1. About us
  2. What we do
  3. How we regulate
  4. Innovation


Page last updated: 14 Nov 2019

The FMA’s primary objective is promoting fair, efficient and transparent markets. We see our role in facilitating innovation as central to this objective. Innovation can provide better, cheaper and more convenient access to financial services and products, The FMA’s flexible regulatory regime and approach means the FMA has a number of tools to support fresh ideas and enable the implementation of new approaches to financial services and products.  However, new ideas and technologies often give rise to new risks, and investor interests still need safeguarding. The FMA therefore adopts a balanced approach when considering innovation.

Engage with us early

If you are developing an innovative new financial service or product, we recommend talking to us early in the design phase to determine if your idea is a product or service we regulate. If it’s not, you won’t need approval from us – you can simply get on with developing the idea. But if it’s something we regulate then you’ll have compliance obligations – which could range from simple registration through to full licensing. Please note that we cannot provide you with legal advice nor do we provide ‘sign off’ or endorsements on ideas, products or services. However, we can help you figure out what your compliance obligations might be.

What to tell us

Before you get in touch with us, have a think about how existing laws might apply to your idea. To understand your product or service we also need to know:

  • what your product or service does for consumers or businesses?
  • who are your customers (retail/non-sophisticated clients or wholesale/business investors)?
  • who will pay for the service or product and how?
  • what stage are you at (initial idea, in-development, seeking investment)?
  • what’s the likely launch date and is there enough time to get the necessary work completed?  
  • what risks does your service or product pose to consumers and what are your plans to mitigate them?
  • what kind of assistance are you seeking from the FMA?

What you might need to do

Everyone providing financial services or issuing financial products has an overarching obligation to ensure all advertising and promotional material is not false or misleading. This includes adequately explaining risks to customers or investors.

If you’re developing a simple financial service - such as an easy way for people to pay bills or transfer money between friends - you’ll need to register on the Financial Service Providers Register (FSPR) and join a dispute resolution scheme. You’ll also have anti-money laundering obligations, which will likely be supervised by the Department of Internal Affairs (we can help you get in touch with the right people in other organisations).

If you are pooling people’s money – perhaps to participate in a venture or to buy a building – you’ll need to consider applying for a licence from us. And you’ll also need to develop disclosure material setting out your offer details and the risks involved. Registration on the FSPR, dispute resolution scheme membership, and compliance with anti‑money laundering legislation will also be required.

If you’re developing a financial advice app or a service that makes investment decisions for customers then you’ll also need a licence. Again, these services require FSPR registration, dispute resolution scheme membership, and compliance with anti‑money laundering obligations.

Flexible regulatory regime

Our regulatory settings and approach are flexible enough to accommodate new and innovative products and services. Some smaller scale offers or schemes may be able to rely on pre-existing exclusions. These exclusions (set out in Schedule 1 of the Financial Markets Conduct Act 2013) remove disclosure and licensing obligations where offers and schemes are small or only available to certain types of investors.

If you need a licence, the FMA can modify the requirements to ensure the application and assessment process is ‘right-sized’ for your idea and business size. We don’t expect a start‑up to meet all the same standards as a well-resourced and established business.

The FMA, where appropriate, can also grant exemptions which reduce or modify disclosure and licensing obligations. Applications for exemptions require supporting material and involve some cost, so it’s best to talk to us first before you consider applying for one.

What has the FMA been doing?

We’ve been talking to other regulators, both here and overseas, to help us develop the best approach for New Zealand. We’ve also been openly engaging with innovative businesses, individuals, and interest groups to understand emerging trends and incorporating these ideas into our approach.

We’ve provided compliance information for those developing cryptocurrency services and products. We also facilitated the provision of digital-advice through exemptions. We continue to work with crowd-funding and peer-to-peer lending businesses.

The FMA has a supportive approach to innovation that improves outcomes for investors and customers and makes markets fairer and more efficient and transparent.