Insight into the Financial Markets Conducts Act 2013


Investment law in New Zealand is undergoing the most significant regulatory overhaul in more than 30 years. Cavell Leitch is at the forefront of this new regime. With substantial experience in New Zealand and overseas, we are leading our clients through the challenging technical aspects of investment law and describing the legislation in plain English to ensure they receive the highest quality advice to enable them to achieve their goals.

New Legislation

The Financial Markets Conduct Act 2013 (Act) was passed into law in September 2013 and various parts of the Act came into effect between then and 1 December 2014. The Act replaces a number of pieces of legislation, principally the Securities Act 1978 and the Securities Markets Act 1988. 

The Act was seen as a once in a generation opportunity to re-write New Zealand’s investment law in an integrated and coherent manner.The previous legislation had been subject to decades of ad hoc reform and parts of it had become unclear and difficult to understand. The Act seeks to restore investor confidence and develop fair, efficient and transparent financial markets.

Key changes under the Act

The most notable change under the new Act is replacing the requirement for issuers to prepare an investment statement and prospectus with a requirement to prepare a single product disclosure statement or PDS (which should be short, clear and concise) and to enter other material information in an online register of offers of financial products, which can be easily updated over time. The intentions are to reduce the amount of “less relevant” information previously provided to investors and to reduce the cost and time involved.

Other key changes include:

  • Replacing the concept of “offers to the public” with a distinction between “regulated offers” and “excluded offers” based on a retail/wholesale boundary;

  • replacing the old terminology of equity, debt and participatory securities with the new categories of “financial products”, being equity securities, debt securities, managed investment products and derivatives; and

  • the establishment of licensing regimes for specific financial sector participants, including fund managers, independent trustees of restricted schemes, providers of discretionary investment management services (DIMS), derivatives issuers and prescribed intermediaries (including crowd funding and peer to peer lending platforms).


Employee Share Schemes:  The process for offering financial products to employees and directors under employee share purchase schemes has become clearer and simpler (see link below to article on employee share purchase schemes).

Small Offers:  Businesses also have the opportunity to make “small offers” of debt or equity securities to investors, provided that such offers are “personal offers” and that they do not exceed the limits of 20 persons (to whom securities are issued) and $2 million (raised from such issues) in any 12 month period. See link below to article on start up businesses having better access to investors.

Prescribed Intermediary Services:  The Act also provides for prescribed intermediary services, such as:

  • Equity crowd funding, which consists of a (usually online) platform hosted by a licensed intermediary to facilitate the matching of companies who wish to raise funds with many investors who are seeking to invest relatively small amounts (see link below to article on equity crowd funding); and

  • Peer to peer lending, which involves the provision of a (usually online) facility by a licensed intermediary to match investors (lenders) who are seeking to offer debt securities (or loans) with issuers (borrowers) who require loans for personal, charitable or small business purposes (see link below to article on peer to peer lending).

If you are interested in hearing more about these changes in law and how your business may benefit under the new Act, please contact a member of our Business Team. Our Business Team members specialise in investment law compliance, employee share schemes, start up businesses, restructuring, commercial contracts and transactions and general business compliance advice.


Useful articles:

Employee Share Schemes under the new Financial Markets Conduct Act 2013

Start up businesses to have better access to investors

Equity crowd funding is about to take off in NZ

First peer to peer lending licence issued


[DISCLAIMER: The content of this document is general in nature and is not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.]


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