Celebrating 25 Years of Scoop
Special: Up To 25% Off Scoop Pro Learn More

Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


FMA to step up enforcement of financial services register

FMA to step up enforcement of financial services provider register

By Paul McBeth

Sept. 22 (BusinessDesk) - The Financial Markets Authority is stepping up its enforcement of people misusing the financial services provider register, which continues to generate the most complaints to the market watchdog.

The regulator has been cracking down on the FSPR in recent years, kicking off firms that signed up to it even though they weren't providing services in New Zealand. The issue for the FMA is that being on the register has been touted as akin to a licensing regime by some foreign firms, even though it isn't.

Over the past three years, the FMA has received 1,080 complaints about 296 different companies or people relating to the FSPR, almost half of which were in the first year, a report on the register shows. Of 115 registrations that were reviewed, 69 firms were deregistered by the FMA and another 21 quit of their own accord, while of the 93 applications for registration referred to the regulator, just 19 were allowed to proceed.

Director of regulation Liam Mason told BusinessDesk that last year there was a "real increase in companies voluntarily de-registering" and that the firms still in its sights were better prepared and advised, meaning the watchdog was taking more time. The watchdog is now going to pursue misuse of the register more aggressively, targeting New Zealand directors who provide little or no governance to the entities their legally responsible for.

"When they've got numerous other roles, at best, they're going to be providing administrative service and one of the things we're wanting to signal here is there are some very specific duties under the Companies Act, being a director carries serious responsibilities and criminal liabilities in some cases," Mason said. "This is a fair warning that when we see a company that's abusing the FSPR and its directors and we're able to take a look at those directors, then we'll be taking those seriously."

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

Mason said the FMA is also publishing consumer resources online about the FSPR in other languages where the regulator knows there has been misuse of the register. Those languages are Chinese, Malay and Arabic, which were chosen because that's where the most number of complaints came from.

The government plans to require firms on the register have a greater connection to New Zealand, with legislation tabled in Parliament last month.



© Scoop Media

Advertisement - scroll to continue reading
Business Headlines | Sci-Tech Headlines


Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.