Notice Type
Authorities/Other Agencies of State
Notice Title

The Authorised Futures Dealers Notice 2008

Pursuant to section 38 of the Securities Markets Act 1988, the Securities Commission gives the following notice.
N o t i c e
Clause 1: Title, commencement and expiry—(1) This notice is the Authorised Futures Dealers Notice 2008.
(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 31 March 2013.
Clause 2: Interpretation—(1) In this notice, unless the context otherwise requires:
“Act” means the Securities Markets Act 1988.
“AFS Licence” means an Australian financial services licence granted under the Corporations Act 2001.
“ASIC” means the Australian Securities and Investments Commission.
“Commission” means the Securities Commission.2
“company” means HiFX Limited.
“Corporations Act 2001” means the Corporations Act 2001 of the Commonwealth of Australia.
“product disclosure statement” means a document:
(a) that describes and contains the offer of, and relates specifically to, the specified futures contracts;
(b) that is identical to a document that is:
(i) a product disclosure statement in terms of the Corporations Act 2001; and
(ii) signed by the persons (if any) who are required by law to sign that document;
(c) by means of which it is lawful under the laws of Australia to make an offer of the specified futures contracts to the public in Australia; and
(d) that is not an “offer information statement” or “profile statement” (as those terms are defined in section 9 of the Corporations Act 2001).
“Regulations” means the Futures Industry (Client Funds) Regulations 1990.
“specified futures contract” means a futures contract that is a forward foreign exchange contract, that is issued by the company and described in the product disclosure statement.
(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.
Clause 3: Retail and Wholesale Client Authorisation—(1) The company is authorised to carry on the business of dealing in specified futures contracts to which the company is, or intends to be, a party.
(2) The authorisation in this clause 3 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) the company is licensed as an Australian Financial Services Licensee under the Corporations Act 2001 and holds an AFS Licence which authorises the company to advise retail and wholesale clients on, and deal with or on behalf of retail and wholesale clients in, specified futures contracts;
(c) there is a product disclosure statement relating to
the specified futures contracts at the time that the specified futures contracts are made available to New Zealand investors or the company gives advice or assistance to, or induces or attempts to induce, New Zealand investors in relation to the acquisition or disposal of any specified futures contract;
(d) before the company enters into a specified futures contract with any person, that person has received copies of the following:
(i) A product disclosure statement relating to that specified futures contract; and
(ii) every supplementary product disclosure statement relating to that specified futures contract in use at the time of the entry by
the company into the specified futures contract;
(e) the company must hold client funds in a segregated client funds account as if the funds were subject to the provisions of its AFS licence, the Corporations Act 2001 and any regulations made under the Corporations Act 2001 in relation to the protection of client money and client property;
(f) 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 company’s AFS Licence;
(g) the company maintains adequate professional indemnity insurance for its business at all times;
(h) the company maintains at all times an external dispute resolution scheme that is available to its New Zealand clients who are members of the
public; and
(i) at the same time as the specified futures contracts are made available by the company to New Zealand investors in reliance on the authorisation in this notice, those specified futures contracts are also made available to Australian investors in accordance with the laws of Australia.
Clause 4: Wholesale Client Advisory Authorisation—(1) The company is authorised to carry on the business
of dealing in futures contracts that consists of advising
or assisting a person in connection with the acquisition or disposal of futures contracts that are forward foreign exchange contracts to which the company is not, and does not intend to be, a party.
(2) The authorisation in this clause 4 is subject to the conditions that:
(a) the company does not hold client money or client property in connection with such dealings in futures contracts; and
(b) the company does not carry on the business of dealing in such futures contracts on behalf of 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; and
(c) the company deals in such futures contracts only on behalf of its wholesale clients, being any client
that is:
(i) a person who controls at least $10 million; or
(ii) a trustee of a trust or a funds manager, acting in that capacity, who has under that person’s control, as trustee or funds manager, net assets of at least $10 million; or
(iii) a person who is authorised to carry on the business of dealing in futures contracts under the Act; or
(iv) a person authorised in another jurisdiction by the competent authority of that jurisdiction to deal in futures contracts; or
(v) Her Majesty The Queen in right of
New Zealand, a Crown entity named in the Crown Entities Act 2004, or a State enterprise named in the First or Second Schedule of
the State-Owned Enterprises Act 1986 (each as amended from time to time); or
(vi) a person who is a statutory corporation or a registered bank; or
(vii) a person whose principal business is the investment of money or who, in the course
of and for the purposes of their business, habitually invests money; or
(viii) a person who is a related body corporate
of any of the persons mentioned in (i) to
(vii) above; and
(d) before dealing in any futures contract in respect of which the authorisation in this clause 4 applies, the company is satisfied on reasonable grounds that
the wholesale client is contracting:
(i) as principal on its own account; or
(ii) on behalf of a related body corporate; or
(iii) as trustee of a trust or manager of a managed fund; and
(e) the terms of any such futures contract:
(i) create obligations that cannot be transferred or terminated by either party to the futures contract without the consent of the other party; or
(ii) require that the transfer of obligations under the futures contract can be made only to a person who meets the criteria described in subclauses 4(2)(c) and (d).
Clause 5: Further Conditions Relating to Dealing in Futures Contracts—The authorisations in clauses 3 and 4 are also subject to the conditions that the company:
(a) notifies the Commission if the company’s AFS Licence is varied or revoked and notifies the Commission of any regulatory action taken by ASIC in relation to the company’s AFS Licence; and
(b) provides the Commission with a copy of the company’s audited financial statements no later than three months after the end of each financial year for the company; and
(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 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 Commission has not approved any agreements or any disclosure documents of the company; and
(d) 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 or senior management;
(ii) if the company, or any of its directors or senior management, 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;
(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; and
(vi) if any auditor’s report prepared in accordance with the company’s AFS Licence shows
any non-compliance with the company’s AFS Licence or the Corporations Act 2001.
Dated at Wellington this 1st day of April 2008.
The Common Seal of the Securities Commission was affixed in the presence of:
[L.S.]
JANE DIPLOCK, Chairperson.