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Consultation on expiring class legislative notices

Page last updated: 30 Apr 2020

Throughout 2020 and 2021 we will be consulting on a range of class exemption and other legislative notices that are due to expire before the end of 2022. This page will be updated as new consultations are published, or you can subscribe to our updates to receive email alerts about new consultations.

Current consultations
  • Financial Advisers (Non-NZX Brokers – Client Money) Exemption Notice 2017
  • Financial Advisers (NZX Brokers – Client Money and Client Property) Exemption Notice 2015
  • Financial Markets Conduct (Offers of Financial Products Through Authorised Financial Advisers Supplying Personalised DIMS) Exemption Notice 2015
Submissions close Friday 22 May 2020
Make a submission Email: consultation@fma.govt.nz

Proposed extensions for three class exemption notices supporting the Financial Advisers Act regime

The Government has announced that the start of the new financial advice regime will be delayed as a result of the impact of the COVID-19 outbreak. The start date is now planned for early 2021 but the exact date is still to be confirmed. As the Financial Advisors Act 2008 will continue until the start date for the new regime, we are proposing to continue the exemptions under the following notices (that are due to expire in November this year) up until the start of the new regime:

Financial Advisers (Non-NZX Brokers – Client Money) Exemption Notice 2017
This notice exempts non-NZX brokers, subject to certain conditions, from the requirement to hold client money and property separately from firm money. This allows firms to hold a buffer of firm money in the client money trust account where it is reasonably necessary to reduce the risk of client money shortfalls. New regulations under the new financial advice regime are expected to allow brokers to hold firm money or property together with client money or property in certain circumstances, such as to reduce the risk of the client account being overdrawn due to delays processing payments. We do not expect continued exemption relief will be required once the new regime commences.

Financial Advisers (NZX Brokers – Client Money and Client Property) Exemption Notice 2015
This notice exempts NZX brokers, subject to certain conditions from the requirement to hold client money and property separately from firm money. The exemption permits the operation of gateway accounts for transacting with particular settlement systems. It also allows NZX participants to keep a limited buffer of firm money in their client account where it is reasonably necessary to reduce the risk of temporary client money shortfalls or facilitate settlements in a prudent or orderly fashion. As noted above, regulations under the new regime are expected to allow brokers to hold firm money or property together with client money or property in certain circumstances. We do not expect continued exemption relief will be required once the new regime commences.

Financial Markets Conduct (Offers of Financial Products Through Authorised Financial Advisers Supplying Personalised DIMS) Exemption Notice 2015
This notice applies to offers of financial products made through authorised financial advisers (AFAs) who are providing personalised discretionary investment management services (DIMS). It exempts the offer from the disclosure requirements in Part 3 of the FMC Act and provides that exempted offers are not considered to be regulated offers. The effect is to put offers made through these AFAs in the same position as offers made through DIMS licensees under Part 6 of the FMC Act, that benefit from a Schedule 1 exclusion. We do not expect continued exemption relief will be required once the new regime commences. AFAs providing personalised DIMS will be deemed to hold a DIMS licence under Part 6 on commencement of that regime (unless they opt out).

We welcome your questions or comments on these proposals.  The consultation period for these notices runs from Friday 1 May 2020 to Friday 22 May 2020.  Please provide your comments to consultation@fma.govt.nz