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Focus on Financial Advice regime change

John Botica, Director of Market Engagement, FMA


We were delighted to present at the Financial Services Council’s Navigating Regulation Advice Summits around the country over the past two weeks, to an incredibly large number of attendees. It was great to see so many people engaging with the upcoming changes for the financial advice industry.


The new draft Code of Conduct is currently with the Minister for approval and we expect Parliament to pass the Bill very soon. Changes will be happening, so now’s the time to start getting prepared.


Right now, you have approximately six months to prepare for transitional licensing. Following that, you have approximately six months to apply for your transitional licence, and then two years' transition period to apply for your full licence.

If you’re currently an authorised or registered financial adviser, you have just over 12 months to decide whether to apply for your own financial advice provider’s licence or operate under someone else’s licence.


We are here to help. In this month’s newsletter, we’ve included a decision tree diagram to show you some of the different ways you can operate in the new regime. You can also find out your obligations as a licensed financial advice provider.


Over the next few months, we will continue sending out regular updates to help you prepare for licensing, including a guide on how to apply.


If you have any questions about the changes, come and talk to us.

John Botica


Choosing your pathway in the new financial advice regime


The new regime provides you with flexibility to structure your business in a way that makes most sense for you. To help you work through your options, we’ve developed an infographic showing you some of the different ways you can operate under the new regime.



The FSC’s Navigating Regulation Advice Summits


During the last two weeks, we presented at the Financial Services Council’s (FSC) summits in Wellington, Auckland, Dunedin and Christchurch. These events gave industry a great opportunity to come together, get an update on the planned changes and answers to questions they have about the new regime.


The FSC recorded the Auckland event, so if you were unable to attend, go to their Navigating Regulation Advice Hub to see a video of the full session or their YouTube channel to see each session individually.




Your obligations as a licensed financial advice provider


Last month we explained who needs a licence to provide financial advice under the new regime. Our latest information sheet helps you consider your options by explaining your obligations as a financial advice provider.


ASX 24 derivatives market review

The FMA has published the findings of its obligations review of the ASX 24 derivatives market. The review did not identify any significant issues, and the FMA is generally satisfied that ASX is meeting the conditions of its market operator licence. The FMA is required to report at least once every two years on how well ASX 24 is meeting its licensed market operator obligations. This is our second review of ASX 24.


Using behavioural insights to improve KiwiSaver outcomes

The results of a second FMA, MBIE and industry trial demonstrates using communications based on behavioural insights encourages KiwiSaver members to make an active choice about their investment.  Behavioural insights are techniques that recognise what drives consumers’ decision-making processes. The trial, run with ANZ, demonstrated for a second time that making changes to communications can change behaviour and can provide a low-cost opportunity for providers to make a significant difference to their members’ outcomes.


Smart Investor proving popular

In the first two weeks of launch, over 22,000 people visited Smart Investor, spending an average of 4.11 minutes on the tool. Improving product short descriptions and updating document titles are two ways issuers can help the increasing numbers of users on the tool. 



Financial Benchmark Regulation


The Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Bill has recently been referred to a Parliamentary select committee.  Public submissions are now being invited and the closing date for submissions is 4 April.


Part 2 of this Bill establishes a new opt-in licensing regime for administrators of financial benchmarks under Part 6 of the FMC Act. This is a response to the EU Benchmarks Regulations.  Once enacted it will enable important New Zealand benchmarks to continue to be referenced in financial instruments with international counterparties in any new contracts entered into from 1 January 2022.


Once enacted, we will be responsible for considering licence applications, and supervising and enforcing licence obligations; the detailed licensing requirements will be set out in regulations. These requirements will reflect what is required by the EU Benchmarks Regulations and the IOSCO Principles for Financial Benchmarks in order for New Zealand’s regulatory regime to achieve formal “equivalence” status under the EU Benchmarks Regulations.



Expiry dates on all Financial Markets Conduct Act licences to be removed


The Financial Markets Authority (FMA) is to remove the expiry dates for all licences issued under the Financial Markets Conduct Act 2013 in a process expected to be complete by the middle of 2019.

Open-ended terms will apply to all new and existing licences, unless an expiry date is specified on a case-by-case basis. Current licence holders will not have to apply to be relicensed before the expiry date of their licence. A notice of variation has been sent to all holders of existing licences.



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FMA news

5 March 2019Appeal court judgment in ANZ Bank New Zealand v Financial Markets Authority


1 March 2019 ASX 24 derivatives market review


27 February 2019The ingredients for successful KiwiSaver communications


25 February 2019South & Provan jailed for 4 years and 6 months on Crimes Act charges


20 February 2019Smart Investor tool launched to help Kiwis get ahead financially




Industry insights

Keynote address by ASIC Commissioner Sean Hughes

The Financial Services Royal Commission and other emerging issues relating to the general insurance industry from an ASIC perspective


Survey and qualitative research

FCA reveals findings from first cryptoassets consumer research


32nd World Traders' Tacitus Lecture

The Financial Sector: Redefining a Broader Sense of Purpose


We offer our deepest condolences to all those affected by the tragic events in Christchurch last Friday. If any of our licensed population has been affected, we urge you to get in touch.



Financial Markets Authority
Level 5, Ernst & Young Building
2 Takutai Square
Auckland 1143

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