Financial Institution licensing

If you are a prudentially registered bank, licensed insurer, or licensed non-bank deposit taker, and in the business of providing one or more relevant services to consumers in New Zealand, you will need a financial institution licence to continue providing these services from the date the CoFI regime comes into force (expected to be early 2025). Refer to the diagram on our CoFI page for further guidance on who needs a financial institution licence.

New Zealand’s financial markets are regulated under a “twin peaks” model. This means that two regulators – the FMA and the Reserve Bank – both have shared responsibility for regulating financial institutions. However, each of these entities are tasked with separate functions. The FMA’s remit is primarily conduct regulation, while the Reserve Bank’s remit is prudential regulation. 

All entities which will be issued with a financial institution licence by the FMA under the CoFI Act are also separately prudentially licensed and regulated by the Reserve Bank. Due to the different remits of the two regulators, the FMA cannot rely on the conditions imposed on licences issued by the Reserve Bank in order to monitor our own licensed population. We will impose our own conditions on licences, to ensure licence holders continue to meet the licensing requirements under the FMC Act, and to help us effectively monitor the licensed population. 

Yes, an application for a financial institution licence can include authorised bodies. An authorised body is a related body corporate named on a licence that can provide the licensed service without needing its own licence. Both the licensee and any authorised bodies must (collectively) meet the eligibility criteria set out in section 400(1A) of the FMC Act. For more information refer to the financial institutions licensing guide. 

We will start accepting applications for financial institution licences from 25 July 2023. We will continue to accept applications for financial institution licences at any time, however existing banks, insurers and non-bank deposit takers will need to have their financial institution licence approved by the date the new regime commences in early 2025, in order to continue providing relevant services to consumers.

We strongly recommend that you submit your application early to ensure your licence is processed before the CoFI regime comes into force.

In early 2023, MBIE is expected to confirm the exact date the regime will commence.

If you want to make any changes to your application during the assessment process, before your licence is assessed or granted, please contact us.

A financial institution licence will have no expiry date unless the FMA specifies one, or you give notice to cancel your licence, or the FMA withdraws it. 

We will start accepting applications for financial institution licences from 25 July 2023. We currently aim to process licence applications within 60 working days of receipt.  However, this timeframe can vary depending on the nature of the application, as well as the volume and complexity of other applications being processed at the time.  

By submitting an application as early as possible, applicants will give themselves the best chance of ensuring their licence is processed before the CoFI regime comes into force in early 2025.

No, because a licence application is a point-in-time assessment of the applicant’s capability to provide a particular licensed service. The FAP licence application relates to the applicant’s capability to provide a financial advice provider service, which is different to a financial institution service. Therefore, we need to collect different information to assess the applicant’s capability to provide the financial institution service. 

We do, however, take into account the information we already hold about an applicant when we are assessing a new licence application (such as information submitted as part of a FAP licence application).

No, there are not separate classes or types of licences for each type of financial institution.    

If you haven’t been notified that your licence has been issued by the time the CoFI regime comes into force, you will not be allowed to provide relevant services to consumers.

If you have questions or concerns about the processing of your application, please contact us.

After receiving your application, we will send an email notification acknowledging receipt. Then, as we assess your application, we may contact you to clarify your application (or certain parts thereof) or to request further information.  

After processing your application, we will email you to confirm whether your licence has been approved or declined, or if it requires specific conditions.  

If your licence is approved, we will update the Financial Service Provider Register. 

Yes, there will be six standard conditions imposed on every financial institution licence issued by the FMA.  View the financial institution standard conditions document for more information.

We may impose additional conditions on an individual licence (known as “specific conditions”) on a case-by-case basis. You will be notified if any specific conditions have been imposed on your licence at the time we grant it. 

Conditions are necessary to ensure licence holders continue to meet licensing requirements, and to help us effectively monitor the licensed population.  

On 20 July 2022, we released a consultation paper seeking feedback on our proposal to impose six standard conditions on financial institution licences. We received written submissions from a range of stakeholders and, after carefully considering the submissions, decided to impose six standard conditions on each financial institution licence issued. For more information, see our response to the feedback we received and the Regulatory Impact Statement, which assesses the impacts of the standard conditions.

View the consultation response feedback

View the financial institutions standard conditions document

View the financial institutions Regulatory Impact Statement (RIS)

The FMA plans to continue engaging with financial institutions on a range of topics around the CoFI regime, including licensing. Details will be communicated to the relevant financial institutions closer to the time of each engagement.