Consultation paper: Proposed variations to standard conditions of market services licences

First published 17 November 2015

This consultation paper seeked to gather views on proposed variations to the standard conditions for Financial Markets Conduct Act 2013 (FMC Act) licences, including those for financial resources and audit requirements.

Submissions closed on Monday 14 December 2015.  All comments should be submitted to [email protected] with the subject line: ‘Proposed variations to standard conditions of market services licences: [Your entity name]’.  

Update

22 March 2016

Late last year, we asked for feedback on this consultation to vary some standard conditions of market services licences. Most submitters supported the direction of the changes. Therefore, many of the varied conditions remain the same as the consultation paper.

The key changes relate to the auditor’s procedures and the financial resources condition. In particular, managed investment scheme (MIS) licensees who have a supervisor, will now be required to report negative net tangible asset (NTA) positions to their supervisors, rather than to the FMA, and their auditor’s report will only cover the year-end NTA calculation on the basis of their audited financial statements.

We have also clarified certain definitions and time frames.

See above for a summary of the key themes of the submissions and the new varied standard conditions.

The new conditions will come into effect on, and from, 31 March 2016. This means that the new audit procedures and financial resources requirements will apply to licensees for accounting periods ending on or after 31 March 2016. We encourage all licensees to review and discuss the new conditions with their advisers.

If you have any queries, please contact us.