FMA Update - 25 February 2015

Consultation Paper - Proposed additional standard conditions for Authorised Financial Advisers - closes Friday 27 February

In November 2014 we consulted on additional standard conditions for Authorised Financial Advisers (AFAs) providing personalised DIMS.

Following feedback received we have further amended the proposed conditions, which require further consultation.

The main amendment is the removal of the mandatory audit requirement of the net tangible assets calculation for all AFA’s providing personalised DIMS.  The new proposed additional standard condition will only require AFAs providing personalised DIMS to have their net tangible asset calculations audited upon request of the FMA.

See the consultation paper here.

Submissions close 5pm, Friday 27 February 2015.

Governance information sheets

The FMA has released 4 new information sheets summarising key accountabilities and responsibilities, under the FMC Act, for the following areas:

Soon we will also be publishing a information sheet about Issuers’ Registers of Regulated Products and the FMA’s Discretion under Section 224 so please check our website in the coming week. This information sheet outlines the requirements relating to issuers’ registers of regulated products under Subpart 4 of Part 4 of the FMC Act.

Non-filing of financial statements

In July 2014 the FMA published a report on its review of non-filing of financial statements from a sample of 416 limited liability companies that issued securities to the public with 31 March 2013 balance dates.

That report found 73 per cent of entities filed their financial statements before the statutory due date, whilst a total of 43 entities had financial statements outstanding after the reminder notice deadline, which triggered further action by the FMA.

A follow up report published on Friday 13 February 2015, shows the proportion of companies filing their financial statements on time has improved significantly and no new companies have been pinpointed for enforcement action for non-filing in 2014.

Read the latest non-filing of financial statements report here.

Need help to work out your FMC balance date?

To help issuers meet their financial reporting filing obligations, the FMA has launched an online tool to help work out your FMC balance date.

It is important reporting entities identify their balance date early so they can plan ahead to meet the shorter filing timeframes.

Please note, when answering question 1 – a “regulated offer” is defined as “an offer of financial products to one or more investors where the offer to at least one of those investors requires disclosure under the provisions of Part 3 of the FMC Act – this usually means providing a product disclosure statement. For the legal definition see section 41 of the FMC Act.  Our offer information page summarises the disclosure required for regulated offers. Please note, if a Schedule 1 exclusion applies to all investors, then it’s not a regulated offer.

Check the online balance date tool here.

Guidance note and response to submissions on the content and form of Disclose register information

The FMA has published a response to the submissions received from the recent ‘Consultation Paper: Content and form of Disclose register information’. We received 6 submissions in total and have published a summary of the key themes in our response, which you can read here.

Those submissions have now been considered and integrated into a guidance note.

The purpose of this guidance is to encourage issuers and their advisers to think about the content and form of their Disclose register entries.  It does not prescribe a single ‘best practice’ approach to register entries but rather encourages issuers and their advisers to use the flexibility in the FMC Act regime to develop appropriate market solutions.

You can read the guidance note here.

AML/CFT Audit - getting yours underway

For most businesses that are reporting entities for Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT), you must ensure your AML/CFT Audit is completed by 29 June 2015.

For most businesses this will be the first AML/CFT Audit to complete so we recommend starting early.  To help ensure you complete yours on time we have published information on our website, including how to get started, guidelines and FAQs that detail specific information on what is necessary to complete your audit.

If you have any questions, please check our FAQs first. If your question is not covered there, you can contact us at aml@fma.govt.nz for general AML/CFT queries. For any specific legal enquiries please consult your legal adviser.

Going Public - a director’s guide

We have also published a new handbook: Going Public – a director’s guide, following a recent consultation process. We received 6 written submissions which have been considered and integrated into the final handbook. They are summarised here.

The handbook is intended to help directors assess whether going public is the right choice for their company and to provide an insight into the process of becoming a public company.  It should be read alongside the handbook Corporate Governance in New Zealand: Principles and Guidelines which is a resource for directors, executives and advisers to help them understand what is expected of them more generally in their governance roles.

Governance and culture has been identified as one of our strategic priorities that will guide our work over the coming 3 years.

FMA Media releases – over the last 2 months

Questions?

For enquiries about any of these topics please email us at questions@fma.govt.nz