Pursuant to section 38 of the Securities Markets Act 1988, the Securities Commission gives the following notice.
N o t i c e
1. Title, commencement and principal notice—(1) This notice is the Authorised Futures Dealers Notice (No. 3) 2005 Amendment Notice 2007.
(2) This notice comes into force on the day after the date of its publication in the New Zealand Gazette.
(3) This notice amends the Authorised Futures Dealers Notice (No. 3) 2005*.
2. New clause inserted—(1) The following clause is inserted into the Authorised Futures Dealers Exemption Notice (No. 3) 2005:
3(3) The authorisation is subject to the further conditions that:
(a) before the company sells a futures contract of a particular class to a member of the public, the company must have provided that person with a disclosure document that includes information that would enable a prudent but non-expert investor to make a decision about whether to invest in a futures contract of that class; and
(b) the disclosure document given to that person must not, at the time the contract is entered into, be likely to deceive, mislead or confuse with regard to any particular that is material to the offer of the futures contract contained or referred to in that disclosure document; and
(c) the disclosure document must include at the front of the disclosure document a statement describing a client’s right to receive investment advisers disclosure in terms of clause 3(2)(c) of this notice; and
(d) the disclosure document must state, in a prominent place, the date as at which the disclosure document was prepared; and
(e) the disclosure document must contain all of the following information that is applicable to the class or classes of futures contracts to which the disclosure document relates:
(i) a description of the key features of that class or those classes of futures contracts;
(ii) the name and contact details of the company;
(iii) a description of the amounts payable, or the method of calculating the amounts payable, by a person to the company in respect of that class or those classes of futures contracts, including the consequences of failing to make any payments;
(iv) a description of the types of fees or charges payable by a person, directly or indirectly, to the company in respect of that class or those classes of futures contracts;
(v) a description of the rights of the company or any other person to alter any of the fees or charges applicable to that class or those classes of futures contracts;
(vi) a description of the nature of any amounts or returns that may be payable, or the method of calculating any amounts or returns that may be payable, by the company to a person in respect of that class or those classes of futures contracts;
(vii) a description of the key factors that determine the amounts or returns that may be payable by the company to a person in respect of that class or those classes of futures contracts;
(viii) a description of the principal risks associated with entering into that class or those classes of futures contracts, including any specific risk factors that apply to any one or more of the particular futures contracts;
(ix) if it is reasonably foreseeable that, at the end of the arrangement relating to that class or those classes of futures contracts, a person will have received, in total, less than the amount paid to the company for
the futures contracts, a statement to this effect and a brief description of the circumstances that may produce this result;
(x) a description of the parties’ rights to alter the terms of that class or those classes of futures contracts;
(xi) a description of the parties’ rights to terminate, cancel, surrender, or otherwise make or obtain payment of any amounts or returns in respect of that class or those classes of futures contracts, other than as described in paragraphs (vi) and (vii);
(xii) a statement whether a person is entitled to sell his or her interest in a futures contract to another person and, if so, whether in the opinion of the company there is an established market for such sales;
(xiii) the names or descriptions, and the addresses and business telephone numbers, of officers, employees or agents of the company to whom enquiries about the futures contracts can be made, and to whom complaints about the futures contracts can be made;
(xiv) a statement to the effect that other information about the company is contained or referred to in financial statements of, or relating to, the company and where a copy of the latest financial statements may be obtained from;
(xv) a statement of the type of information that is required to be, or otherwise will be, given annually to subscribers;
(xvi) a statement describing the type of information that is required to be, or otherwise will be, available on request from the company;
(xvii) a statement explaining how a request made under paragraph (xvi) should be made;
(xviii) a statement whether any charge may be made for the information referred to in paragraph (xvi) and the amount of any charge;
(xix) any other material matters applicable to that class or those classes of futures contracts.
3(4) If a matter specified in clause 3(3)(e) is not applicable to the class or classes of futures contracts to which a disclosure document relates, the disclosure document is not required to refer to that matter, and is not required to state that the matter is not applicable.
3(5) Nothing in this clause limits the information, statements or other matters that may be contained in a disclosure document.
Dated at Wellington this 18th day of December 2007.
The Common Seal of the Securities Commission was affixed in the presence of:
JANE DIPLOCK, Chairperson.
*New Zealand Gazette, 24 November 2005, No. 196, page 4923