course of running your business.
You are required to implement an anti-money laundering and countering financing of terrorism programme that includes procedures to detect, deter, manage and mitigate money laundering and the financing of terrorism.
You are required to appoint a compliance officer to administer and maintain your programme.
You are required to perform due diligence processes on your customers. This includes customer identification and verification of identity.
You are required to report suspicious transactions.

The FMA supervises designated business groups (DBGs) and reporting entities listed in Section 130 of the Act. See more.