Note for Australian Licensees on Financial Advisers (Australian Licensees) exemption notice

July 2011

Introduction

This information is for Australian regulated financial advisers who are seeking to rely on, or who are already operating under the Financial Advisers (Australian Licensees) Exemption Notice 2011 ("Exemption Notice").

Process for applying

Clause 6(d) of the Exemption Notice sets out the process for applying. The table below provides our comments on complying with the requirements.

 

Requirements

FMA comments

1. Written notice that the Australian licensee wishes to rely on this exemption.
  1. There is no set form for the written notice and the notice may be given by post and/or submitted electronically.
  2. The notice should:
    1. refer to the exemption notice
    2. give the name and address of the Australian licensee and the licence number (this may be made available to the public)
    3. be from a person who is authorised to give the notice
    4. provide details of the person at the Australian licensee who is authorised to deal with FMA's enquiries
  3. The notice may have attached a copy of the licence (although this is not mandatory)
2. The names of, and contact information in respect of each of its specified representatives
  1. FMA may make this information publicly available
  2. If the specified representative is also an authorised representative on ASIC's register, the representative number should also be provided.
3. Copy of the New Zealand retail client list The list should include the retail clients who are existing clients of the Australian licensee and who will be treated as clients within the definition of Australian personalised services for a retail client. If a retail client of the Australian licensee is excluded from the list, then this client will not be within paragraph(a)(i)(A) of the definition of Australian personalised services for a retail client.

Additional information on the conditions

The following information is intended as a guide to some of the conditions in the Exemption Notice. It sets out the factors FMA will consider in assessing compliance with the conditions. This information does not constitute legal advice. We encourage you to seek your own legal advice on how to comply with the conditions in the Exemption Notice. Examples given are for illustrative purposes only, are not exhaustive and are not intended to impose or imply particular rules or requirements.

1. What is meant by conduct that is intended to induce or solicit retail clients in New Zealand?

This wording is used in two places in the Exemption Notice:

  • it is considered when a New Zealand client becomes a client (the client must not have become a client as a result of conduct that was intended to induce or solicit retail clients in New Zealand, or conduct likely to have that effect)
  • it is a condition at clause 6(l) that the Australian licensee or its specified representatives must not engage in such conduct.

In determining whether or not a person is engaging in conduct that is intended to induce or solicit retail clients in New Zealand, FMA will look at all the circumstances relating to the conduct.

However, in general we will consider whether any measures have been taken to attract New Zealand clients as distinct from general promotional activities undertaken by the Australian licensee outside of New Zealand in respect of its general market outside of New Zealand.

The following activities are examples of conduct that we consider is likely to be conduct intended to solicit retail clients in New Zealand:

  • Active marketing of the Australian licensee's financial adviser services in New Zealand, including in New Zealand newspapers or local television.
  • Advertisements on the Australian licensees' website which contain information specifically relevant to New Zealand persons or in relation to New Zealand financial products.

2. Complying with the written disclosure requirement at clause 6(f)

The condition at clause 6(f) of the Exemption Notice requires the Australian licensee to provide written disclosure containing prominent statements as set out in the clause. The following matters are relevant to this condition:

  • FMA will not pre-vet or approve the written disclosures which may be provided by Australian licensees to their New Zealand clients pursuant to the Exemption Notice, however we may ask to see the form and method of disclosure at any point.
  • The disclosure required under clause 6(f) should be given before the personalised services are provided to the retail client in New Zealand. If it is not practicable before such services are provided, then they may be provided as soon as practicable after however it is envisaged that in most circumstances and particularly for new clients, it should be practicable to give the notice before the services are provided.
  • Details of the New Zealand dispute resolution scheme should include the name of the scheme and website details.

Who to contact

If you have questions in relation to the Exemption Notice please contact your legal adviser or contact FMA.