Common issues, hints for new applicants and a guide to the Financial Markets Authority’s (FMA) future focus are included in a review of the regulator’s first two and a half years of licensing.
The Financial Markets Conduct Act 2013 (FMC Act) introduced a system of licensing and monitoring for the first time for many companies involved in New Zealand’s financial markets. By December 2016, the transition to the new system was complete.
The FMA received a total of 253 licence applications under the FMC Act. In all, 201 licences were granted prior to 1 Dec 2016.
Many businesses provided well-considered applications, demonstrating they understood their on-going obligations and the new eligibility criteria, adjusting their businesses to get a licence.
Issues uncovered during licensing included a lack of understanding of the new regulatory requirements, a lack of formalised processes and some off-shore companies seeking a licence who didn’t have genuine business activities in New Zealand.
The FMA also adjusted its processes as it gained experience, engaging more frequently with applicants and holding face-to-face meetings earlier. The FMA has adopted a flexible approach to assist different types of business models as they seek to meet the criteria for a licence.
Liam Mason, FMA Director of Regulation said: “Licensing must be a challenge so New Zealanders can be sure licensed firms meet the standards set by law. However, the process to get a licence should be as straightforward as possible and we have learned valuable lessons.
Our aim is to foster and encourage the collaborative relationships we have built with licensed companies through our monitoring and supervision work.”