Investment products.

For every investment held with it, a regulated financial services provider must provide annually a statement with at least the following,

  • opening balance,
  • closing balance
  • withdrawals,
  • total sums invested,
  • number of units held,
  • all interest, charges, and deductions affecting the product including charges associated with management sale, set up an ongoing administration
  • closing balance and statement or statement of value

A producer of a tracker bond must issue a statement within five days of the start of the bond to a consumer to whom it sold the bond or to an intermediary setting out

  • name and address of consumer,
  • date of investment,
  • amount of investment,
  • date on which minimum payment is payable,
  • disclosure of the make-up of investment if it differs from the key features document
  • date of maturity
  • date of maturity, any right of cancellation applicable

It is sent to the intermediary and the intermediary must within five days of receiving the document, provide it to the consumer who purchased the tracker bond

Investment products

Prior to offering, recommending, or arranging an investment product other  than a tracker bond, a regulated entity must provide the consumer with the following information where relevant:

Capital security.

  • The risk with some or all of the investment may be lost.
  • Leverage and its effects.
  • Limitation on sale or disposal.
  • Restriction on access to funds.
  • Restrictions on redemption.
  • Impact including the cost of exiting the product early
  • minimum recommended investment period.
  • The risk that the estimated or anticipated turn will not be achieved.
  • Potential effects of volatility on price fluctuation in interest rates, movements in the exchange rate.
  • Level, nature, and extent in limitations of guarantees and name of the guarantor.

The information must be provided in a stand-alone document except where  provided under, required under the life Insurance provision of information regulations.

A regulated entity must include a warning to the effect that the figures are estimates and are not a reliable guide to future performance of the investment.

Where a prospectus represents the terms of contract this must be clearly stated in the prospectus. This does not apply to the standard company floatation prospectus.

A regulated entity must provide information in a prominent position in a tracker bond brochure and application form:

The following warnings are required in bold, boxed and in prescribed terms

  • Where a 100 percent return on maturity is not guaranteed on maturity, a warning to the effect the value of the investment may down as well as up
  • Where the promised return is known but is less than 100 percent, that the stated percentage may be lost.
  • If the promised return is only applicable on a specified date, that this is so.
  • If there were no access to the erm of the product, that this is so
  • The nature extent and limitations of guarantees attached must be specified.

A product producer of the tracker bond must produce and issue a key features document as set out in the code.  Where the information is otherwise required under the life insurance provision of information regulations this may be produced in the alternative.

The key features document must be furnished prior to the consumer signing an application for a tracker bond. Where relevant, the document must explain to the consumer that the return in investment will be capped or limited.

Where lending is offered to invest in the tracker bond the regulated provider must give the consumer an illustration showing

annual and  total interest payments in respect of borrowed funds equivalent to the compound annual rate of the promised payment or equivalent, if unfixed,

the equivalent compound annual rate of the payment under the tracker

the  difference between the promised payment and the total projected outgoings of the consumer both payments of interest and repayments.

Prior to offering, arranging or providing a PRSA, a regulated entity must provide the consumer with the information set out in the appendix to the code.  The declaration set out in the code  must also be completed.


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