Financial Markets Conduct (Aotearoa Energy Limited) Exemption Notice 2025

The Financial Markets Conduct (Aotearoa Energy Limited) Exemption Notice 2025 exempts Aotearoa Energy Limited (AEL) from the requirement contained in section 310 of the Financial Markets Conduct Act 2013 (Act) that AEL holds a financial product market licence that covers the operation of an electronic trading platform in the wholesale electricity market, which is a financial product market under the Act (AEL Electricity Market). 

The key reasons for granting the exemption are:

• the information presented on the AEL Electricity Market is simple in its format, the type of product that can be traded on the AEL Electricity Market is limited to certain derivatives for which the underlying is the price of electricity in the New Zealand wholesale electricity market, and the conditions of the exemption ensure that all participants in the AEL Electricity Market are wholesale investors that are registered with the Electricity Authority as an industry participant under the Electricity Industry Act 2010.  Accordingly, the purposes of:
  • promoting informed participation of businesses, investors and consumers in the market; and
  • providing timely, accurate and understandable information to persons to assist those persons to make decisions relating to financial products or the provision of financial services,

can be substantially achieved without AEL being subject to licensing requirements with respect to the operation of the AEL Electricity Market:

• the exemption is subject to conditions that AEL must not hold client money or property or operate any clearing and settlement facility in connection with the operation of the AEL Electricity Market and must not trade on its own behalf, or on the behalf of others, on the AEL Electricity Market. As such, it is not necessary to impose requirements in relation to those matters to achieve the purpose of the Act relating to governance arrangements and the management of governance risks:
• given that the statutory purposes described above are substantially met without AEL being subject to licensing requirements, it is desirable to grant the exemption in order to promote the further statutory purpose of avoiding unnecessary compliance costs.

Furthermore, taking into consideration:

• the matters set out in section 308 of the Act regarding the nature of the activities conducted, the size of the market, the nature of the financial products dealt with, the participants, and the technology used; and
• the purpose set out in section 229 of the Act to encourage a diversity of financial product markets that take account of the differing needs and objectives of issuers and investors,

from a regulatory perspective, the needs and objectives of the particular investors in relation to the particular products appear to be largely met by the existing arrangements. 

The exemption is subject to conditions limiting the nature of participant, the capacity in which they are participating, and the range of products traded on the AEL Electricity Market. As such, the FMA considers the exemption is not broader than reasonably necessary to address the matters that gave rise to the exemption.

Download Financial Markets Conduct (Aotearoa Energy Limited) Exemption Notice 2025 [PDF 256KB]