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FMA Update - 21 May 2015

On 1 May the FMA turned 4, marking yet another eventful year in our short but busy history. Notably, we also raced past the first anniversary for Phase 1 of the FMC Act. The freshness of these milestones reflects that while change has been a long time coming, we are still a new regulator operating in an even newer regulatory regime.

Indeed key parts of the new reform process are still in progress. Various transition periods for new offer document requirements and licensing obligations for new sectors like derivatives issuers, DIMS and Managed Investment Schemes are gathering pace.

Having highlighted our strategic priorities in our Strategic Risk Outlook last December, we need to assess how best to apply our limited resources, both human and financial, to operate our new machinery. For instance, how do we get under the bonnet of newly licensed sectors in a way that is transparent but does not create opportunity for firms or individuals to game our points of focus?

Reflecting our need to ‘size’ the FMA and its resource needs against our core activities and processes, we are in the midst of an extensive business planning program. The goal is to ensure we can match those core activities to our strategic priorities, performance measures and very importantly, our budget.

As the mists begin to clear in terms of our overall remit, we will see changes to the areas of activity within the FMA and how we apply the resources we have.  In that respect, we are very fortunate to have a strong and committed team. We are acutely conscious our people make all the difference so we can fulfil our ambitions to be an engaged and effective regulator.

As always we have plenty going on that will directly impact you, our stakeholders, and much of this is highlighted in further detail below.

Rob Everett
CEO, FMA

What's new!

DIMS limit breaks under the FMC Act

Information Sheet outlining the obligations of DIMS providers under the FMC Act, relating to investment authority limits and reporting breaches of those limits.

Understanding the Regulation of DIMS

Updated version of the ‘Understanding the Regulation of DIMS’ document is now available.  Updates reflect the 1 December 2014 law change and incorporate the DIMS Guidance Note from June 2014. All information can now be found in one document.

Exemptions approved for small DIMS providers

Reduced reporting benefits will apply for small DIMS providers through two exemptions recently approved by the FMA.  Look out for these exemptions on our website soon.

AFAs updated Standard Conditions come into effect 1 June

Next month, AFAs who are authorised to provide personalised DIMS will need to comply with updated standard conditions that include an additional condition only applicable for AFAs authorised to provide DIMS. 

Lawyers offering contributory mortgages

New requirements for lawyers offering contributory mortgages are outlined  in a recently published Information Sheet.

Consumer

Investors considering putting their money into capital bank notes are encouraged to read our Bank Capital Notes Guide and seek financial advice from an AFA.  Simone Robbers, Director of Primary Markets and Investor Resources said “These types of products are not like a bank term deposit. We want to ensure consumers are not just basing their investment decisions on an advertised high interest rate and the fact that a household name is offering them.”

Reminders 

31 May – DIMS
Deadline for DIMS licensing and updating FAS scope for AFAs.  See our calendar for more details.

29 June - AML/CFT Independent Audit
For businesses that are reporting entities for Anti-Money Laundering and Countering Financing of Terrorism your first audit must be completed by this date, where your financial activities were captured by the Act as at 30 June 2013. Check our website for more information.

1 July - 31 August - Annual AML/CFT Reports
Reporting entities supervised by the FMA are required to submit their annual AML/CFT report on their risk assessment and compliance programme through our online system between 1 July 2015 and 31 August 2015. Check our website for more information.

Forthcoming events

Financial Advisers Act Review – national workshops - June and July

Together with MBIE we are hosting workshops in Auckland, Wellington and Christchurch to discuss the key issues identified for the FA and FSP (Registration and Dispute Resolution) Acts review. All financial advisers are welcome but spaces are limited so check our website for more information and to register your interest.

Coming soon

Look out for the following publications we’ll be releasing over the coming month.

  • FMA's Statement of Intent – 2015 - 2019
  • NZX General Obligations Review

FMA news 

Summary of recent FMA media releases and/or speeches.

19 May - FMA removes offshore firms from the Financial Services Provider Register – warnings issued against companies who fail to respond

5 MaySmall DIMS providers benefit from reduced reporting requirements – look out for the exemptions on our website soon

30 April – SPI Directors fined for breaching financial reporting rules

23 April New findings provide first market snapshot of NZ financial advisers

16 April - FMA completes MOU with NZ Dispute Resolutions Schemes

Industry news

19 May - FMA looking into directors, agents who help foreign firms cash in NZ's reputation

19 May - Ministry needs to better understand disputes schemes: FSCL

14 May - Local banks shy away from compulsory adviser ethics training

8 May - Warning over near-bankrupt forex firm

Work for us

Do you want to join a vibrant and dynamic team that embraces work-life balance, a commitment to employee well-being, and opportunities for learning and development?  We have a range of roles available so please check our website to find out more.