financial services legislation amendment act

4. in the ordinary course of certain occupations, such as conveyancing practitioners, journalists, lawyers, lecturers, qualified statutory accountants, real estate agents, registered legal executives, registered valuers, tax agents, and teachers; incidental to providing credit under a credit contract, or for the purpose of complying with lender responsibilities; by Crown-related entities, trustee corporations, or non-financial not-for-profit organisations in the ordinary course of business; by an employer to an employee in relation to financial advice products made available through the workplace; and. A’s period of authorisation or period of a grant of QFE status would, but for this clause, terminate under section 57(1)(a) or 75A(1)(a) of that Act after that commencement. if A has reasonable grounds to believe that a member that is a registered bank, a licensed insurer, or a licensed NBDT has contravened or is likely to contravene any of the following Acts in a material respect, communicate that fact to the Reserve Bank: the Reserve Bank of New Zealand Act 1989: the Insurance (Prudential Supervision) Act 2010: the Non-bank Deposit Takers Act 2013; and, if A has reasonable grounds to believe that a member that is a financial markets participant has contravened or is likely to contravene any financial markets legislation in a material respect, communicate that fact to the FMA; and, if A has reasonable grounds to believe that a member that is a creditor under a consumer credit contract has contravened or is likely to contravene the Credit Contracts and Consumer Finance Act 2003 in a material respect, communicate that fact to the Commerce Commission; and. in relation to a consumer credit contract or relevant insurance contract (the agreement); and, in order to comply with the lender’s lender responsibilities; or, as a reasonably incidental consequence of complying with the lender’s lender responsibilities; and. This Act may also apply to a person who registers for financial advice services under section 22C (even though the person is not in the business of providing a financial service). if it is to be served under subclause (1)(a), be served at least 48 hours before the attendance of the witness is required: if it is to be served under subclause (1)(b) or (c), be served at least 10 days before the attendance of the witness is required. 7. Financial advice is not regulated financial advice if it is given in the ordinary course of the business of one of the following: a Crown entity under section 7 of the Crown Entities Act 2004, other than Public Trust: a department named in Schedule 1 of the State Sector Act 1988: a government-related organisation as defined in section 4 of the Crown Organisations (Criminal Liability) Act 2002: an employee (as defined in section 2 of the State Sector Act 1988): a chief executive in any part of the State services (as defined in section 2 of the State Sector Act 1988): the holder of, or a person performing the duties of, an office established by an enactment (other than the Māori Trustee): a person performing duties that are expressly conferred on him or her by virtue of his or her office by an enactment; and. This determines whether a financial advice provider needs to be licensed and whether certain duties apply: Part 2 sets out situations when financial advice is not provided and when financial advice services are not regulated under this Act: Part 3 sets out situations when client money or property services are not regulated under this Act: Part 4 provides for a code of professional conduct for financial advice services and for the establishment and operation of a code committee: Part 5 provides for complaints and disciplinary proceedings against financial advisers. A provider who receives or holds client money on trust for a client must keep, or ensure that there are kept, trust account records that disclose clearly the position of the client money in the trust account. This section does not apply to a decision that may be appealed under subpart 9 of Part 8 of the Financial Markets Conduct Act 2013. This section does not limit section 3 or 4. See sections 532A to 532C, which provide for an appeal from a decision under this clause. a regulated client money or property service (including a custodial service): issuing or managing the means of payment (for example, credit or debit cards, cheques, travellers’ cheques, money orders, bankers’ drafts, or electronic money): acting as an offeror of financial products offered under an FMC offer: any of the following market services if the service is, or is required to be, provided under a market services licence (whether as a licence holder or as an authorised body): acting as a manager of a registered scheme (other than a restricted scheme): acting as an independent trustee of a restricted scheme: acting as a provider of a discretionary investment management service: acting as a provider of prescribed intermediary services: that is the same, or substantially the same, as a service referred to in paragraph (ib); but. A provider must comply with any prescribed duties and other requirements in relation to the client money and client property held on trust under this section. Link to Related Legislation: Financial Services Authority Act, 2013. This section is a Part 6 services provision, contravention of which may give rise to civil liability (see section 449): conditions of the provider’s licence may also limit the types of advice that may be given by financial advisers or nominated representatives (see sections 403(4)(a) and 546(1)(d)(iv)): people who give financial advice, financial advice providers, and any interposed persons are subject to the duties set out in sections 431I to 431R: section 431H sets out who is responsible if those duties