QPR: Updates for Implementation of new FSLAA Regime

To help you prepare for the implementation of the Financial Services Legislation Amendment Act implementation on 15 March Quality Product Research Limited has made the following changes to the Quotemonster site:

  1. Prepared an outsourced provider statement. This provides you with information to meet the license conditions for a Financial Advice Provider to use a third party (us) as part of your advice process (for example: preparing comparison quotes and research reports). Subscribers to the research and advicemonster services will see an announcement when they next log in. A link to the outsource provider statement is included in the site in the About Us section. 

  2. Updated Advicemonster – an external review has been conducted, the draft statement of advice (SOA) has been updated, and the system for preparing the SOA has been improved. If you are an Advicemonster subscriber we suggest you run a new trial needs analysis to check out the new report – it is a more comprehensive and robust document that speeds up the process of creating new life and health statements of advice. If you don’t subscribe, or you would just like a quick refresher on how to use the system, click here to request a demonstration.

  3. Updated our terms and conditions – refer this link for details. Also, a link to the terms is included in the site in the About Us section, and on every page in the site. 

Coming up: there will be further changes to the adviser profile page to reflect changes to the FSPR due to the new license regime. We will update you on those next week. If you have any questions or concerns, please contact us or call (09) 480 6071. Thank you for being a customer of Quality Product Research Limited.


Legal and regulatory review for the health and life insurance sector

1 Feb 2021 – Minister of Commerce and Consumer Affairs, Hon David Clark, December 2020 diary released with the following potential financial services sector related meetings noted:

  • 2 Dec 2020 – Announcement of clearer lending rules (Attendees not listed)
  • 2 Dec 2020 – Meeting with NZ Bankers Assn (Chief Executive, Government Relations Director, Policy Director, of NZBA)
  • 4 Dec 2020 – Attendance at NZBA end of year luncheon
  • 9 Dec 2020 - Meeting with Commission for Financial Capability (Retirement Commissioner)
  • 10 Dec 2020 – Announcement about Merchant Service Fees (Attendees listed as “stakeholders”)
  • 10 Dec 2020 – Meeting with Financial Markets Authority (Chair, Chief Executive, Director Strategy, of the FMA)
  • 14 Dec 2020 – Meeting with Citizens Advice Bureau (Chief Executive of CAB)
  • 15 Dec 2020 – Meeting with Financial Services Federation (Executive Director, Board Members of FSF)

https://www.beehive.govt.nz/sites/default/files/2021-01/Hon%20Dr%20David%20Clark%20Proactive%20Diary%20Release%20December%202020.pdf


Legal and regulatory update for the life and health insurance sector

27 Jan 2021 – Privacy Commissioner announced that he will virtually chair an international Computer Privacy and Data Protection conference over 27-29 Jan, commencing NZ time 5 p.m. on Thursday, 28 Jan, with a live stream available. https://www.privacy.org.nz/resources-2/forums-and-seminars/computer-privacy-and-data-protection-conference-cdcp/

28 Jan 2021 - FMA released its review of NZX technology issues finding the stock exchange failed to meet its licensed market operator obligations due to insufficient technology resources. NZX also released a response to the FMA review. Relevant FMA and NZX web links are https://www.fma.govt.nz/news-and-resources/media-releases/fma-releases-review-of-nzx-technology-issues/ and https://www.nzx.com/announcements/366811

28 Jan 2021 – RBNZ released the results of a research report showing the Māori economy is increasingly diverse and opportunities remain for it to continue growing and reach its full potential. https://www.rbnz.govt.nz/news/2021/01/e-hauora-ana-e-matahuhua-ana-te-ohanga-maori-e-ai-ki-nga-rangahau


FSC Get in Shape Conference

The FSC Get in Shape Conference is just around the corner and we thought it was a good time to highlight what to expect if attending. The conferences will be held in Wellington, Auckland, Christchurch and Dunedin. The FSC has ensured relevant topics are discussed by industry leaders in the sessions and Masterclass. Highlights of the conference include:

  • Meet and engage with the leaders shaping our sector and regulatory landscape. These include Leaders from the MBIE, the FMA, the CFFC and the financial advisory sector.
  • Consumer focus - We will unpack the latest research from across the NZ and the globe  and understand how Financial Advice is helping Kiwis lead better lives.
  • Engage with Leading legal minds at the Masterclass - The masterclass is curated by those that understand what it really means to succeed under the new regulation. Our line up of legal experts and leading advisers will be run in a practical workshop style to have you thinking outside the box and teach you how to best use resources available to you.
  • Connect  and network with your colleagues - After a very tough 2020, join your colleagues for a morning of learning, engaging and getting inspired for the year ahead.
  •  Meet  you in the market place – Once again our marketplace expo is the meeting place to connect with your suppliers and partners.
  • CPD -  Get your CPD & learning program off to a strong start for 2021. All sessions will be assessed and all attendees will receive CPD certificates for sessions attended. 

