QFEs

Becoming a QFE

As part of the QFE application process a prospective QFE should submit an Adviser Business Statement (ABS) to the FMA.

We will review the document and check it includes the expected information. We need to be satisfied that the prospective QFE has the capacity to, and will:

  • discharge its ongoing compliance obligations under the Financial Adviser Act 2008
  • comply with QFE obligations including its terms and conditions
  • maintain procedures to ensure adequate consumer protection for retail clients.

See section 66 of the Act.

In considering the ABS we may:

  • request further information
  • conduct interviews with senior management, e.g., the director of the financial adviser force or compliance assurance
  • make on-site visits.

FMA will send written confirmation of its decision when the review of the ABS and other enquiries are complete.

This flowchart from the Financial Service Providers Register website shows how registration and grant of QFE status fit together.

QFE application resources

Find out here about preparing your QFE Adviser Business Statement, how to submit it and the period of a QFE status.

QFE Adviser Business Statement

An entity applying for QFE status must prepare an Adviser Business Statement (ABS). The ABS consists of two parts:

  • Part 1 describes its financial adviser services business
  • Part 2 explains the governance and compliance arrangements that have been put in place to ensure that the entity can take responsibility for the professional conduct and competence of all of its advisers in all of their adviser services. It must explain how consumer protection is addressed.

The ABS needs be approved by the relevant governing body - usually the board of directors. Maintaining an up to date ABS will be part of the terms and conditions of QFE status, if granted.

Entities that wish to be partner entities in a QFE should prepare one joint ABS document to demonstrate that they jointly have capacity.

How to write an ABS

An Adviser Business Statement (ABS) allows FMA to assess an entity's capacity to ensure compliance by its financial advisers and maintain procedures for adequate consumer protection. It is:

  • A key document in an application to be a QFE. The QFE ABS Guide will also help potential applicants decide whether they want their business to become a QFE.
  • Maintained by a QFE on an ongoing basis, and forms part of a QFE's Annual Report to FMA. It allows FMA to tailor its ongoing monitoring of the QFE.

This Guide tells you how to go about preparing an ABS.

The current version (September 2010) has introductory comments that refer to dates that have now passed. However the content required in your ABS remains the same.

You can also read a summary of feedback that was prepared following the 2010/2011 QFE applications.

How submit your QFE ABS

Email your ABS to qfemonitoring@fma.govt.nz and send a hard copy to our address.

Your QFE ABS remains confidential

Your statement is for your internal use and for the FMA. You do not need to make it public unless you choose to. FMA will respect the confidential nature of information in an ABS or any other reports submitted to us.

Information held by FMA is subject to the Official Information Act 1982 and the Privacy Act 1993. These Acts provide for proper access to information held by public organisations and also protect information to the extent consistent with the public interest and preservation of personal privacy. Any request for information held by FMA would be considered in accordance with the requirements of these Acts.

There are grounds likely to provide good reason to withhold sensitive information submitted in an ABS, such as where its release would disclose a trade secret, prejudice the commercial position of the financial adviser business, or breach an obligation of confidence where release of the information would be likely to prejudice future supply of similar information, or information from the same source.

Applicants should tell us if they consider the information provided in an ABS is confidential

Period of QFE Status

When QFE status is granted, the Financial Markets Authority notifies a QFE of its period of QFE status. Typically this would be between three and five years. Find out how the period is determined.

Variation of period of QFE status

FMA may vary the period of QFE status before renewal, on application by the QFE or on the following grounds:

  • the business of the QFE has changed in such as way that there is a material risk to consumers and/or
  • the QFE has been or is involved in market practices that are in material respects inconsistent with the purpose of the Financial Adviser Act 2008.

Renewing your QFE status

The status of existing Qualifying Financial Entities (QFEs) and QFE Groups will soon be due for renewal. Under section 75C of the FA Act, existing QFEs and QFE Groups can renew their status for a five year term.

If you have applied but we have not determined the application before the close of the 60th day after the expiry date, your QFE status will remain in place until we make a decision on your application. If you have not applied for renewal before the close of the 60th day after your expiry date, your QFE status will automatically lapse.

Please note that if you choose not to renew your QFE status, you and your QFE advisers must stop offering financial advice permitted under your QFE status when that status expires.

The QFE Renewal Guide is available for download from the related documents section below.

Related documents

Related documents