Hon Simon Power
Minister of Commerce

Financial advisers disciplinary committee established

Commerce Minister Simon Power today announced the establishment of a committee to conduct disciplinary proceedings arising out of complaints against authorised financial advisers.

“The aim of the Financial Advisers Act is to build confidence in the professionalism and integrity of financial advisers,” Mr Power said.

“A key part of that is making financial advisers accountable for the advice they give.”

The new regime does not come fully into force until 1 July next year, but advisers who become authorised before then will be subject to all their obligations from the date they become authorised.

The Disciplinary Committee will be chaired by the Commissioner for Financial Advisers, David Mayhew. He will be joined by committee members Tracey Berry, Simon Hassan, Peter Houghton, and Sir Bruce Robertson.

Mr Power said another recent step in the implementation of the new financial services regime has been the finalisation of exemptions from the Financial Service Providers Act.

“These exemptions address a number of technical issues with the legislation and will help minimise compliance costs.”

One key exemption is for ‘sole adviser practices’ – those financial advisers working through their own closely-held company. They will have to register on the new Financial Service Providers Register in their own name, but they will not have to register their company as well, minimising registration fees. Membership of an approved consumer dispute resolution scheme is still compulsory for the company.

Further information on registration for sole adviser practices can be found on the Financial Service Providers Register website www.fspr.govt.nz

Mr Power also reminded all financial service providers, including many issuers and trustees, that they must be registered and belong to a dispute resolution scheme by 1 December.
Meanwhile, financial advisers who are working under a qualifying financial entity or whose qualifying financial entity is still awaiting approval have until 31 March next year to register.
“The new regime is an important part of the Government’s work to rebuild investor confidence in our financial markets, and financial advisers need to play their part in that.”

The Securities Commission has also recommended that advisers wishing to apply for authorisation aim for the 31 March date, in order to ensure there is sufficient time for their application to be processed before the Act comes fully into force on 1 July
More information about the new regime and how to register can be found at www.fspr.govt.nz, or by calling the Companies Office.
Background on the Disciplinary Committee

The Committee has 4-6 members, including the chairperson – who must be the Commissioner for Financial Advisers. The membership must include at least 1 member who works or has worked in the financial adviser industry, at least 1 member who is independent of the financial adviser industry, and at least 1 member who is a lawyer with no less than seven years legal experience.

The role of the committee is to:
• Conduct disciplinary proceedings arising out of complaints regarding authorised financial advisers referred to it by the Securities Commission.
• Take any actions required as a result of the disciplinary proceedings.

Background on Disciplinary Committee Members

David Mayhew is the Commissioner for Financial Advisers, and a member of the Securities Commission. He previously was a partner in London law firms Clifford Chance and Herbert Smith, and sat as a part-time judge for criminal jury trials in the English Crown Court. He also worked with the UK’s Financial Services Authority, first as Leading Advocate and subsequently as acting Director of Enforcement.

Tracey Berry is General Manager, Wealth, at Kiwibank with more than 17 years’ experience in the financial sector, including in regulation, risk, compliance, and governance. Prior to Kiwibank she had various roles with Westpac, Bank of New Zealand, and Public Trust. She won the Central Region NZIM/Eagle Technology Young Executive of the Year award in 2009.

Simon Hassan is a financial adviser and member of the international Financial Planning Standards Board (FPSB) Standards Committee. The FPSB develops and promotes professional financial advice standards and fosters financial advice education in 23 countries. He was a director of the Institute of Financial Advisers for nine years, serving for two years as president and board chair.

Peter Houghton recently moved to New Zealand from the United Kingdom where he spent 19 years in the investment banking industry. The majority of his career has focused on providing investment research to fund managers globally. His last role was Global Head of Investment Research at Dresdner Kleinwort Investment Banking in the UK, prior to which he had a number of positions with J.P. Morgan.

Hon Sir Bruce Robertson is a recently retired judge of the New Zealand Court of Appeal. He was President of the New Zealand Law Commission from 2001 to 2005. He was a lawyer in Dunedin for 20 years prior to his appointment to the High Court in Auckland in 1987. He has been a member of the Legislation Advisory Committee since its inception in 1985.

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