- The new regime is proposed to take effect from May 2019.
- Chartered Accountants ANZ will make a submission on the Bill.
- Members are encouraged to provide feedback on the Bill and draft regulations.
The Financial Services Legislation Amendment Bill gives effect to the new regulatory and licensing regime for financial advice in New Zealand, and is currently before the Select Committee.
A new Code of Conduct is expected to be approved by August 2018.
The new regime is proposed to take effect from May 2019, with transitional arrangements for licences fully operational by May 2021.
Chartered Accountants ANZ is consulting with members and other key stakeholders and will make a submission.
Members are encouraged to provide feedback on the Bill and draft regulations.
What is the purpose of the Bill?
The purpose of the Bill is to ensure that financial services are provided in a way that promotes the confident and informed participation of businesses, investors, and consumers.
The Bill aims to ensure that the conduct and client-care obligations of financial service providers and the regulation of financial markets remain fit for purpose, and also addresses misuse of the financial service providers register by off-shore entities.
Why are the reforms required?
The new regulatory regime proposes to address a number of problems with the existing regime for financial advice in New Zealand which are hindering investor confidence, participation in financial markets, and informed decision making, in a way that will:
- ensure consumers can access the financial advice they need
- improve the quality of financial advice
- not impose any undue compliance costs, complexity, or barriers to innovation, and
- ensure access to redress.
Key elements of the Bill
The key elements of the Bill introduce a number of changes. Major changes include:
- Enabling increased access to financial advice by allowing more types of financial advice to be provided to consumers, such as robo-advice.
- Making it easier for those giving advice to tailor the advice to the client, by removing the existing distinction between types of financial advice services.
- Introducing an industry-wide duty to give priority to clients’ interests. This obligation presently only applies to authorised financial advisers covered by the professional code.
- Requiring that the code of conduct apply to all retail financial advisers and include minimum standards of competence, knowledge, skill, ethical behaviour, and client care.
- Extending retail protections by reducing the number of individuals who will be classified as wholesale, by aligning the definition of ‘wholesale client’ with the narrower definition of ‘wholesale investor’ in the Financial Markets Conduct Act.
- Requiring all retail financial advisers to be licensed, including the introduction of ‘firm licensing’ to reduce complexity and compliance costs.
Financial Services Legislation Amendment Bill
Proposed new regulatory and licensing regime for financial adviceRead bill