are contravened and the nature of the person’s liability. in relation to a financial advice service, means a person who receives the service (whether or not on payment of a charge); and, in relation to a client money or property service, means the person on whose behalf the client money or client property is received, held, paid, or transferred under the service (but excludes the product provider); but, does not include a person who receives the financial advice or client money or property service from another person if the service is both provided and received in the course of, and for the purposes of,—, the businesses of related bodies corporate; or. Explore your options Financial Markets Authority (FMA) website Also in this section. disclosure provision means section 99, 427(2) or (6), 431P, or 431Y or clause 27 of Schedule 1. in relation to section 99, the act of providing or making available the ongoing disclosure: in relation to section 427(2), the act of providing the disclosure statement to a person: in relation to section 427(6), the act of providing or making available the further disclosure: in relation to section 431P or 431Y, the act of making the information available to a person: in relation to clause 27 of Schedule 1, the act of providing the limited disclosure document to a person, relevant omission means an omission as referred to in section 99(1)(a)(ii), 427(1)(a)(ii) or (6)(a)(ii), 431P(1)(a)(ii), or 431Y(1)(a)(ii) or clause 27(1)(a)(ii) of Schedule 1 (as the case may be). 6. A person whose registration is suspended is taken not to have that registration while it is suspended. an individual who is exempted from the obligation by section 48A; or. A person may appeal to the District Court against a decision of the disciplinary committee to take any action referred to in clause 46 of Schedule 5 against the person. specify any of the matters referred to in section 548(1)(p)(i) to (iv); and, specify different matters for different classes of applicant or other circumstances (including specifying time frames within which different classes of applicant must make an application for a licence); and. a transitional licence may not cover a type of market service other than a financial advice service. A is a financial adviser or a nominated representative nominated under section 431T by P: A is engaged directly by P (as described in section 431E(a)); or. This section applies if, under section 403(4)(b) and (c), a licence relating to a financial advice service—. The code must provide for minimum standards of professional conduct that must be demonstrated by persons who give regulated financial advice, including minimum standards—, of general competence, knowledge, and skills that apply to all persons that give financial advice; and, of particular competence, knowledge, and skills that apply in respect of different types of financial advice, financial advice products, or other circumstances; and. When the FMA has, under clause 42, investigated a complaint about a financial adviser, it may refer the complaint to the disciplinary committee if, in the FMA’s opinion, the conduct complained of amounts to a contravention of a provision of subpart 5A of Part 6 (for example, a contravention of the code). 6. The type of service can be given only by a financial adviser (that is, a person who is registered under the FSP Act in relation to a financial advice service). This clause is only a guide to the general scheme and effect of this schedule. the code committee must as soon as practicable comply with the Minister’s direction. Part 6 of this Act applies in relation to transitional licences with all necessary modifications including the following: references in sections 397 and 398 to a decision under section 396 must be treated as references to a decision under clause 73: sections 396, 397(1)(b) and (c), 399, 403(3)(c), and 407 do not apply: references to the requirements of section 396 or 400 in section 403(3)(b) or subpart 3 of Part 6 of this Act must be treated as references to the requirements of clause 73 or 74. In section 157(4), replace “an authorised financial adviser” with “a financial advice provider”. a licence under subpart 2 of Part 6 of this Act that covers the service of acting as a provider of a financial advice service. ABC Limited satisfies the licensing requirements in clause 73 and is granted a transitional licence. borrower has the same meaning as in section 9B(1) of the CCCF Act, CCCF Act means the Credit Contracts and Consumer Finance Act 2003, lender has the same meaning as in section 9B(1) of the CCCF Act, lender responsibilities means the lender responsibilities set out in section 9C(3)(a) to (e) and 9C(5) of the CCCF Act. A summons that is posted is treated as having been served when it would have been delivered in the ordinary course of post. For the purposes of subclause (1), a reference in clauses 32 to 39 of Schedule 5 to the code committee includes a reference to the code working group. The Registrar may treat section 18(1)(b) as satisfied (and may, accordingly, deregister a provider under that paragraph) if the provider does not comply with a requirement under subsection (1A). In section 397(2), replace “limits or restrictions under section 403(3)(a)” with “limits, restrictions, or other conditions under section 403(3)(a) or (4)”. A notification may be specific to a particular service, or class of services, or may be general for all services provided by the financial advice provider or CMPS provider to whom it is given. appoint a member of the code committee; or. A person who gives regulated financial advice to a client must exercise the care, diligence, and skill that a prudent person engaged in the occupation of giving regulated financial advice would exercise in the same circumstances. The code committee may regulate its own