The Financial Markets (Conduct of Institutions) Amendment Bill has been passed into law. It means banks, insurers, and non-bank deposit takers (NBDTs), will work under a new legislative regime that will require a licence from the FMA.
The FMA says the new law will enable regulations to be made to prohibit target-based sales incentives, and financial institutions will also have obligations in relation to how they design and manage other types of incentives.
Banks, insurers, and NBDTs will need to comply with a fair conduct principle to treat consumers fairly, says the FMA. They will be required to establish, implement, and maintain a fair conduct programme designed to ensure compliance with the fair conduct principle and take all reasonable steps to comply with their programme.
Samantha Barrass, FMA CEO, says: “This will enhance the culture of core financial services in New Zealand, with a focus on putting conduct and the fair treatment of customers at the heart of every business.
“Firms will be held to account by the FMA for the way they sell products and look after their customers. This brings New Zealand into line with comparable countries overseas.
“It is critical that consumers get the financial products and services they need throughout their life and receive fair treatment in all their dealings with financial institutions. Consumers should have trust and confidence that the institutions who sell products and services to them will always do the right thing.”