Government moves to tighten wholesale investment rules as Chapman Tripp warns against overreach
The New Zealand government is looking to tighten rules covering wholesale investment offers, amid concern the current settings are too permissive. A Ministry of Business, Innovation and Employment discussion document sets out proposed reforms that have drawn a detailed response from law firm Chapman Tripp, whose report flags the potential for significant industry pushback, particularly on the promotion of wholesale offers. RNZ
Chapman Tripp partner Penny Sheerin said wholesale investment offers were not suitable for inexperienced investors. She identified a current risk: wholesale offers include unsuitable investors who are really retail investors and may inappropriately certify themselves as eligible investors to participate in an attractive but unsuitable offer. The firm's report warned the proposed regulations could go too far, pointing to the licensing of wholesale offerors as an example. Chapman Tripp said it would not support licensing wholesale offerors, citing the global portability of capital and the risk that New Zealand investors may invest offshore. The report also said some of the proposed reforms could add unnecessary compliance costs.
The wholesale investment space is already under active regulatory scrutiny. According to the Chapman Tripp report, the Financial Markets Authority has pursued regulatory proceedings and enforcement actions, maintained an ongoing focus on wholesale issuer conduct, completed a thematic review in late 2022, and been party to a High Court judgement concerning eligible investor certificates in late 2025. RNZ
The FMA published its thematic review of the use of the wholesale investor exclusion in October 2022, setting out findings from its review of wholesale offers of financial products alongside guidance for offerors. That guidance states offerors should ensure all advertising of a wholesale investment offer clearly states that it is open to wholesale investors only. FMA
The eligible investor certificate regime has been a particular enforcement focus. The FMA sought clarity from the High Court on the use of eligible investor certificates, following investigations into their use by various wholesale property developers. A High Court decision in September 2025 affirmed that eligible investor certificates could generally be relied on, unless there was reason for further investigation. The FMA welcomed the ruling, saying it boosts confidence in New Zealand financial markets. FMA
FMA guidance defines a wholesale investor as requiring a $750,000 minimum investment, with the offeror required to take all reasonable steps to confirm eligibility. FMA
The FMA's Financial Conduct Report, published in June 2026, sets out the regulator's priorities for the 2026/27 financial year, covering specific sectors and cross-cutting issues. Wholesale conduct remains within that broader regulatory perimeter. FMA
The broader context here is a regulatory system trying to close the gap between the legal threshold for wholesale participation and the practical reality that some investors self-certify into offers they do not have the sophistication to assess. The September 2025 High Court decision gave offerors a degree of comfort that certificates can be relied on without exhaustive due diligence in every case, but it did not resolve the underlying policy question of whether the self-certification pathway is fit for purpose. MBIE's discussion document appears aimed at that gap.
Chapman Tripp's response signals where industry lines are likely to be drawn. The firm accepts the core problem, that unsuitable retail investors are entering wholesale offers, but draws a clear boundary at measures that would impose licensing or add compliance costs the market views as unjustified. The argument about capital mobility is straightforward: if New Zealand's wholesale regime becomes materially more onerous than comparable jurisdictions, issuers and investors can route offers through offshore structures, leaving local investors with the same exposure but less regulatory visibility.
What remains unresolved is where the government lands between the FMA's enforcement-driven approach and any new legislative or regulatory tools MBIE may propose. The discussion document stage means no policy decisions have been made; the reforms are proposals open to consultation. Industry submissions, including Chapman Tripp's, will shape what reaches Cabinet. The tension between investor protection and capital market efficiency is not new in this jurisdiction, but the wholesale channel's growth has sharpened it.
