Pursuant to section 148 of the Financial Advisers Act 2008, the Financial Markets Authority (FMA) on 18 November 2016 granted the exemption contained in the Financial Advisers (GT Nominees Limited) Exemption Notice 2016.

The notice exempts GT Nominees Limited (“GT Nominees”) from compliance with Regulation 9 of the Financial Advisers (Custodians of FMCA Financial Products) Regulations 2014 (“Custodian Regulations”) in respect of FMCA custodial services provided to persons who are clients of GT Nominees as at the commencement of the notice, in respect of FMCA financial products held on behalf of those clients as at that date (“specified custodial services”), subject to the conditions that the value of FMCA financial products in respect of which the custodial services are provided, does not exceed $250,000.00 and that GT Nominees does not provide any other FMCA custodial services.

The FMA, after satisfying itself as to the matters set out in section 148(2) of the Act, considers it appropriate to grant an exemption because:

• the scope of the exemption is limited to the specified custodial services, and the exemption only applies for so long as the scale of FMCA custodial services provided by GT Nominees remains limited;
• the benefits of compliance are limited because of the limited scale of the FMCA custodial services provided by GT Nominees, including in particular the low value of the assets held, noting also that, pursuant to the Custodian Regulations, GT Nominees must still provide information to investors about client money and client property received, held, or paid;
• the limited scale of the FMCA custodial services being provided by GT Nominees, and in particular the low value of the assets held, means that the cost of obtaining an assurance report, as otherwise required by Regulation 9 of the Custodian Regulations, would be disproportionate in the context of risks and benefits, and would therefore be unreasonable or not justified by the benefits of compliance; and
• the portfolios to which the FMCA custodial services relate have been in wind-up since 2013. It is envisaged that the wind-up will be completed in 2017. The exemption facilitates the continued orderly wind-up of the portfolios, and incurring the costs of an assurance report would be unreasonable or not justified in the context of a portfolio that is in its last stages of being wound-up with a relatively low level of remaining assets. This is reflected in the duration of the exemption and the conditions of the exemption.

Copies are available on the Financial Markets Authority’s website

www.fma.govt.nz

Copies are also available for purchase on request to the Financial Markets Authority, Level 2, 1 Grey Street, Wellington, or Level 5, Ernst & Young Building, 2 Takutai Square, Britomart, Auckland, or by post to PO Box 1179, Wellington 6140.