MR No. 2022 – 23
The Financial Markets Authority (FMA) - Te Mana Tātai Hokohoko has released a consultation paper on proposed standard conditions for licences granted under the Financial Markets (Conduct of Institutions) Amendment Act 2022 (CoFI).
The CoFI Act will introduce a new regulatory regime for the conduct of registered banks, licensed insurers and licensed non-bank deposit takers, with an overarching principle for these institutions to treat consumers fairly.
Once the new regime comes into force (expected in early 2025), registered banks, licensed insurers and licensed non-bank deposit takers providing services to consumers will need to operate under a ‘financial institution licence’ issued by the FMA. All licence holders and each of their authorised bodies will need to comply with the standard conditions.
The FMA is proposing six standard conditions for licences:
The standard conditions are consistent with those imposed on other licences issued by the FMA, such as financial advice provider licences.
Clare Bolingford, FMA Director of Banking and Insurance, said: “We strongly encourage industry and stakeholder feedback on our consultations to ensure our regulatory proposals are fair and appropriate. The standard conditions for financial institutions are especially important given these businesses play such an important role in New Zealanders’ everyday lives.”
Licence conditions may impose limits or restrictions on the services that are covered by the licence, or impose conditions in relation to the licensing assessment requirements. Conditions are necessary to ensure licence holders continue to meet those requirements, and to help the FMA effectively monitor the licensed population.
The FMA expects to start accepting licence applications in mid-2023, about 18 months prior to the new legislation coming into force.
Submissions close at 5pm on Wednesday 7 September. The FMA will announce final standard conditions at a later date.