Consultation: Proposed guidance on reasonable grounds for financial advice about IPOs and listed equity securities

February 2023 

We have now published our guidance on reasonable grounds for financial advice about financial products, along with a compilation of responses to our consultation (see resulting documents above). We would like to thank all submitters for their feedback. 

We aim to review the guidance in 2025 but welcome feedback on any issues that may arise at any time. 

July 2022 

We are consulting on proposed guidance that explains the FMA’s approach to applying and enforcing Code Standard 3 of the Code of Professional Conduct for Financial Advice Services, in relation to financial advice about Initial Public Offerings (IPOs) and listed equity securities.

Code Standard 3 requires people who give regulated financial advice to retail clients to ensure that the financial advice given is suitable for the client, having regard to the nature and scope of the financial advice. The commentary to the standard explains that ensuring financial advice is suitable for the client should include having reasonable grounds for the financial advice.

We have focused on advice about IPOs and listed equity securities because it can be difficult to access expert research for these, particularly for smaller market capitalisation companies.