Maintain high standards of corporate governance and board behaviour
This handbook assists directors, executives and advisers of non-listed and public-sector companies, and other entities, to apply corporate governance principles to their particular entity. The principles do not impose any new legal obligations, and reporting against them is voluntary. However, the principles do set out standards for corporate governance that we believe directors and executives should apply, and report on, to their investors, shareholders and stakeholders.
Reporting duties under Part 4 FMC Act
Information sheet: Reporting duties under Part 4 FMC Act
- Provide prescribed reports to supervisor – to be prescribed by Regulations (section 114).
- Provide requested information and reports to supervisor (section 115).
- Report contravention or possible contravention of issuer obligations to supervisor (section 116).
- Report serious financial problems to supervisor (section 118).
- Duty of NBDT to provide reports to supervisor (FMC Regulations).
Additional obligations of listed issuers
A listed issuer is one who is party to a listing agreement with a licensed market operator for a licensed market.
Listed issuers must comply with the listing rules of the relevant licensed market, as set by the licensed market operator. These issuers, and certain persons related to them, also have ongoing disclosure obligations.
- Listed issuers are required to disclose information to the market in accordance with any continuous disclosure provisions of the listing rules of the relevant licensed market.
- The continuous disclosure provisions may vary between different licensed markets.
- Directors and senior managers of listed issuers, and persons holding specified amounts of quoted voting products of a listed issuer are required to disclose certain information to the issuer and to the market by the FMC Act. Listed issuers are required to keep registers of that disclosed information.
Debt issuer relationships and accountabilities
With supervisors
The FMC Act encourages and expects increased supervisor interaction. The FMC Act supports this through the accountability and reporting framework it establishes. On an ongoing basis, your supervisor has a requirement to engage and monitor you more actively. You also have obligations to engage and interact effectively and collaboratively with your supervisor. We expect you to work effectively with your supervisor to ensure governing documents are effective and fit for purpose.
With FMA
Your supervisor is your ‘front line’ compliance supervision relationship. This means you will first need to address issues raised by your supervisor directly with them, not with FMA. Your supervisor may seek our involvement if necessary or desirable. We will have an increased focus on working with and through your supervisor in the first instance wherever appropriate, rather than directly with you. In some circumstances, it may be appropriate for us to engage directly with you and in those cases, we will keep your supervisor informed.
Peer-to-peer lending borrowers obligations
Normally if you want to borrow money direct from the public, the FMC Act requires you to issue a product disclosure statement (PDS).
- You do not need to prepare these documents if you are using a licensed peer-to-peer lending provider. Instead you will provide information about your loan request to your provider so they can present your request for investors to read.
- Licensed providers are not obligated to accept you as a borrower. They will run some checks on you and if you've got a bad credit history they may decide they won't help you find money.
- If you are accepted, you will become a client of the peer-to-peer lending service. The provider will ask you to sign a client agreement that details what you need to do so the provider can monitor and check you.
- The service provider can charge for their services.
Crowdfunding issuers obligations
Under exemptions in financial markets law:
- crowdfunding issuers don't need to prepare a product disclosure statement.
- your crowdfunding service provider may be able to help you make a compliant offer.
- the provider will ask you to sign a client agreement that details what you need to do so the provider can monitor and check you.
- they may charge you for their services.
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 Reporting misconduct, making a complaint, or giving us a ‘tip-off’.
