Financial Services Legislation Delayed Until New Year

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The Minister of Commerce and Consumer Affairs Kris Faafoi has delayed the start of the new financial advice regulatory regime from 29 June 2020 to early 2021.

The new regime is deemed by the government as important for promoting consumer confidence in financial advice. MBIE’s Sharon Corbett says the organisation remains committed to seeing the changes through.

“For now, however, it’s important the financial sector focuses as much as possible on supporting its customers as well as its own staff and their families,” she says a statement.

While the date of the new regime is yet to be released, Corbett says it won’t be until March 2021 at the earliest.

Transitional licensing

The transitional licensing application window will be extended until the same date in early 2021 and the new Code of Professional Conduct for Financial Advice Services will also come into force on that date.

We are aware that market participants are at varying levels of readiness for the new regime and that the delay will impact everyone differently…

The existing regime under the Financial Advisers Act 2008 will continue to apply in the meantime until the new regime commences.

Corbett says the organisation is still working through all the flow-on implications from this delay and the necessary legal mechanism to effect this change.

“We are aware that market participants are at varying levels of readiness for the new regime and that the delay will impact everyone differently,” she says.

The FMA has confirmed that transitional licensing will also remain open and the FMA licensing team will continue processing applications as resources are available and in time for the start date of the new regime next year.

The FMA has confirmed that transitional licensing will also remain open…

Those who have already had licences approved or who have already submitted a transitional licensing application will not need to reapply.

The disclosure regulations that were due to be made this month have now been delayed so that the commencement dates of those regulations can be updated. These regulations are to be made available within the next couple of months, says Corbett.

“This is exactly the right decision,” says Katrina Shanks, CEO of Financial Advice NZ.

“This will give members the breathing space to concentrate on advising and supporting clients through the implications of the current volatile markets. It’s great also that advisers who have already registered will not have to do so again.

“We all acknowledge the workload the Government is facing right now in these rapidly changing times, and it’s good to see that among all that’s going on financial advisers and the work we do is an important consideration.

“We encourage advisers to continue to work towards applying for their licence.”