The Ministry of Business, Innovation and Employment (MBIE) is consulting on outstanding aspects of the upcoming regime governing conduct in the financial sector.

“We are consulting on regulations covering matters such as requirements for claims handling and complaints processes, and prohibitions of certain types of sales incentives,” says James Hartley, General Manager, Commerce, Consumers and Communications.

“This will include, for example, banning sales targets for frontline staff at banks. We are also looking into the treatment of intermediaries – for example, brokers selling insurance on behalf of an insurer. The outcome of the consultation will inform the development of the Financial Markets (Conduct of Institutions) Amendment Bill. This Bill includes new measures for holding New Zealand financial institutions to account and putting consumers at the heart of what they do.”

In 2018 and 2019, reviews in New Zealand and Australia raised concerns regarding the conduct of banks and insurers. The reviews identified gaps in New Zealand’s financial markets regulatory system.

“The Bill will require banks, insurers, and non-bank deposit takers to be licensed by the Financial Markets Authority in relation to their general conduct towards consumers. Licensing gives consumers confidence that licensed entities are subject to a greater degree of monitoring and supervision and meet the appropriate standards of conduct,” Mr Hartley says.

MBIE is seeking feedback on two discussion documents:

https://www.mbie.govt.nz/have-your-say/conduct-of-financial-institutions-regulations

https://www.mbie.govt.nz/have-your-say/conduct-of-financial-institutions-treatment-of-intermediaries

Submissions close on Friday 4 June at 5pm.

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