procedure. any other licensing authority identified in Schedule 2: provides a financial service to persons in New Zealand as referred to in section 7A(1)(a); or. This clause applies to an individual (A)—, who, immediately before the commencement of this clause, is a QFE adviser (within the meaning of the Financial Advisers Act 2008); and, who, after the commencement of this clause, has become a financial adviser; and. Section 2(2): section 95 and Schedule 3 (except clause 3(1)(b) and (c) of new Schedule 1AA) brought into force, on 26 November 2019, by clause 2 of the Financial Services Legislation Amendment Act Commencement Order (No 2) 2019 (LI 2019/283). A person does not give financial advice merely by doing 1 or more of the following: providing factual information (for example, information about the cost or terms and conditions of a financial advice product, or about the procedure for acquiring or disposing of a financial advice product): carrying out an instruction from a person to acquire or dispose of, or not to acquire or dispose of, a financial advice product for that person: making a recommendation or giving an opinion about a kind of financial advice product in general rather than a particular financial advice product (for example, an opinion about shares generally rather than shares of a particular company): recommending that a person obtain financial advice: passing on financial advice given by another person (unless the person holds out that the financial advice is the person’s own advice): giving or making available any of the following: an advertisement referred to in section 89: any other document or information that the person is required by law to give or make available: a document or information prescribed by the regulations: Financial advice is not regulated financial advice if it is given by an incorporated law firm (as defined in section 6 of the Lawyers and Conveyancers Act 2006)—, in the ordinary course of its business; and. Emergency Services Legislation Amendment (Finance) Bill 2009 Passed by both Houses 1 Name of Act 2 2 Commencement 2 Schedule 1 Amendment of emergency services legislation 3 . otherwise provide information to a prescribed person in the prescribed manner if required to do so by regulations made under this Act. an application for the renewal of A’s authorisation or QFE status is made before the commencement of this clause but is declined by the FMA after that commencement. This comes after industry and public consultation on an Issues Paper and Options Paper released by the Ministry of Innovation, Business, and Employment in 2015. In section 4, repeal the definitions of broker, broking service, and financial adviser service. Despite the change referred to in subclause (1)(c), the person does not breach section 11, 12, or 17 because of that change (and, for that purpose, the person may continue to rely on section 5 as in force before the commencement of section 63 of the Financial Services Legislation Amendment Act 2019). Reprints are presumed to correctly state, as at the date of the reprint, the law enacted by the principal enactment and by any amendments to that enactment. 2 Commencement (1) Each provision of this Act specified in column 1 of the table commences, or is taken to have commenced, in accordance with column 2 of the table. The Financial Services Legislation Amendment Act introduces a new regulatory regime for financial advice. relevant insurance contract has the same meaning as in section 9B(1) of the CCCF Act. A client money or property service is not a regulated client money or property service if it is given in prescribed circumstances. Get notifications. the trustees apply for the approval to be withdrawn and the FMA is satisfied that the prescribed criteria and requirements (if any) are satisfied. In this clause and clause 83, category 1 product, category 2 product, class service, personalised service, QFE, and QFE group have the same meanings as in section 5 of the Financial Advisers Act 2008 as in force before its repeal. In Schedule 2, replace paragraph (b) with: In Schedule 2, replace the item relating to the Financial Advisers Act 2008 with: The Financial Advisers Act 2008 (2008 No 91) is repealed. the nomination of the same individual as a nominated representative of 2 or more providers is authorised by conditions on the providers’ licences and those conditions are related to an arrangement referred to in section 403(4)(b)(ii). A person who gives regulated financial advice to a client must make the prescribed information available in the prescribed manner when required to do so by the regulations. In Schedule 1, after clause 41(2), insert: In relation to the supply of a financial advice service or a client money or property service (or a class of those services), A must certify that A has previous experience in acquiring or disposing of financial advice products that allows A to assess—, the merits of the service or services to be provided (including assessing their value and the risks involved); and, A’s own information needs in relation to the service or services; and. 24 Dec 2020. This clause ceases to apply on the close of the date that is 2 years after the commencement of section 16 of the Financial Services Legislation Amendment Act 2019. immediately before the commencement of this clause, A is an authorised financial adviser or has QFE status (within the meaning of the Financial Advisers Act 2008); but. The following apply for the purposes of subsection (1)(a): the paragraph does not apply merely because A’s financial services are accessible by persons in New Zealand: does not have a place of business in New Zealand; and. A may not be deregistered in respect of the financial advice service under section 18(1)(b) on the basis that A is no longer required to be registered under section 11; and, section 