This is the fifteenth message from the Financial Services Council about future changes coming to financial advice regulation. The FSC’s goal is to highlight key things you need to know about the Financial Services Legislation Amendment Act (FSLAA), its regulations and the Code of Conduct for Financial Advice. For more information, visit navigatingregulation.co.nz
The Ministry of Business, Innovation and Employment released draft disclosure regulations on 10 October. You have until 8 November to submit opinions and corrections. We encourage you to have your say.
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Purpose of consultation |
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About the Exposure Draft |
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Key changes to be aware of |
Proposed amendments to the Financial Markets Conduct Regulations 2014 include:
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Key elements of the draft disclosure regulations |
Proposed amendments to the Financial Markets Conduct Regulations 2014 would mean four stages of disclosure would apply to anyone giving financial advice:
Other general requirements would apply, too (e.g. keeping records of disclosures given and ensuring disclosures are clear and concise). |
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Commencement |
The new financial advice regime commences in June 2020. This consultation asks providers to consider the requirements and whether they think transitional provisions may be required (refer paragraph 23 of the discussion paper). |
To read a summary of our latest knowledge about the regime, refer to the Financial Services Council Advice Hub or read the draft disclosure regulations on the MBIE website.
You will have to disclose the amount or value (or how it would be determined). You will need to disclose the commission that is paid to you-as the financial adviser, the FAP or another person connected with the giving of the advice if it is likely to influence the advice given by the adviser. Refer to Schedule 21A clause 2(3).
No, there is no specified format for disclosure, except that it must be available to customers in writing, and it must be clear, concise and effective. See regulation 229G in the draft regulations.
Yes, it is possible to disclose verbally. The financial advice provider must provide a hard copy or electronic copy if the client requests one.
The draft regulations do not specify additional disclosure requirements for replacement business (but these may be necessary to meet the requirements of the Code of Conduct).
Yes. If the client received the relevant information within the last 12 months, it does not need to be provided again unless the client requests it (regulations 229D(7) and 229E(5) in the draft regulations). However, the client must be informed of any material changes.
The draft regulations apply to financial advice given to retail clients. They do not include financial advice given to wholesale clients.
For more information see the disclosure regulations on the MBIE website.
Please feel free to email any questions about the Code, FSLAA or this message to fsc@fsc.org.nz.
The FSC Navigating Regulation Hub is available here where you can find up to date information about FSLAA, including video from the Navigating Regulation Advice Summits held in February 2019.
Visit the FSC Navigating Regulation Hub
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