Those interested in attending can register here and find the dates and location below.

WELLINGTON
Wednesday, 10 February 2021
Arrival from 7:15am, welcome at 8:00am, advice summit close 12:45 followed by Masterclass from 1.15pm until 3.15pm

Members Gallery
Sky Stadium
105 Waterloo Quay
Pipitea,
Wellington 6140

AUCKLAND
Thursday, 11 February 2021
Arrival from 7:15am, welcome at 8:00am, advice summit close 12:45 followed by Masterclass from 1.15pm until 3.15pm

North Level 5 Lounge
Eden Park Function Centre
10 Reimers Ave
Kingsland
Auckland 1024

CHRISTCHURCH
Wednesday, 17 February 2021
Arrival from 7:15am, welcome at 8:00am, advice summit close 12:45 followed by Masterclass from 1.15pm until 3.15pm

Tait Technology Centre
245 Wooldridge Road
Harewood
Christchurch 8051

DUNEDIN
Thursday, 18 February 2019
Arrival from 10:00am, welcome at 10:30am, close 3.00pm followed by Masterclass from 3.15pm until 5.15pm

Dunedin Centre
1 Harrop Street
Dunedin 9016

Get In Shape 2021 Big Banner v1 - Financial Services Council


Legal and regulatory update for the life and health insurance sector

10 Jan 2020 – RBNZ announced that it is responding with urgency to a breach of one of its data systems. A third-party file sharing service used by the Bank to share and store some sensitive information, has been illegally accessed. https://www.rbnz.govt.nz/news/2021/01/reserve-bank-responding-to-illegal-breach-of-data-system

6 Jan 2021 – Police Financial Intelligence Unit released the November 2020 Suspicious Activity Report. https://www.police.govt.nz/sites/default/files/publications/fiu-monthly-report-nov-2020.pdf


Legal and regulatory update for the life and health insurance sector

23 Dec 2020 - The Commerce Commission released its updated Authorisation Guidelines that explain its approach to assessing applications to authorise agreements or mergers in the public interest. https://comcom.govt.nz/news-and-media/media-releases/2020/commission-publishes-revised-authorisation-guidelines-and-application-forms

23 Dec 2020 – The Open Government Partnership released Progress reports for Third National Action Plan and Meeting Papers. https://ogp.org.nz/latest-news/progress-reports-for-third-national-action-plan-and-meeting-papers/

22 Dec 2020 – Courtesy of Dentons Kensington Swan, note the release of the following regulations and other information during this month, in addition to those items included in the FMA update or the MBIE release on 17 Dec 2020:

  • Financial Markets Conduct (Fees) Amendment Regulations 2020
  • Financial Markets (Derivatives Margin and Benchmarking) Reform Amendment Act Commencement Order 2020
  • Financial Markets Conduct (Licensing of Administrators of Financial Benchmarks) Amendment Regulations 2020
  • Financial Markets Conduct (Overseas Providers of Custodial Services – Assurance Engagement) Exemption Notice 2020
  • Financial Markets Conduct (Australian Licensees) Exemption Notice 2020

22 Dec 2020 – Courtesy of Dentons Kensington Swan, note the submission opportunities closing at the start of 2021 as follows:

Ministry of Business, Innovation and Employment:

  • Updating the Responsible Lending Code – submissions close 15 January 2021, 5pm.
  • Regulating to reduce merchant service fees – submissions close 19 February 2021, 10am.

Reserve Bank of New Zealand:

  • Review of the Insurance (Prudential Supervision) Act 2010 (scope of the Act and treatment of overseas insurers) – submissions close 18 February 2021.
  • Review of the Insurance Solvency Standards – submissions close 18 February 2021.
  • Reinstating Loan-to-Value Ratio restrictions – submissions close 22 January 2021.

Financial Markets Authority:

  • Proposed guidance on advertising offers – submissions close 16 February 2021.

Parliament:

  • Reserve Bank of New Zealand Bill – submissions close 4 February 2021.

