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Daily news update: FMA consultation paper, and more stories

FMA release draft licence conditions for consultation

Katrina Shanks of Financial Advice New Zealand hosted John Botica from the FMA to talk about the newly released licence conditions. You can find the consultation paper on licence conditions at this link: https://www.fma.govt.nz/assets/Consultations/FAP-full-licensing-standard-conditions-consultation-document.pdf . John Botica started by taking us through a reprise of the options for licence structures, which was valuable given the new classes of licence introduced by the paper for consultation. The consultation outlines three possible licence classes and eight possible standard licensing conditions, as follows:

Classes (Summarised)

  • Class A: Sole practitioner businesses
  • Class B: FAP providing advice on its own account and/or through Financial Advisers
  • Class C: FAP providing advice on its own account and/or through Financial Advisers and/or through Nominated Representatives and/or through engaged entities

Standard Conditions

  1. Record keeping
  2. Internal complaints process
  3. Regulatory returns
  4. Outsourcing
  5. Professional indemnity insurance
  6. Business continuity and technology systems
  7. Ongoing eligibility
  8. Notification of material changes

Further consultation on the regulatory return framework and methodology is planned, date unstated, but noting that such reporting by the FAP to the FMA will not be required during the two-year transitional licensing period.

Subscribers to the quarterly life report will see a review of the conditions and their possible impacts on business structure, digital advice, governance, connected systems, and capital requirements. 

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