Hon Simon Power, Minister of Commerce
23 June 2011
Commerce Minister Simon Power today announced the final steps in implementing the financial adviser regime, which comes fully into force on Friday of next week.
They are in the form of minor technical regulations under the Financial Advisers Act, and were approved by Cabinet this week.
They reclassify a number of products that are considered less complex and less risky.
The following are now categorised as Category 2 products under the Act:
"Potential risk faced by investors should be matched by the scale of regulation, so the regulatory costs for affected businesses should be lower for less risky products," Mr Power said.
The regulations come into effect next week along with the Act. By that date, advisers seeking authorisation must have completed training and have had their authorisation confirmed by the Financial Markets Authority. The Government has granted an extension to advisers in Canterbury, who have until 1 October to be compliant.
"The financial adviser regime holds our financial advisers accountable for their advice and imposes a high standard of competency and professionalism.
"It's an essential part of building a financial sector in which mum and dad investors can have confidence."
Under the Act, advisers are required to be listed on a public register, and those who provide services to the public must belong to an approved dispute resolution scheme.
Authorised financial advisers are also subject to a Code of Professional Conduct, which ensures they meet minimum standards for ethical behaviour, client care, knowledge, skills and competence, and continuing professional development.
The Financial Advisers (Definitions, Voluntary Authorisation, Prescribed Entities, and Exemptions) Amendment Regulations are available on the Ministry of Economic Development website.