Entities that have recently applied for registration on the New Zealand Financial Services Provider Register (FSPR) will be aware of the lengthy process that this has become. This is largely due to the growing concerns of New Zealand regulators, including the Financial Markets Authority (FMA), of the caliber of businesses providing financial services in New Zealand and the volume of applicants who have no intention at all of operating in New Zealand but are simply seeking registration somewhere.
Throughout the registration process, the FSPR is likely to raise the issue of additional licensing. Additional licensing may be required depending on the type of financial services the entity is seeking to provide in New Zealand. For instance, if you are a derivatives issuer providing services in or from New Zealand, you will need to apply to be listed on the FSPR and also obtain a Derivatives Issuer Licence from the FMA. These applications should be completed simultaneously to ensure the FSPR registration is processed quickly.
The FSPR appears to be pushing for entities to be licensed under the new FMA licensing regime with the question of additional licensing being raised in the registration process regardless of whether the business provides financial services that require licensing through the FMA. We have seen FSPR applications sent to the FMA for final review, often taking months before receiving a response and further extending the registration process for what is often a very simple business model that should require no additional licensing.
The New Zealand Ministry of Business, Innovation, and Employment (MBIE) has published a paper entitled ‘Options Paper: Review of the Financial Advisers Act 2008 and Financial Service Providers (Registration and Dispute Resolution) Act 2008’ which deals with so-called misuse of the FSPR. This paper comes after the FMA voiced their concerns regarding similar issues. The paper provides a range of alternatives to change the FSPR laws.