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 (Velocity Trade Limited) Notice 2011.
(2) This notice comes into force on the day after the date of its publication in the New Zealand Gazette.
(3) The Authorised Futures Dealers (Latitude FX Limited) Notice 2009, published in the New Zealand Gazette,
19 February 2009, No. 20, page 480, is revoked.
(4) This notice expires on the close of 28 February 2013.
2. Interpretation-(1) In this notice, unless the context otherwise requires:
Act means the Securities Markets Act 1988.
advertisement has the meaning given to it in section 2A of the Securities Act 1978, except that every reference to securities should be read as a reference to specified futures contracts, and every reference to the issuer should be read as a reference to the Company.
AFS Licence means an Australian financial services licence granted under the Corporations Act 2001.
ASIC means the Australian Securities and Investments Commission.
Company means Velocity Trade Limited.
disclosure document means a written document that:
(a) describes and contains the offer of, and relates specifically to, a particular class, or particular classes, of the specified futures contracts; and
(b) is identical to a document that is a product disclosure statement, other than such changes or additional information as is necessary to:
(i) reflect that the offer is made in New Zealand; and
(ii) comply with the requirements of this notice, including the requirements set out in clause 4.
product disclosure statement means a document that:
(a) is a product disclosure statement in terms of the Corporations Act 2001 issued by the Company;
(b) is signed by the persons (if any) who are required by law to sign that document; and
(c) is not an "offer information statement" or "profile statement" (as those terms are defined in section 9 of the Corporations Act 2001).
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 issued by the Company and described in a 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) the Company is licensed as an Australian Financial Services Licensee under the Corporations Act 2001 and holds an AFS Licence that authorises the Company to advise retail and wholesale clients on, and to deal with retail and wholesale clients in, specified futures contracts;
(c) the Company 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 its AFS Licence;
(d) 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;
(e) before the Company enters into a specified futures contract with any person, that person has received a disclosure document relating to that specified futures contract;
(f) every advertisement for a specified futures contract must refer to a disclosure document that relates
to the specified futures contracts referred to in the advertisement;
(g) no advertisement shall contain any information, sound, image or other matter that is inconsistent
with any disclosure document referred to in the advertisement;
(h) 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;
(i) the Company holds client funds in a segregated client money account in accordance with the provisions of the 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; and;
(j) the Company maintains proper records:
(i) to record dealings in respect of specified futures contracts with clients;
(ii) to record client money or property received, held or otherwise dealt with 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 and the Financial Reporting Act 1993;
(k) the Company’s financial statements are prepared and registered as if 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;
(l) 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;
(m) the Company maintains adequate professional indemnity insurance for its business at all times;
and
(n) the Company immediately notifies the Commission in writing of any material matter concerning
the Company’s authorisation as a futures dealer, including the following events:
(i) The insolvency of the Company or the bankruptcy of any of its directors;
(ii) if any auditor’s report prepared in accordance with the Company’s AFS Licence shows any non-compliance with that AFS Licence or the Corporations Act 2001;
(iii) where a receiver, provisional liquidator, liquidator or a similar officer is appointed,
or any resolution is passed or order made for the liquidation or dissolution of the Company;
(iv) if the Company, or any of its directors, is convicted of an indictable offence;
(v) any regulatory action taken against the Company, or any of its directors or senior management whether in New Zealand or elsewhere; and
(vi) 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.
4. Further conditions relating to disclosure documents-(1) The disclosure document must include information that would enable a prudent but non-expert investor to make a decision about whether to invest in a specified futures contract of that class.
(2) The disclosure document must include at the front of the disclosure document a statement describing a clients’ right under the Act to receive investment advisers’ disclosure from any person who gives the client investment advice in relation to the specified futures contract.
(3) The disclosure document must remain up to date and continue to comply with clause 4 at all times, and may be amended by the Company at any time for this purpose.
(4) The disclosure document must state, in a prominent place, the date as at which the disclosure document was prepared, and the date of every amendment that has been made to that disclosure document.
(5) The disclosure document must contain all of the following information that is applicable to the class or classes of specified futures contracts to which the disclosure document relates, and must continue to contain all of the following information at the time the specified futures contract is entered into:
(a) A description of the key terms and features of that class or those classes of specified futures contracts;
(b) the name and contact details of the Company;
(c) 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 specified futures contracts, including the consequences of failing to make any payments;
(d) a description of the amounts, or the method of calculating the amounts, of any margins, including initial margins and variation margins, payable by a person to the Company in respect of that class or those classes of specified futures contracts, including the consequences of failing to pay any margin;
(e) a description of the treatment of margins, including initial margins and variation margins, payable by a person to the Company in respect of that class or those classes of specified futures contracts;
(f) 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 specified futures contracts;
(g) 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 specified futures contracts;
(h) 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 specified futures contracts;
(i) 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 specified futures contracts;
(j) a description of the principal risks associated with entering into that class or those classes of specified futures contracts, including any specific risk factors that apply to any one or more of the particular specified futures contracts;
(k) if it is reasonably foreseeable that, at the end of
the arrangement relating to that class or those classes of specified futures contracts, a person will have received, in total, less than the amount paid to
the Company for the specified futures contracts, a statement to this effect and a brief description of
the circumstances that may produce this result;
(l) a description of the parties’ rights to alter the terms of that class or those classes of specified futures contracts;
(m) 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 specified futures contracts, other than as described in paragraphs (h) and (i);
(n) a statement as to whether a person is entitled to sell his or her interest in a specified futures contract to another person and, if so, whether in the opinion of the Company there is an established market for such sales;
(o) a description of the treatment of client money
or property received, held or otherwise dealt with
in connection with dealing in specified futures contracts, other than as described in paragraph (e);
(p) the names or descriptions, and the addresses and business telephone numbers, of officers, employees, or agents of the Company to whom enquiries about the specified futures contracts can be made, and
to whom complaints about the specified futures contracts can be made;
(q) 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;
(r) a statement of the type of information that is required to be, or otherwise will be, given to clients periodically;
(s) a statement describing the type of information that
is required to be, or otherwise will be, available
on request from the Company, and a statement explaining how a request for this information should be made;
(t) a statement whether any charge may be made for
the information referred to in paragraph (s) and the amount of any charge; and
(u) any other material matters applicable to that class or those classes of specified futures contracts.
(6) If a matter specified in clause 4(5) is not applicable to the class or classes of specified 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.
(7) Nothing in clause 4(5) limits the information, statements, or other matters that may be contained in a disclosure document.
Dated at Wellington this 29th day of March 2011.
The Common Seal of the Securities Commission was affixed in the presence of:
[L.S.]
JANE DIPLOCK AO, Chairperson.