Contributed by: Bridgette White, Sarah McQueen, Emmeline Rushbrook and Dan Jones
Published on: November 10, 2020
The Financial Markets Authority (FMA) has released the standard conditions for full financial advice provider (FAP) licences.
The final standard conditions are broadly consistent with the proposed standard conditions set out in the consultation document (discussed here). The standard conditions for a full licence include:
The most notable change is the removal of proposed standard condition 5 (professional indemnity insurance) which would have required a licence holder to have and maintain a level and scope of professional indemnity insurance that is adequate and appropriate for the provision of its financial advice service to retail clients in New Zealand. The FMA considered the industry's feedback regarding the costs of professional indemnity insurance to FAPs, likely benefits for consumers and availability of cover and chose not to include it as a standard condition. Instead, an individual FAP should make its own decision regarding professional indemnity insurance based on its own particular circumstances.
Other changes include:
FAPs can expect the process for full licensing will be conducted online and more comprehensive than transitional licensing.
These conditions will be effective from the date a FAP's full licence takes effect. All FAPs must have obtained a full licence by 15 March 2023.
Please let us know if you would like to discuss the standard conditions to full FAP licences or the new financial adviser regime more generally.
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