BN7.5 On-call investments

1. Where the principal applicant has committed to invest in managed funds (either as part of a Growth Category investment (see BN7.10.10), or as part of a Balanced Category investment (see BN7.10.1(a), BN7.10.30(j) and BN7.10.35(b)), but funds have not yet been called upon by the fund manager, the funds must be placed in on-call investments to start the investment period, subject to the following conditions:
   1. applicants must have entered into an agreement that is legally binding and meets requirements specified at BN7.10.10(a)(ii) and the committed funds are a fixed commitment; and
   2. the committed funds are managed by the applicant or on the applicant’s behalf by a bank, investment broker or financial adviser; and
   3. nominated funds must be placed into on-call investments which meet the specifications in BN7.5(c) below; and
   4. applicants must maintain a level of funds in any approved on-call investment equal to the committed amount minus any funds already paid to the managed fund.
2. Applicants must provide evidence that the on-call investments are fully compliant with any legislative and regulatory obligations, applicable codes of practice and licensing or registration requirements under New Zealand law, including any requirements imposed by the Financial Markets Authority.
3. For the purposes of these instructions, acceptable on-call investments are defined as an investment that:
   1. can be liquidated to meet the needs of the managed fund; and
   2. is invested in New Zealand in New Zealand dollars; and
   3. has been placed in:
      • listed equities (BN7.10.1); or
      • bonds (BN7.10.35).
4. Prior to being called upon, at any point during the on-call period for a maximum of six months altogether, committed funds may be deposited into a:
   1. New Zealand bank account (including cash accounts); and/or
   2. term deposit with a New Zealand registered bank.
5. Committed funds that are temporarily held in a New Zealand bank account or term deposit as per (d) above must meet ownership requirements (see BN6.1), unless they are held in a cash account in which case they may be held by a nominee (such as an investment company).
6. Funds invested in on-call investments must not be withdrawn except to:
   1. meet the capital call of the managed fund; or
   2. be transferred to other acceptable on-call investments; or
   3. pay any required costs associated with the on-call investment such as taxes or fees.
7. If the on-call investment value falls below the amount that has been committed to the managed fund (as a result of payment of costs associated with the on-call investment or the on-call investment making a capital loss), then the applicant may nominate further funds to account for this, provided the additional funds:
   1. meet ownership requirements (see BN6.1); and
   2. have been lawfully acquired (see BN6.5).

Effective 01/04/2025