Hon Simon Power
Minister of Commerce

28 May 2009
Additional $11.7m for financial adviser watchdog

An additional $11.7 million has been allocated to further strengthen New Zealand's financial regulations over the next four years.

“The implementation of the Financial Advisers Act and the Financial Service Providers Act will help restore confidence in the financial markets by introducing a minimum standard of competence for financial advisers,” Commerce Minister Simon Power says. “It will also place the supervision of financial advisers with a central regulatory body, the Securities Commission.”

The new regime will contribute to the Government’s economic priorities by promoting the sound and efficient delivery of financial advice, and encouraging public confidence in the professionalism and integrity of financial advisers.

As the new central regulatory body for financial advisers, the Securities Commission will be responsible for:

• Assessing individual advisers seeking authorisation and entities seeking approval.

• Investigating complaints relating to financial advisers.

• Providing administrative support to the Code Committee and the Disciplinary Committee.

• Funding and supporting the Commissioner for Financial Advisers.

• Sharing information with the Companies Office, the holder of the Financial Service Providers Register, to ensure advisers are registered and have their authorisation status correctly reflected on the FSP public register.

• This will enable the Securities Commission to take on additional functions as required under the Financial Advisers Act.

The Securities Commission will receive a boost to its budget of $2 million in 2009/10, $4 million in 2010/11 and $2.9 million in each of 2011/12 and 2012/13. This will bring the total available expenditure on the new financial advisers’ regime in these years to $3.4 million, $5.4 million, and $4.3 million respectively.

Mr Power will keep funding requirements under review, but expects the regime to be fully funded through industry fees and levies from 2011/12. This timetable coincides with the implementation of the regime, which is expected to be completed by the end of 2010.

These increases to funding are through fees. An independent fees review of the Securities Commission, including consideration of fees for the financial advisers' regime, is under way.

ENDS

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