Legal and regulatory update for the life and health insurance sector

16 Dec 2020 – The FMA published its Annual Report for the year ended June 2020. https://www.fma.govt.nz/news-and-resources/media-releases/fma-publishes-2020-annual-report/

17 Dec 2020 – FMA released its latest regular monthly update, which included advice of two consultations expected to commence in the first quarter of 2021, being:

  • Review of the Wholesale Investor $750,000 Minimum Investment Exclusion Exemption Notice 
  • Potential exemption relief for restricted schemes from certain disclosure requirements

The FMA also advised in the update of the publication of two information sheets as follows:

Further FMA guidance identified as published on the FMA website during Dec 2020 includes:

17 Dec 2020 – MBIE advised of the publication of various regulations to support the Financial Services Legislation Amendment Act 2019 and other recent legislation changes, including:

• replacing terminology from the Financial Advisers Act 2008, such as references to “category 2” financial products and authorised financial advisers. Note:
The existing treatment under the Financial Markets Conduct Regulations 2014 in relation to category 2 products (for example in relation to whether a PDS needs to be given) is preserved.
Transitional provisions have been included to give affected providers time to update documents that refer to “authorised financial advisers” and “financial advisers”;
• carrying over the effect of the Financial Advisers (Custodians of FMCA Financial Products) Regulations 2014 with some updates and clarifications;
• prescribing limited circumstances in which client money and firm money can be held together, to reflect the effect of existing FMA exemptions for NZX brokers and Non-NZX brokers;
• prescribing when firm money that is held together with client money is to be treated as client money;
• prescribing the statement that lenders can give to make clear to consumers that the limited exclusion from the financial advice regime relating to lender responsibilities applies;
• prescribing requirements for the record of nominated representatives that must be maintained by providers;
• requiring AFAs and QFEs that continue operating in the industry to retain records that were required to be held under the Financial Advisers Act 2008;
• carrying over exemptions contained in regulations under the Financial Advisers Act 2008;
• updating a cross-reference in the financial advice disclosure regulations so that financial advice providers are able to refer to their website when disclosing information about their legal duties;
• enabling financial advice providers to provide contingency DIMS without being subject to DIMS licensing requirements. This carries over and updates an existing licensing exemption for contingency DIMS provided by authorised financial advisers. The regulations also include transitional arrangements where an authorised financial adviser named in a contingency DIMS investment authority is engaged by a financial advice provider;
as well as the following in relation to financial products more generally:
• providing that certain provisions of the Trusts Act 2019 do not apply to PIE call fund unit trusts and PIE term fund unit trusts;
• updating the disclosure information that must be given by managed investment schemes to reflect changes in the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 relating to tax refundability.

17 Dec 2020 – Privacy Commissioner released the December version of Privacy News, which included information on the release on 8 Dec 2020 of guidance to Ministers and departments to help them determine when personal information can be disclosed to a Minister by a government department. https://privacy.org.nz/publications/guidance-resources/guidance-to-ministers-and-government-departments/


Legal and regulatory update for the life and health insurance sector

4 Dec 2020 - Law Commission issued a consultation seeking views on whether New Zealand should have class actions and litigation funding, with submissions closing on 11 March 2021.

https://www.lawcom.govt.nz/media-release/law-commission-seeking-views-class-actions-and-litigation-funding

4 Dec 2020 – MBIE advised that, as a result of recent changes to the legislation and regulation, the current Responsible Lending Code needs to be updated. A consultation has been opened on the draft updated Responsible Lending Code, with submissions closing on 15 January 2021.

https://www.mbie.govt.nz/have-your-say/updating-the-responsible-lending-code/


Legal and regulatory update for the life and health sector

1 Dec 2020 - The Government announced the extension of the Business Debt Hibernation (BDH) scheme by 10 months to 31 October 2021, introduced earlier this year as part of temporary relief measures aimed at helping businesses cope with the economic impacts of COVID-19. https://www.beehive.govt.nz/release/government-extends-business-debt-relief-october-2021

2 Dec 2020 – Minister of Commerce and Consumer Affairs announced new rules to protect Kiwis from unaffordable loans in the form of the Credit Contracts and Consumer Finance (Lender Inquiries into Suitability and Affordability) Amendment Regulations 2020, coming into force on 1 Oct 2021. https://www.beehive.govt.nz/release/new-rules-protect-kiwis-unaffordable-loans

1 Dec 2020 – Privacy Commissioner issued a reminder that the Privacy Act 2020 came into force on this date.


Update to reference standards for Financial Advice Providers

Following the release today by the FMA of the final Classes and standard licence conditions for Financial Advice Providers, we have updated our pack of 'reference standards' for a licensed FAP. This document brings together in a single handy reference a summary of the different laws, regulations, and guidance, applicable to operating a Financial Advice Provider. Clients using us for governance, risk, and compliance work will receive a copy of the updated reference standards guide. Contact us if you would like to receive one. 

The main change at this point is the replacement of the consultation material on classes and standard conditions for a FAP licence with material extracted from the two new FMA documents covering:

  • Classes of licence
  • Final standard conditions for a FAP licence

The reference standards document is still incomplete and will remain incomplete until the FMA releases two outstanding documents as follows:

  • FMA License Guide for Financial Advice Providers (expected this month)
  • Annual Regulatory Reporting Requirements (still to be consulted upon next year)