New rules governing the financial markets industry are one step closer to becoming law with the Financial Markets (Conduct of Institutions) Amendment Bill having passed its first reading in Parliament yesterday by a majority of six votes.
The Bill, which now moves to the Finance and Expenditure Select Committee, aims to increase protection for consumers when dealing with banks, insurers, and other financial service providers. It also includes provision for fairer and more transparent insurance contracts.
“These changes will complement the new conduct regime by ensuring customers understand their policies and are treated fairly in all their dealings with insurers,” says Commerce and Consumer Affairs Minister Kris Faafoi.
“The conduct programmes will also apply down the chain to intermediaries that licensed entities use to distribute their products and services.”
To support the Bill the Financial Markets Authority will have increased powers to require financial institutions to make changes to their business.
Faafoi says: “The recent reviews by the Financial Markets Authority and Reserve Bank of New Zealand, into the conduct of banks and insurers, found factors such as target-based sales incentives were leading to behaviour that put profit ahead of people.”
How they voted:
In favour: 63
Labour 46; New Zealand First 9; Green Party 8.
National 55; ACT 1; Ross (1).