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We need to talk about KiwiSaver fees
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Liam Mason, Director of Regulation
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We’ve made it clear to providers we expect them to be able to discuss their fees with their investors – clearly and simply. We also encourage investors to start that discussion, and we provide them with information and the tools to do it.
Two examples of our work in this area have come out this month. We’ve worked with MBIE to require providers to disclose the dollar cost of fees on KiwiSaver Annual Statements, and we’re encouraging providers also to disclose percentage fees, to help comparisons. And we’ve partnered with KiwiWealth using behavioural insights techniques to help their Default members make an active choice about the fund they’re invested in.
Clear, comparable, high quality information is the foundation of good investment decisions. Getting the best out of KiwiSaver is incredibly important to so many New Zealanders. We’ll continue to look for ways we can work with providers, and share information to help investors know what they need to know.
Liam Mason
Director of Regulation, FMA
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Changing a director or senior manager? You need to tell us.
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As part of your licence conditions, you must tell us when you appoint a new director or senior manager. To notify us, please complete the simplified notification form on our website. Once completed, please sign, scan and email it to us at compliance@fma.govt.nz.
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Reminders
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16 June 2017
Consultation: Proposed guidance on substantial product holder disclosures - submissions close on Friday 16 June. Read more ›
23 June 2017
Consultation: Follow up to KiwiSaver annual statements - calculation of total fees in dollars - submissions close on Friday 23 June. Read more ›
30 June 2017
Consultation: Improving financial information in an equity PDS - Submissions close on Friday 30 June. Read more ›
3 July - 31 August 2017
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Annual AML/CFT reports - reporting entities supervised by us are required to submit their annual AML/CFT report on their risk assessment and compliance programme through our online system between 3 July and 31 August 2017. Read more ›
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Crowdfunding and peer-to-peer lending providers annual regulatory return – licensees are required to submit their annual regulatory return between 3 July and 31 August 2017. Read more ›
14 August - 30 September 2017
AFA Information return - early notification for AFAs to start preparing for their annual information return. Submissions open on Monday 14 August and are open until 30 September 2017. Read more ›
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Simple ways you can help your customers
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Last week we released the results of a behavioural insights trial we ran with Kiwi Wealth. The trial showed that simple changes to written communications, such as appealing to a desire to be like other New Zealanders, can improve the likelihood of people making an active fund choice. We would like to see all KiwiSaver and managed fund providers making similar simple and effective changes to help investors make better decisions.
Contact us if you’re interested in running your own trial or to explore these results further. We would welcome the opportunity to work with you.
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Updated designation notice
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In May, a class designation came into effect which designates certain newly issued shares in investment companies as managed investment products (MIPs). The designation does not apply if the shares are quoted on the main board of the NZX.
We amended the designation so that it does not apply to shares quoted on the ASX as well. This amendment came into effect on 9 June 2017.
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FMA levy changes
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Last year the Government approved an increase in the FMA’s funding to reflect the significant increase of regulatory responsibilities the FMA must now undertake. The FMA receives funding from the Crown and a proportion of these costs are then recouped from industry through levies.
Changes to the levies are expected to take effect from 1 July 2017 and introduce new categories of levies and increase the amount payable for many levy payers. To see the new levies, please visit MBIE's website.
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What’s coming up?
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Look out for the following consultation, publications and guidance coming out soon.
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Consultation
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Strong support was received on our recent consultation for the proposed exemption from the obligation to prepare scheme financial statements for bundled unit trusts. We are now working to finalise our policy position. If the exemption is granted, managers will still have to prepare financial statements for each of the funds within the notional registered scheme.
Upcoming consultation we’ll be releasing soon:
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Robo-advice: We will be consulting on possible exemption relief to facilitate personalised robo-advice services under the Financial Advisers Act. Current regulation hinders the development of digital advice models. Proposed reforms to financial adviser laws will address this, but there is benefit to consumers to bridge an advice gap, by enabling personalised robo-advice to be offered sooner than proposed law reforms.
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Market index: We will be consulting on potential exemption relief for MIS managers. The proposed exemption is for managers who cannot provide an ‘appropriate market index’ for managed funds, where these funds have significant direct or underlying investment into alternative asset classes. Any relief would be on the basis of alternative requirements, such as a peer group index.
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Content of regulatory returns for DIMS, MIS and DI licensees. As part of the licence conditions, we will be consulting on the questions we propose asking in annual regulatory returns. The consultation will also include an updated proposal for the annual compliance declaration for all FMC Act licensees.
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Upcoming publications
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The following publications will be released before the end of June.
ICE Futures reports – Before 30 June, we will publish our first ICE Futures U.S. Inc. (IFUS) and ICE Futures Europe (IFEU) reports. We are required to report at least once every two years on how well IFUS and IFEU met their licensed market operator obligations and whether the Commodity Futures Trading Commission and Financial Conduct Authority were satisfied they complied with their obligations during the review period (1 December 2014 to 31 December 2016).
Auditor regulation and oversight report – Our three-year auditor plan that sets out our intentions and expectations to auditors.
NZX general obligations review report – This report outlines our annual review of how well NZX is meeting its statutory obligations, and covers the 2016 calendar year.
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Join our team
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Join a vibrant and dynamic team that embraces work-life balance, a commitment to employee well-being, and opportunities for learning and development. Check our website to find out more.
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