Financial Markets Authority AFA Update: Issue # 7

AFA Interim Monitoring Report

FMA has released an interim report providing feedback on AFA monitoring visits to 34 advisers over five locations in the nine months September 2011 to June 2012.

You are strongly encouraged to read the report and consider whether the observations made might also apply to your own client advice processes. If so, you should make the necessary improvements.

The report is available on our website here.

Overdue annual ABS confirmations

Advisers with overdue annual ABS confirmations should now have received a letter from us asking for confirmation within 10 working days.

Annual ABS confirmations are a Standard Condition of authorisation. Failing to comply with terms and conditions of authorisation is an offence under section 126 of the Financial Advisers Act with a fine of up to $5000 payable on summary conviction and may result in cancellation or suspension of authorisation.

Every AFA must confirm their ABS is up to date on the anniversary of their authorisation. AFAs must take personal responsibility for submitting their confirmations - this cannot be delegated to a compliance officer or your employer.

For confirmation instructions see our web page.

Annual registration renewal

Another obligation for all AFAs is the need to annually renew your registration on the Financial Service Providers Register.

Under the Financial Advisers Act, authorisation terminates when a person ceases to be registered. The authorisation of two AFAs has already been terminated because of this situation.
We urge advisers to diarise this important date, and to attend to their annual confirmation on the FSPR. This will avoid termination and having to re-apply to FMA for authorisation.

Please take a moment to review all your AFA obligations.

Other recent news and website updates

  • FMA is currently consulting on a guidance note about KiwiSaver sales and distribution. It gives guidance on the Financial Market Authority's expectations for the sale of KiwiSaver schemes within the requirements and spirit of the Financial Advisers Act. Submissions close on Monday 16 July 2012. See the guidance note.
  • FMA finalised its effective disclosure guidance note earlier this month. See the final guidance note.
  • The auditor regulatory regime comes fully into effect on 1 July 2012. This affects auditors of issuers. Read more here.


AFA Update emails - alerting you to your obligations


This periodic email provides information, guidance and feedback to help you meet your obligations as an AFA. It is not intended to be an exhaustive list of all AFA obligations on the topics discussed. Please see our website for further resources and information available for AFAs.