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Financial Markets Conduct Act

Heartland does not offer investments or securities to the public. Investment opportunities are only available to certain persons who are wholesale investors (as defined in the Financial Markets Conduct Act) or otherwise exempt from the disclosure requirements set out in the Financial Markets Conduct Act 2013 by way of an exemption contained in schedule 1 of that Act.

Extracts from selected sections of schedule 1 of the Financial Markets Conduct Act 2013 (“the Act”) are provided below. Heartland provides no warranty as to the correctness of these sections and those seeking to register as an investor should seek independent professional advice.

 

Clause 3, Schedule 1 - Offer to wholesale investor

          (1)    An offer of financial products to a wholesale investor does not require disclosure under Part 3 of this Act.

          (2)    A person is a wholesale investor if—

                (a)     the person is an investment business (see clause 37); or

                (b)     the person meets the investment activity criteria specified in clause 38; or

                (c)     the person is large (see clause 39); or

                (d)     the person is a government agency (see clause 40).

          (3)    A person is also a wholesale investor, in relation to an offer of financial products, if—

                (a)     the person is an eligible investor (see clause 41); or

                (b)     in relation to an offer of financial products for issue or sale,—

                         (i)   the minimum amount payable by the person on acceptance of the offer is at least $750,000; or

(ii)  the amount payable by the person on acceptance of the offer plus the amounts previously paid by the person for financial products of the issuer of the same class that are held by the person add up to at least $750,000; or

(iii) it is proposed that the person will acquire the financial products under a bona fide underwriting or sub-underwriting agreement; or

(c) in relation to an offer of a derivative for issue or sale, the notional value of the derivative is at least $5 million (see clause 49).

(4)    In calculating the amount payable, or paid, for financial products for the purposes of subclause (3)(b)(i) or (ii), any amount payable, or paid, must be disregarded to the extent to which it is to be paid, or was paid, out of money lent by the offeror or any associated person of the offeror.

 

Clause 4, Schedule 1 - Offers to close business associates

(1)    An offer of financial products to a close business associate of the offeror does not require disclosure under Part 3 of this Act.

(2)    A person (A) is a close business associate of the offeror if—

         (a)     A is a director or senior manager of the offeror or of a related body corporate of the offeror; or

         (b)     A holds or controls 5% or more of the voting products of the offeror; or

         (c)     A is a related body corporate of the offeror; or

         (d)     A holds or controls 20% or more of the voting products of a related body corporate of the offeror; or

         (e)     A is a partner of the offeror or of a director of the offeror (under the Partnership Act 1908); or

(f)      A is a spouse, civil union partner, or de facto partner of a person who is a close business associate of the offeror under any of paragraphs (a) to (e) or subclause (3); or

(g)     A is a child, parent, brother, or sister of a person who is a close business associate of the offeror under any of paragraphs (a) to (f) or subclause (3) (whether or not by a step relationship).

(3)    A person (A) is also a close business associate of the offeror, in relation to an offer of financial products, if A has a close professional or business relationship with the offeror, or a director or senior manager of the offeror, that allows A to—

         (a)     assess the merits of the offer; or

(b)     obtain information from the offeror or any other person involved in the offer that will enable A to assess the merits of the offer.

(4)    In this clause, control, in relation to a voting product, means having, directly or indirectly, effective control of the voting rights attached to the product.

 

Clause 5, Schedule 1 - Offers to relatives

         (1)    An offer of financial products to a relative of the offeror or of a director of the offeror does not require disclosure under Part 3 of this Act.

         (2)    In this clause, relative, in relation to a person (A), means any of the following:

                   (a)     A’s spouse, civil union partner, or de facto partner (B):

(b)     a grandparent, parent, child, grandchild, brother, sister, nephew, niece, uncle, aunt, or first cousin of A or B, whether or not by a step relationship:

                   (c)     a spouse, civil union partner, or de facto partner of a person who is a relative under paragraph (b):

                   (d)     a trustee of a trust under which A, or a relative of A (under paragraphs (a) to (c)), is a beneficiary who:

                             (i)   is presently entitled to a share of the trust estate or of the income of the trust estate; or

                             (ii) is, individually or together with other beneficiaries, in a position to control the trustee:

                  (e)     a trustee of a trust if—

                            (i)   the trust is a family trust within the meaning of section 173M(5) of the Tax Administration Act 1994; and

  (ii) a majority of the individuals who are beneficiaries under the trust are relatives of A (under paragraphs (a) to (c)).

