Notice Type
Authorities/Other Agencies of State
Notice Title

The Authorised Futures Dealers Notice (No. 2) 2006

Pursuant to section 38 of the Securities Markets Act 1988, the Securities Commission (“Commission”) gives the following notice.
N o t i c e
1. Title, commencement and expiry—(1) This notice is the Authorised Futures Dealers Notice (No. 2) 2006.
(2) This notice comes into force on the day after the date of its publication in the New Zealand Gazette.
(3) This notice expires on the close of 30 April 2011.
2. Interpretation—(1) In this notice, unless the context otherwise requires:
“Act” means the Securities Markets Act 1988.
“Australian Financial Services Licence” means a financial services licence issued under chapter 7 of the Corporations Act 2001.
“CMC” means CMC Markets Asia Pacific Pty Limited.
“company” means CMC Markets NZ Limited.
“Corporations Act 2001” means the Corporations Act 2001 of the Commonwealth of Australia.
“disclosure document” means a document that:
(a) describes and contains the offer of, and relates specifically to, the specified futures contracts; and
(b) includes all material matters applicable to the specified futures contracts from the current product disclosure statement issued by CMC in Australia under the Corporations Act 2001, with such changes as are necessary to:
(i) reflect the identity of the company as the issuer of the specified futures contracts;
(ii) exclude matters that are only relevant to the requirements of CMC’s Australian Financial Services Licence; and
(iii) reflect that the offer is made in New Zealand.
“qualified auditor” has the same meaning as in section 2C of the Securities Act 1978.
“Regulations” means the Futures Industry (Client Funds) Regulations 1990.
“specified futures contract” means a futures contract that is:
(a) a contract for difference; or
(b) an option in respect of foreign currency or other forward foreign exchange contract,
that is issued by the company and described in the disclosure document.
(2) Any term or expression that is defined in the Act or the Regulations and used, but not defined, in this notice has the same meaning as in the Act or the Regulations.
3. Authorisation—(1) The company is authorised to carry on the business of dealing in specified futures contracts.
(2) The authorisation only applies to specified futures contracts to which the company is, or intends to be, a party.
(3) The authorisation is subject to the conditions that:
(a) the company does not enter into specified futures contracts with any person other than a person who has entered into
a written agreement with the company, and then only in accordance with the terms of that agreement;
(b) before the company enters into a specified futures contract with any person, that person has received a disclosure document that contains the following information:
(i) the name and contact details of the company;
(ii) information about any significant benefits to which a holder of a specified futures contract will or may become entitled, the circumstances in which and times at which those benefits will or may be provided, and the way
in which those benefits will or may be provided;
(iii) information about any significant risks associated with holding a class or classes of specified futures contract;
(iv) information about:
(A) the cost of a specified futures contract; and
(B) any amounts that will or may be payable by a holder of a specified futures contract in respect of that specified futures contract after its acquisition, and the times at which those amounts will or may be payable;
(v) information about any other significant characteristics or features of a specified futures contract or of the rights, terms, conditions and obligations attaching to a specified futures contract;
(vi) general information about any significant taxation implications associated with a specified futures contract;
(vii) a statement describing how other information relating to a specified futures contract that is made available by
the company to holders or prospective holders of a specified futures contract, or to people more generally, may be accessed;
(viii) a statement that the company will hold and disburse client money in accordance with the Regulations as if
the company were a dealer for the purposes of those Regulations;
(ix) the date of the disclosure document; and
(x) any other material matters applicable to a specified futures contract;
(c) any company document that states the company has been authorised by the Commission to carry on the business of dealing in futures contracts includes a statement to the effect that:
(i) the Securities Commission’s role in authorising futures dealers is limited and does not imply approval
or endorsement of the business, trading or solvency of the company; and
(ii) the Securities Commission has not approved any agreements or any disclosure documents of the company;
(d) the company maintains proper records:
(i) to record dealings in respect of specified futures contracts with clients;
(ii) to record client money, funds and property held or received in connection with dealings in specified futures contracts; and
(iii) which are audited or reviewed, and reported on, in accordance with the Regulations and the Financial Reporting Act 1993;
(e) the company’s financial statements are prepared and registered on the basis that the company is an issuer in terms
of the Financial Reporting Act 1993 and are audited at least once a year by a qualified auditor under the Financial Reporting Act 1993;
(f) the company sends a copy of its audited financial statements to the Commission not more than three months after the end of each financial year;
(g) the company maintains adequate professional indemnity insurance for its business at all times; and
(h) the company immediately notifies the Commission in writing of any of the following events:
(i) the insolvency of the company or the bankruptcy of any of its directors;
(ii) if the company, or any of its directors, is convicted of an indictable offence;
(iii) where a receiver, provisional liquidator, liquidator or a similar officer is appointed, or any resolution is passed
or order made for the winding up or dissolution of the company;
(iv) any regulatory action taken against the company, or any of its directors or senior management whether in
New Zealand or elsewhere; and
(v) if any director or member of the senior management leaves the company or if any new director or member of senior management is appointed to the company.
Dated at Wellington this 11th day of April 2006.
The Common Seal of the Securities Commission was affixed in the presence of:
[L.S.]
J. DIPLOCK, Chairperson.