1. What is the purpose and background of this exemption?
This exemption provides recognition for Australian qualified advisers when they apply to be Authorised Financial Advisers (AFAs) in New Zealand. ASIC is providing mutual recognition for New Zealand qualified advisers.
Prior to this exemption which was first granted in 2012 (and was amended by way of replacement in 2014 and 2016), the only avenue for recognition of Australian qualified advisers when they applied to be licensed advisers in New Zealand (ie AFAs) was through Trans-Tasman Mutual Recognition (TTMR) legislation. However this legislation has very limited application to financial advisers as it applies only to individuals (ie not firms) who are Australian licence holders when they apply to be authorised/registered under the New Zealand financial adviser regime.
FMA and ASIC have mutually agreed to provide recognition of each other's qualified advisers in addition to the recognition under the TTMR legislation.
2. What is the nature of this exemption?
Certain Australian advisers who meet the qualifications requirements under ASIC's regulatory guides to provide personal financial product advice to retail clients, will be given recognition when applying to be an AFA in New Zealand. This will only be in relation to the products they are qualified to advise on in Australia, where New Zealand has an equivalent licence.
3. What is the extent of exemption?
This is only an exemption from the educational competency requirements under the Code of Professional Conduct (the Code) for AFAs. The notice exempts people who meet certain Australian training requirements (Australian advisers) when they apply to be AFAs in New Zealand, from the educational competency requirements in Code Standard 15 (to the extent that it requires attainment of Unit 26360) and Code Standard 16 which requires an AFA to attain certain qualifications that are relevant to the financial adviser services to be provided.
The Australian adviser will be subject to:
the other eligibility requirements for AFAs (for example good character and criminal record checks, registration requirements, including dispute resolution scheme membership);
standard terms and conditions of authorisation as may be modified by FMA. In particular, the terms and conditions will include a requirement for the AFA to complete structured training in the first year of authorisation covering knowledge of the Financial Advisers Act, the Code and other relevant legal obligations;
all the other provisions of the Code, including
Code Standard 14 which contains the overarching requirement that an AFA must have the competence, knowledge and skills to provide a service.
The remaining requirements of Code Standard 15 to have knowledge of the Financial Advisers Act and Code and other legal obligations relevant to the adviser's practice. Attaining Unit 26360 of the New Zealand Certificate in Financial Services (Level 5) and other structured training are some of the ways an adviser can demonstrate that they have this knowledge.
This notice does not affect Australian financial services licence holders or credit licence holders who are able to be recognised under the Trans-Tasman Mutual Recognition Act 1997.
4. Who is most likely to utilise this exemption?
Primarily those Australian adviser representatives who are moving permanently to New Zealand. However, it may also be utilised by Australian adviser representatives who work for an Australian based entity and wish to be AFAs, rather than rely on the Financial Advisers (Australian Licensees) Exemption Notice.
5. What types of AFA licence will an Australian adviser be able to apply for under the exemption?
The Schedule to the Exemption Notice shows what services under RG 146 and RG 206 that the adviser must be qualified to provide and the corresponding AFA licence scope and financial products that the adviser may apply for.
For example, an adviser that meets the RG 146 requirements to provide personal advice to retail clients on securities, derivatives, managed investment services and other financial products or activities will be able to apply for an authorisation to provide financial advice on all financial products. We note, in addition to the specialist knowledge requirements, this adviser will need to have met the generic knowledge and skill requirements under RG 146. The adviser must also have worked as an Australian representative or Australian licence holder for at least 6 consecutive months within the last three years, prior to the application to the FMA for authorisation, either as a representative of an Australian financial services licensee or Australian credit licensee or under the adviser’s own licence.
6. What is the procedure for an Australian adviser applying to be an AFA through the exemption?
Advisers should first notify the FMA that you are considering applying as an Australian adviser under the Exemption.
We will check if you meet the key criteria for Australian Qualified Advisers and review your Australian qualifications. We will discuss the New Zealand AFA licence scope and financial products you are eligible to apply for.
Once confirmed the procedure is as follows:
Complete the usual application for registration as a financial adviser online on the Financial Service Providers register website, including paying the registration fee
Do not carry on to complete the AFA part of the online application. Instead, complete the Australian Qualified Advisers AFA application form we provide when notifying you are eligible to apply. You will be required to attach supporting documents.