 

Clause 37, Schedule 1 - Investment businesses

          (1)     A person is an investment business if the person is—

                  (a)    an entity whose principal business consists of 1 or more of the following:

                         (i)   investing in financial products; or

                         (ii) acting as an underwriter; or

(iii)       providing a financial adviser service (within the meaning of section 9 of the Financial Advisers Act 2008) in relation to financial products; or

(iv) providing a broking service (within the meaning of section 77B of the Financial Advisers Act 2008) in relation to financial products; or

                         (v) trading in financial products on behalf of other persons; or

                   (b)    a registered bank; or

                   (c)     an NBDT; or

                   (d)    a licensed insurer (within the meaning of section 6(1) of the Insurance (Prudential Supervision) Act 2010); or

(e)    a manager of a registered scheme, or a discretionary investment management service, that holds a market services licence; or

                    (f)     a derivatives issuer that holds a market services licence; or

                    (g)    a QFE or an authorised financial adviser.

(2)     Subclause (1)(a) does not apply to an entity if the entity was established or acquired with a view to using it as an entity to which offers of financial products may be made in reliance upon the exclusion in clause 3.

          (3)     Subclause (2) does not limit clause 9.

 

Clause 38, Schedule 1 - Investment activity criteria

(1)     A person (A) meets the investment activity criteria for the purposes of clause 3(2)(b) or 36(b)(ii) if at least 1 of the following paragraphs applies:

(a)    A owns, or at any time during the 2-year period before the relevant time has owned, a portfolio of specified financial products of a value of at least $1 million (in aggregate):

(b)    A has, during the 2-year period before the relevant time, carried out 1 or more transactions to acquire specified financial products where the amount payable under those transactions (in aggregate) is at least $1 million and the other parties to the transactions are not associated persons of A:

(c)     A is an individual who has, within the last 10 years before the relevant time, been employed or engaged in an investment business and has, for at least 2 years during that 10-year period, participated to a material extent in the investment decisions made by the investment business.

         (2)     For the purposes of—

(a)    subclause (1)(a), in determining the specified financial products owned by A, the specified financial products owned by an entity controlled by A may be treated as being owned by A:

(b)    subclause (1)(b), in determining the transactions carried out by A, transactions carried out by an entity controlled by A may be treated as carried out by A:

c)     applying subclause (1)(a) and (b) in relation to derivatives, the value of a derivative or the amount payable under a transaction to acquire a derivative must be treated as being the notional value of the derivative divided by 10 (see clause 49).

(3)     The frameworks and methodologies prescribed by the FMA under subpart 4 of Part 9 of this Act for the purposes of this clause (if any) must be complied with when determining whether any of the paragraphs of subclause (1) are satisfied.

          (4)     In this clause, specified financial products, in relation to A, means financial products other than—

                    (a)    category 2 products:

                    (b)    interests in a retirement scheme:

                    (c)     financial products issued by an associated person of A.

 

Clause 39, Schedule 1 - Meaning of large

         (1)     A person is large if at least 1 of the following paragraphs applies:

(a)    as at the last day of each of the 2 most recently completed financial years of the person before the relevant time, the net assets of the person and the entities controlled by the person exceeded $5 million:

(b)    in each of the 2 most recently completed financial years of the person before the relevant time, the total consolidated turnover of the person and the entities controlled by the person exceeded $5 million.

(2)     The frameworks and methodologies prescribed by the FMA under subpart 4 of Part 9 of this Act for the purposes of this clause (if any) must be complied with when determining whether either of the paragraphs of subclause (1) is satisfied.

 

Clause 40, Schedule 1 - Definition of government agency

A government agency is any of the following:

          (a)    a government department named in Schedule 1 of the State Sector Act 1988:

          (b)    a Crown entity under section 7 of the Crown Entities Act 2004:

          (c)     a local authority:

          (d)    a State enterprise (within the meaning of section 2 of the State-Owned Enterprises Act 1986):

          (e)    the Reserve Bank:

 (f)     the Board of Trustees of the National Provident Fund continued under the National Provident Fund Restructuring Act 1990 (and a company appointed under clause 3(1)(b) of Schedule 4 of that Act).