Pursuant to section 38 of the Securities Markets Act 1988, the Financial Markets Authority gives the following notice.
N o t i c e
1. Title, commencement and expiry-(1) This notice is the Authorised Futures Dealers (Wholesale Dealers) Notice 2012.
(2) This notice comes into force on 1 September 2012.
(3) This notice expires on the close of 31 August 2017.
2. Interpretation-(1) In this notice, unless the context otherwise requires:
Act means the Securities Markets Act 1988.
designated wholesale dealer means a person named in the Schedule to this notice.
FMA means the Financial Markets Authority established by Part 2 of the Financial Markets Authority Act 2011.
recognised exchange means an authorised futures exchange or any exchange in a country other than New Zealand which is authorised by the laws of that country to operate as a futures exchange.
wholesale client means any client that is:
(a) a person who controls at least $10 million; or
(b) 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
(c) a person who is authorised to carry on the business of dealing in futures contracts under
the Act; or
(d) a person authorised in another jurisdiction by the competent authority of that jurisdiction to deal in futures contracts; or
(e) 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 to the State-Owned Enterprises Act 1986 (each as amended from time to time); or
(f) a person who is a statutory corporation or a registered bank; or
(g) 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
(h) a person who is a related body corporate of any of the persons mentioned in subparagraphs (a) to (g) above.
(2) Any term or expression that is defined in the Act and used, but not defined, in this notice has the same meaning as in the Act.
3. Authorisation-(1) Every designated wholesale dealer is authorised to carry on the business of dealing in futures contracts generally.
(2) The authorisation is subject to the conditions that:
(a) the designated wholesale dealer deals only on behalf of wholesale clients; and
(b) before dealing in any futures contract in respect of which the authorisation applies, the designated wholesale dealer 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
(c) the designated wholesale dealer does not carry
on the business of dealing in futures contracts on behalf of any wholesale client other than one who has entered into a written contract for services with the designated wholesale dealer, and then only in accordance with the terms of that contract; and
(d) the designated wholesale dealer does not hold client money or client property in connection with dealing in futures contracts; and
(e) the designated wholesale dealer notifies FMA of any material matter concerning the designated funds manager’s authorisation as a futures dealer, including any regulatory action taken concerning the designated wholesale dealer, whether in New Zealand or overseas; and
(f) the designated wholesale dealer provides FMA with a copy of the designated wholesale dealer’s audited financial statements no later than three months after the end of each financial year for the designated wholesale dealer.
4. Further condition relating to on-exchange dealing in futures contracts-The authorisation is subject to the further condition that, in respect of any futures contract to which this authorisation applies that is made on or effected through a recognised exchange, any acquisition or disposal of the contract is effected through a person who is an authorised participant or member of the recognised exchange and who is authorised or licensed by the laws of the country in which it operates to deal in futures contracts on behalf of that person and to hold client money for that purpose.
Schedule
Designated Wholesale Dealers
Arrowstreet Capital, Limited Partnership
Elementum Advisors, LLC
Elementum (Bermuda) Limited
M.S. Capital Management Limited
Pure Capital Limited
Dated at Wellington this 28th day of August 2012.
ELAINE CAMPBELL, Head of Compliance Monitoring, Financial Markets Authority.