18(1)(b) applies to A in respect of that service only if—, A is treated as being no longer in the business of providing a financial advice service under section 22D; or, A does not comply with section 28(1) by the due date (see section 28(3)); or, For the purposes of Part 3, A must be treated as providing a financial advice service to a client (C) if—, A is engaged by a financial advice provider to give regulated financial advice on the provider’s behalf; and. The chairperson may, without resigning as a member of the code committee, resign from that office by notice in writing to the Minister. Other provisions relating to financial advice services and client money or property services: 16: Section 388 amended (When provider of market services needs to be licensed) 17: Section 389 amended (Exemptions from need for market services licence) 18: Section 392 repealed (Meaning of discretionary investment management service and related terms) 19 The new regime was developed following our review of the Financial Advisers Act 2008 and the Financial Service Providers (Registration and Dispute Resolution) Act 2008. 7. Amendment of the Financial Services and Markets Act 2000 (Benchmarks) Regulations 2018. acting as a provider of a financial advice service (see section 431D): A person is exempt from the licensing requirement under section 388(ba) in respect of a service (unless a declaration applies under subpart 3 of Part 9) to the extent that—, the service is not provided to any retail clients; or. A provider must ensure that the client money and client property are held separate from money or property held by or for the provider, or other person referred to in subsection (1)(b)(i) or (ii), on its own account. In subsection (2), other relevant legislation means any of the following: the Credit Contracts and Consumer Finance Act 2003. the licensee or an authorised body does not meet, or no longer meets, the requirements referred to in section 396(a) to (f) or 400(1)(a) to (e) or (1A)(a) to (e) (where those provisions are applied with all necessary modifications as if references to the applicant or body corporate (or entity) were references to the licensee or authorised body respectively). This section does not limit the application of those sections to a DIMS licensee or a custodian as a provider of a client money or property service. the entity meets the eligibility criteria and other requirements prescribed by the regulations for the purposes of this clause (if any). The Minister must consult the FMA before exercising a power under clauses 34 to 36. Amendment. A service provider may provide a financial advice service to a number of clients. The disciplinary committee must serve a written notice of the complaint on a financial adviser if—, the FMA refers a complaint about the financial adviser to the disciplinary committee; and. The Minister must appoint one of the members of the disciplinary committee as the chairperson of the disciplinary committee. Extension of scope of regulation. In section 157(2), replace “an authorised financial adviser under the Financial Advisers Act 2008” with “a financial advice provider under the Financial Markets Conduct Act 2013”. In preparing the draft code, the code committee must—, the main and additional purposes of this Act specified in sections 3 and 4 and the additional purpose set out in section 431B; and, New Zealand’s international obligations that are relevant to financial markets or financial advice services; and, prepare an impact analysis document that describes how the proposed standards may contribute to, or detract from, the matters referred to in paragraph (a) (including a description of any trade-offs between those impacts); and, consult any persons that it reasonably considers to be representative of the financial advice industry; and, consult any persons that it reasonably considers to be representative of consumers of financial advice; and. In the case of a licence relating to a financial advice service, a condition referred to in subsection (1) may also—. SUBSIDIARY LEGISLATION 2020/046. In section 469, insert as subsection (2): If the FMA is satisfied that the relevant person (A) is a financial adviser who, by engaging in any conduct, has contravened, or is likely to contravene, any of sections 431I to 431P, a direction order may do 1 or more of the following (whether or not in addition to an order under subsection (1)): direct the Registrar to deregister A under the Financial Service Providers (Registration and Dispute Resolution) Act 2008 (the FSP Act): prevent A for a specified period from being reregistered for a financial advice service under the FSP Act: direct the Registrar to suspend A’s registration under the FSP Act for a period of no more than 12 months or until A meets specified conditions relating to the registration (but, in any case, not for a period of more than 12 months). subclause (6) ceases to apply on the specified date unless A, before the specified date, has sent a written notice that discloses the scope of the investment authority to C at C’s last known address, including the matters referred to in section 437(2)(a) to (c); and. 11.02 ; Financial Services Commission (Amendment) Act 2013; Miscellaneous Amendments (Financial Services) Act 2013; Regulated Entities Banking and Trusts. A financial advice provider or an interposed person must not allow a person engaged by the provider or person to give advice in contravention of subsection (1). ABC must (if required by the regulations) provide information to C when the service is first provided (for example, about fees, material interests, relationships and associations, the type of advice, dispute resolution arrangements, and other matters relevant to the performance of the service). In Schedule 4, clause 20(2A), replace “451(a)” with “451(1)(a)”. The