FMCA and FMC regulations implementation update

​The Ministry for Business, Innovation and Employment has today published a progress update on regulations to fully implement the Financial Markets Conduct Act (FMCA) from 1 December 2014.   

We highlight the key milestones to come.

Key developments

  • Formal consultation on three earlier exposure drafts is nearing completion, and MBIE is now working to compile the full set of FMC regulations.
  • Cabinet will make further policy decisions soon, and MBIE will provide a further update at that point.
  • MBIE plans to publish a near-final version of the FMC Regulations before the election, to assist planning by industry, with the final regulations to be made in October 2014 ahead of the 1 December 2014 commencement.
  • FMA recently advised it plans to consult on exemptions and guidance for offers in August 2014.

Summary of timetable for implementation

1 April 2014                              ​Phase 1 of FMCA commenced comprising general fair dealing obligations and the key growth-focussed initiatives (same class offers, employee share schemes, crowd-funding)
​1 December 2014 ​FMCA fully commences, comprising the new disclosure requirements, go-live of the online registers, licensing obligations and the remainder of the Act
by 1 June 2015 ​Existing DIMS providers may apply for a licence, and will have until 1 December 2015 to update their client documentation.  New providers will need to comply from 1 December 2014
December 2015​ ​Transitional period ends for most equity, debt issuers
​December 2016 ​Transitional period ends for managed investment products, non-bank deposit takers, other continuous issuers of securities, and futures contracts

New KiwiSaver schemes and superannuation schemes must register under the FCMA and comply with the new regime from 1 December 2014.

Appendix: Overview of the key elements of the full FMC Regulations

Part 1 – Preliminary provisions

Part 2 – Fair dealing (part 2 of first exposure draft of regulations)

Part 3 – Disclosure of offers of financial products

Part 4 – Governance of financial products (part 4 of second exposure draft of regulations)

Part 5 – Dealing in financial products of markets (part 5 of second exposure draft of regulations)

Part 6 – Licensing and other regulation of market services

Licensing (part 4 of phase 1 regulations)

Disclosure obligations for peer-to-peer and crowd funding services (part 4 of phase 1 regulations)

Part 7 – Financial Reporting (part 5 of phase 1 regulations)

Part 8 – Enforcement, liability, and appeals (part 6 of phase 1 regulations)

Part 9 – Mutual recognition and miscellaneous matters (part 2 of third exposure draft regulations)


Transitional provisions (part 7 of phase 1 regulations, but modifications and additions will be required, DIMS supplement to third exposure draft)

  • Disclosure schedules for financial products and discretionary investment management services (Schedules in third exposure draft of regulations and DIMS supplement)
  • Limited disclosure schedule and other provisions for Schedule 1 of Act (Schedule 1 of first exposure draft of regulations and phase 1 regulations.  Note that some of this schedule was commenced in phase 1 of the regulations (eg, exemption for small offers), but other provisions, particularly those requiring disclosure documents, were held over to commence in phase 2 eg, requirements for a “Schedule 1 disclosure document” for government bonds.)
  • Other schedules for governance (Schedules in second exposure draft of regulations)
  • Other schedules for financial product markets (Schedules in second exposure draft of regulations)

Other schedules for enforcement (Schedules in phase 1 regulations)

For further information, please contact the lawyers featured.

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Related topics: Financial services regulation; Financial Markets Conduct legislation

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