First QFEs Granted

(Media releases from the Securities Commission)
14 March 2011

The first Qualifying Financial Entities (QFEs) licences have been granted today signalling the next step in the implementation of the new financial advisers regulatory regime.

Securities Commission Director of Financial Adviser Regulation, Mel Hewitson, says the Commission has been processing applications from around 80 organisations and the majority of licences will be granted by 1 April. Applicants range from small insurance brokers to major banks and insurance companies.

"QFE status gives organisations an efficient way to meet their new regulatory responsibilities", says Ms Hewitson.

"It means they will take responsibility for ensuring their advisers deliver professional adviser services to retail consumers. In return, they don't need to individually register each person."

"Many New Zealanders get their advice on investments, insurance and mortgages from these organisations. We want them to be confident they're dealing with an organisation committed to ensuring their advisers follow the new rules."

Some 20,000 employee advisers and nominated representatives will come under QFE umbrellas. The vast majority will deal only with simple debt and insurance products but some QFE advisers will advise on more complex investment products, such as KiwiSaver, produced by their QFE. Advisers who wish to offer investments from a range of organisations have to be individually licensed by the Commission before 1 July.

"Grant of status is the first step in our regulatory relationship with QFEs," says Ms Hewitson.

"We'll now be working closely with those organisations to monitor how they are complying with their responsibilities."

Ends

Contact: Rebecca Barclay 04 471 7666

Note to editors:

Qualifying Financial Entities as at 14 March 2011

  • ACM Insurance Limited
  • AMP Services (NZ) Limited
  • Farmers Mutual Group
  • Fisher Funds Management Limited
  • Instant Finance NZ Limited
  • Spicers Portfolio Management Limited

Other names will be published on the Commission website as licensed.

Key steps in the introduction of the new financial adviser regulatory regime

DATE REGULATORY REGIME REQUIREMENT
1 December 2010

All financial advisers must comply with the conduct obligations of the Financial Advisers Act 2008

All people and organisations providing financial services must be registered (except financial advisers who have until 31 March 2011)

1 April 2011 Financial Service Providers Act 2008 fully in force. Advisers providing financial services must be individually registered unless they are acting on behalf of a Qualifying Financial Entity (QFE)
1 July 2011 Financial Advisers Act fully in force. Only Authorised Financial Advisers can offer retail clients investment planning services, personalised financial advice or discretionary investment management services on complex products (unless they are acting on behalf of a QFE)