FMA must not exercise a power under clause 2(1)(b)(i) to (iii), or refuse an application for approval to be withdrawn, unless—. In Schedule 3, replace clause 2(b)(iii) with: the trustees have contravened the trust deed; or. However, under the conditions of ABC’s market service licence, the type of service that Susan gives may not be given by a nominated representative. the date that is 2 years after the commencement of this clause. Financial Services (Credit Institutions and Capital Requirements) (Amendment) Regulations 2020. Appointed representatives. The Financial Services and Markets Act 2000. A provider must, when providing a regulated client money or property service, exercise the care, diligence, and skill that a prudent person engaged in the business of providing the service would exercise in the same circumstances. Compare: 2008 No 91 ss 13(1), 14(1)(a), (d), (i), it is given in connection with providing credit under a credit contract; and. The legislation introduces a new regulatory regime for financial advice. Income Tax Act 2007. The chairperson of the disciplinary committee has a deliberative vote and, in the case of an equality of votes, a casting vote. that would otherwise be regulated financial advice is not regulated financial advice: that would not otherwise be a financial advice service is a financial advice service; or. If Schedule 5 requires the code or any other information to be published on an Internet site maintained by or on behalf of the code committee, the code or information may instead, before the commencement of that schedule, be published on an Internet site maintained by or on behalf of the department of State that is responsible for the administration of this Act. The Minister must ensure that the code comes into force no later than the date on which subpart 5A of Part 6 comes into force. Summary: From 15 March 2021, a new regime for the regulation of financial advice will come into effect as a result of amendments made to the Financial Markets Conduct Act 2013 by the Financial Services Legislation Amendment Act 2019 (FSLAA) and the repeal of the Financial Advisers Act 2008.As a consequence, certain terminology relating to financial advisers will change. the quality of financial advice and financial advice services. A client money or property service is not a regulated client money or property service if it is given in the ordinary course of the business of one of the following: the holder of, or a person performing the duties of, an office established by an enactment: gives the service in the ordinary course of carrying on that occupation, or exercising the powers or performing the functions of that office or position. In Schedule 1, clause 42(2)(a) and (b), replace “authorised financial adviser” with “financial adviser”. It amends the Financial Markets Conduct Act and also makes changes to the registration requirements for the Financial Service Providers Register. notify, under section 17, changes relating to a financial service provider that are connected with section 5(1)(a) or 22C being replaced or inserted by section 63 or 81 of the Financial Services Legislation Amendment Act 2019, before those provisions come into force. The Corporations Legislation Amendment (Financial Services Modernisation) Bill 2009 (Bill) contains proposed measures on: • Margin lending: Margin loans are to be included as financial products for the purposes of Chapter 7 in the Corporations Act. The Parliament of New Zealand enacts as follows: This Act is the Financial Services Legislation Amendment Act 2019. Corporations Legislation Amendment (Financial Services Modernisation) Act 2009 No. 2. The relevant time, for the purposes of applying Schedule 1 under subclause (1), is the time immediately before the service is supplied to the person. This section applies to a person even if this Act would otherwise not apply to the person under section 7A. provider means a provider of client money or property services. Some apply to retail clients only, and others apply to both retail and wholesale clients. The Financial Services Legislation Amendment Act introduces changes to ensure the conduct and client-care obligations of financial service providers and the regulation of financial markets remain fit for purpose. 9. A may be required to produce a document relating to ABC Limited’s business or to confirm information provided by ABC Limited. Section 29: amended, on 31 July 2019, by section 182 of the Trusts Act 2019 (2019 No 38). This clause does not limit clauses 26(1)(b), (2), and (4) and 28(2) and (3) of Schedule 5. amending Act means the Financial Services Reform (Consequential Amendments) Act 2002 . any other appropriate knowledge, skills, and experience that will assist the code committee to perform its functions. About Us. Neither the provider nor any interposed person may give, or offer to give, to any of its nominated representatives any kind of payment or other incentive that is intended to encourage, or is likely to have the effect of encouraging, a nominated representative to engage in conduct that contravenes any duty under sections 431I to 431P. a nominated representative (within the meaning of section 6(1) of the Financial Markets Conduct Act 2013) while acting in that capacity on behalf of the financial advice provider that nominated the person: This Act applies to every person (A) who is in the business of providing a financial service if—, A’s financial services are provided to persons in New Zealand by or on behalf of A; or, A is, or is required to be, a licensed provider under a licensing enactment; or, A is required to be registered under this Act by or under any other enactment (including under a licence condition); or, A provides the service in the prescribed circumstances; or.

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