FMA Finalises Regulatory Return Questionnaire For Licensed Financial Advice Providers

Following consultation on the proposed standard licence conditions for all classes of Financial Advice Providers (FAPs), the Financial Markets Authority (FMA) – Te Mana Tātai Hokohoko – today confirmed the information FAPs must provide in their regulatory returns. This information will set the focus for FMA’s risk-based monitoring approach and is necessary to effectively supervise full FAP licence holders, in line with licence Standard Condition 3.

The FMA will use the information to monitor licence holders’ ongoing capability to effectively perform the financial advice service according to the applicable eligibility criteria, and other requirements in the FMC Act, including annually updated information on the nature, size and complexity of the FAP service.

The FMA carefully considered industry feedback and has proceeded with a balanced reporting option that includes fewer questions than proposed, as well as refinements to some questions. Some of the proposed questions have been withdrawn as they are better suited for future one-off requests or thematic reviews.

A dynamic reporting form will be introduced, where FAPs only need to answer questions relevant to their licence class and the financial advice services they provide. Where applicable, questions will be pre-populated with data already on file (e.g. data from previous year or other regulatory returns), so the FAPs will only be required to confirm its accuracy.

The published reporting requirements are tailored to the three different classes of licences, reflecting the different business models within the financial advice sector. The FMA remains committed to an approach that does not treat regulation as a ‘one size-fits-all’ compliance exercise.

Clare Bolingford, Executive Director for Regulatory Delivery, said: “The balanced regulatory reporting returns will allow us to implement a more effective, risk-based approach to monitoring Financial Advice Provider businesses. Overall, these regulatory returns support our supervision approach, so we can target our resources efficiently to identify those areas of highest potential risk of harming consumers.

“We will take a reasonable approach while the market implements information-gathering processes and systems. We will engage with the sector to provide guidance and expectations for completing the first regulatory returns leading up to the reporting commencement date in July. We expect that in subsequent years, FAPs will provide increasingly more accurate answers as their processes mature.”

The first regulatory returns will be due by 30 September 2024, for the reporting period starting from 1 July 2023 to 30 June 2024. FAPs must complete a regulatory return annually for the period 1 July to 30 June, and submit it to the FMA by 30 September online via our website.

Download the Regulatory Impact Statement

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