pc
nid 92367
May 05, 2026
kgurnani@vixio.com
New Zealand
Financial Markets Authority
financial services
135% of draft length
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1601 charsNew Zealand's Financial Markets Authority Seeks Feedback on Related Party Transactions Guidance
On May 4, 2026, the Financial Markets Authority (FMA) launched a consultation seeking feedback on a draft paper explaining its position on related party transactions involving registered managed investment schemes (MIS).
The consultation paper outlines the FMA's interpretation of related party transaction provisions under the Financial Markets Conduct Act 2023. It addresses the rationale behind these provisions, provides a legislative overview, and clarifies how the FMA expects key aspects of the requirements to be applied in practice. The paper is designed to provide MIS managers and supervisors with greater clarity on the application of existing law. The FMA has clarified that the paper does not introduce new obligations, change current legal requirements, or cover related party transaction rules applicable to Derivatives Investment Management Services (DIMS) licensees or Financial Markets Conduct (FMC) reporting entities for financial reporting purposes.
The consultation is open to all stakeholders with an interest in managed investment schemes and related party transaction compliance. The FMA is seeking feedback to support the development and refinement of this guidance document.
Submissions must be received by Friday, June 12, 2026. Responses should be submitted using the consultation submission form provided, or alternatively via email to [email protected]. The consultation paper and submission form are available on the FMA website.
**References:**
Financial Markets Authority. Consultation: Related party transactions insights. Available at: https://www.fma.govt.nz/
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2163 charsNew Zealand's Financial Markets Authority Seeks Feedback on Related Party Transactions Guidance
New Zealand's Financial Markets Authority (FMA) launched a consultation seeking feedback on a draft paper explaining its position on related party transactions involving registered managed investment schemes (MIS).
The consultation paper outlines the FMA's interpretation of related party transaction provisions under the Financial Markets Conduct Act 2013 , to ensure consistent market behavior and reduce investor harm. It emphasizes that while related party transactions are generally prohibited, they are permitted if they meet specific exceptions, such as being on arm’s-length terms.
The guidance introduces several key interpretations regarding the nature of benefits and the scope of transactions:
Broad definition of "Benefit": The FMA adopts the ordinary meaning of "benefit" and notes it is not limited to financial gains; it can include increased scale, improved liquidity, or reduced funding costs for a related party.
Indirect transactions: Related party rules apply to the "substance and purpose" of a transaction. If a manager knows that investing through an intermediary will ultimately benefit a related party downstream, the entire arrangement may be considered a related party transaction.
Arm's-length exception: To rely on this common exception, managers must demonstrate that terms are no more favorable to the related party than those negotiated between independent, knowledgeable parties.
Certification and notification: Managers must notify supervisors and provide a Related Party Certificate (RPC) before entering a transaction. This certificate must include "reasonable evidence" to support the claim that the transaction is permissible.
The FMA also outlines a risk-based approach, expecting higher levels of scrutiny, independent valuations, and more robust documentation for complex, novel, or illiquid transactions. For a series of transactions, a single RPC may be used only if the key terms are certain and remain materially the same over time; otherwise, these must be kept under constant review.
Submissions must be sent to consultation@fma.govt.nz using the submission form attached to the FMA announcement by 12 June.