Section Sch3-2 — Trusts Act 2019: Meaning of wholesale trust

2 Meaning of wholesale trust (1) A wholesale trust is an express trust (within the meaning of section 12 ) that has the following characteristics: (a) the trust is established in connection with or as a consequence of 1 or more of the following: (i) an offer of financial products exclusively to wholesale investors or persons who are controlled by, or who are otherwise associated persons of, those investors: (ii) the lending of money to, or the borrowing of money from, wholesale investors or persons who are controlled by, or who are otherwise associated persons of, those investors: (iii) the provision of a client money or property service exclusively to a wholesale client; and (b) every beneficiary is 1 or more of the following: (i) a wholesale investor (or person who is controlled by, or who is otherwise an associated person of a wholesale investor) or wholesale client: (ii) a manager or an investment manager of the trust (or an associated person of that person): (iii) an originator of any property of the trust (or an associated person of that beneficiary): (iv) a person who is controlled by, or who is otherwise an associated person of, an investment business, a large entity, or a government agency: (v) an overseas person who is, or who undertakes a role that is, substantially similar to a person under any of paragraphs (i) to (iv): (vi) the trustee of the trust: (vii) a residual beneficiary. (2) In this clause,— associated person has the meaning given to it in section 12 of the Financial Markets Conduct Act 2013 client money or property service has the same meaning as in section 6(1) of the Financial Markets Conduct Act 2013 controlled has the meaning given to it in clause 48 of Schedule 1 of the Financial Markets Conduct Act 2013 government agency has the meaning given to it in clause 40 of Schedule 1 of the Financial Markets Conduct Act 2013 investment business means an entity that is an investment business as defined in clause 37 of Schedule 1 of the Financial Markets Conduct Act 2013, and includes an equivalent overseas entity large has the meaning given to it in clause 39 of Schedule 1 of the Financial Markets Conduct Act 2013, except that the relevant time for the purpose of applying that schedule under this clause must be treated as the following: (a) in relation to an offer of financial products referred to in subclause (1)(a)(i), the time immediately before financial products are issued or transferred to the person under the offer: (b) in relation to the lending or borrowing of money referred to in subclause (1)(a)(ii), the time immediately before the money is first transferred to the recipient: (c) in relation to the provision of a client money or property service referred to in subclause (1)(a)(iii), the time immediately before the trustee receives the wholesale client’s money or property in the trustee’s capacity as a provider of the service to the wholesale client residual beneficiary means a beneficiary that is an entity that— (a) receives trust property only after any other claims on the trust property have been satisfied; and (b) at the time when the trust was created, operated for a charitable purpose or was otherwise for the benefit of the community wholesale client has the same meaning as in section 6(1) of the Financial Markets Conduct Act 2013 wholesale investor has the meaning given to it in clause 3 of Schedule 1 of the Financial Markets Conduct Act 2013, but,— (a) for the purposes of this definition, large in that clause has the meaning given to it in this subclause; and (b) also includes an overseas person with characteristics that are substantially similar to a New Zealand wholesale investor such that, if the overseas person was a New Zealand incorporated entity, the overseas person would be a wholesale investor under clause 3 of Schedule 1 of the Financial Markets Conduct Act 2013.