Regulatory and Licensing Requirements for Fintech Services

Before launching your financial service or product, it’s important to understand your compliance and legal obligations under the law. This includes whether you need to be licensed under the Financial Markets Conduct Act 2013 (FMC Act), meet disclosure requirements, or register under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (FSP Act). You may also need to comply with fair dealing provisions and Anti-Money Laundering and Countering Financing of Terrorism (AML/CFT) requirements.   

Registration of financial services

Under the FSP Act, if you are in the business of providing a financial service to persons in New Zealand, you must register on the Financial Service Providers Register for that service. Many businesses providing financial services to retail clients may also need to be a member of an approved dispute resolution scheme.

A ‘financial service’ is defined by the FSP Act, and can include:

• a financial advice service; 
• a regulated client money or property service (including a custodial service); 
• operating a money or value transfer service; 
• issuing or managing the means of payment (e.g. credit or debit cards, cheques, electronic money, etc.); 
• acting as an offeror of financial products; 
• acting as an issuer, supervisor, or investment manager of regulated products or financial products; 
• operating a financial product market; or 
• trading financial products or foreign exchange on behalf of other persons. 

Market services licences

You need a market services licence from the FMA if you offer certain ‘market services’ under the FMC Act to retail investors. These can include acting as:

• a manager of a registered managed investment scheme (or MIS); 
• an independent trustee of a restricted scheme; 
• a provider of a financial advice service; 
• a provider of a discretionary investment management service (or DIMS); 
• a derivatives issuer (in respect of a regulated offer of derivatives); or 
• a registered bank, a licensed insurer, or a licensed NBDT. 

You may also choose to hold a market services licence if you are acting as:

• a provider of prescribed intermediary services (such as a person-to-person lending intermediary or a crowd funding intermediary); or
• an administrator of a financial benchmark.

You may also need to hold other licences if you are performing other activities or providing other services, such as:

• acting as a supervisor in relation to a debt security or registered scheme; or
• operating a financial product market. 

More information about licensing can be found on our website at the guide:

Guide: How do I appy for a licence? [721KB]

This guide contains general information about the licensing process and includes many FAQs you might have; create a RealMe® identity, if you don't already have one.

Regulated offers of financial products

If you make a regulated offer of financial products to retail investors in New Zealand - such as equity securities, debt securities, managed investment products or derivatives, you’ll be subject to requirements under the FMC Act including disclosure obligations and in some cases licensing and governance requirements, including having a licensed supervisor.

The following flow chart serves as general guidance and is not comprehensive; it outlines key considerations for categorising your product under the FMC Act. Please be aware that a Market Service licence may still be required (refer to the information above), regardless of whether your product qualifies as a regulated financial product. We strongly recommend obtaining independent legal advice, as well as consulting with us once you are ready to proceed.

Further details regarding obligations for regulated financial products can be found here:

Offers under the FMC Act

Disclaimer:

This visual is intended as high-level, general guide to help businesses to understand potential categories of financial products under the FMC Act. It does not constitute legal advice and may not cover all scenarios or product types. Users should seek independent legal advice to confirm their obligations and licensing requirements under the FMC Act.