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 (J.P. Morgan Securities LLC) Notice 2014.
(2) This notice comes into force on the day after the date of its notification in the New Zealand Gazette.
(3) This notice expires on the close of 30 September 2017.
2. Interpretation-(1) In this notice, unless the context otherwise requires:
Act means the Securities Markets Act 1988
CFTC means the Commodity Futures Trading Commission of the United States of America
clearing house means an entity that provides clearing and settlement services, or acts as a central counterparty, in respect of futures contracts or derivative contracts and is regulated by a financial markets regulator or central bank in respect of those services in its principal place of business; and includes an organisation that is registered with the CFTC as a derivative clearing organisation pursuant to the Commodity Exchange Act
Commodity Exchange Act means the Commodity Exchange Act of 1936 of the United States of America
FMA means the Financial Markets Authority established by Part 2 of the Financial Markets Authority Act 2011
JPMS means J.P. Morgan Securities LLC
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
SEC means the Securities and Exchange Commission of the United States of America
specified futures contract means a futures contract which is, or will be, cleared through, or is of a class of contracts which has been approved under the rules of a clearing house to be cleared through, the clearing facilities of a clearing house of which JPMS or a related company is a clearing member or participant
wholesale client means any person:
(a) who controls at least $10 million; or
(b) that is 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) who is authorised to carry on the business of dealing in futures contracts under the Act; or
(d) who is authorised in another jurisdiction by the competent authority of that jurisdiction to deal in futures contracts; or
(e) that is 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) who is a statutory corporation or a registered bank; or
(g) 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) 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 given to it by the Act.
3. Authorisation for wholesale persons
(1) JPMS is authorised to carry on the business of dealing in specified futures contracts.
(2) The authorisation in clause 3(1) is subject to the conditions that:
(a) JPMS deals only on behalf of wholesale clients; and
(b) before dealing in any futures contract in respect of which the authorisation applies, JPMS 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 a trustee of a trust or manager of a managed fund; and
(c) JPMS 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 JPMS, and then only in accordance with the terms of that contract; and
(d) in respect of any futures contract that is made on or effected through a recognised exchange, that 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 future contracts and to hold client money for that purpose; and
(e) JPMS is registered as a broker dealer with the SEC and a futures commission merchant with the CFTC; and
(f) JPMS notifies FMA if JPMS's registration with the SEC or the CFTC is varied or revoked; and
(g) JPMS notifies FMA of any regulatory action taken against it in relation to its financial markets activities, including any regulatory action taken by the SEC, the CTFC, a self-regulatory organisation, a recognised futures exchange or a clearing house; and
(h) JPMS provides FMA with a copy of its audited annual financial statements no later than three months after the end of each financial year for JPMS; and
(i) JPMS notifies FMA of any material matter concerning its authorisation as a futures dealer or its dealing pursuant to that authorisation.
Dated at Wellington this 18th day of March 2014.
ELAINE CAMPBELL, Head of Compliance Monitoring, Financial Markets Authority.