Cabinet approves financial advice regulations

Commerce Minister Simon Power says Cabinet has approved regulations which set out the details of disclosure statements required under the Financial Advisers Act 2008.

"These regulations are another important step in the Government's work programme to improve investor confidence in our financial markets, after the global financial crisis and the collapse of finance companies," Mr Power said.

The regulations provide details on the form and content of disclosure statements which all financial advisers will have to provide to customers from 1 July next year, when the Financial Advisers Act and the Financial Service Providers Act will be fully in force.

The disclosure regulations will be available shortly at www.legislation.govt.nz.

The Acts require all financial service providers, including financial advisers, to be listed on a public register and, if they provide services to the public, be members of an approved dispute resolution scheme.

Financial advisers will also be subject to a Code of Professional Conduct which establishes 18 standards to ensure they meet the minimum standards for ethical behaviour, client care, knowledge, skills and competence, and continuing professional development.

Mr Power said Cabinet has also agreed that further regulations be drafted to set:

•·         Definitions of key products under the Financial Advisers Act.

•·         Exemptions from the Financial Advisers Act and the Financial Service Providers Act.

•·         Fees that the Securities Commission may charge for considering exemption requests.

"These regulations will minimise unnecessary compliance costs, give certainty to the market, and make it easier for the Securities Commission to consider exemptions efficiently."

Mr Power reminded financial service providers that they must be registered and belong to a dispute resolution scheme by 1 December.

Meanwhile, financial advisers who are working under a qualifying financial entity or whose qualifying financial entity is still awaiting approval have until 31 March next year to register.

The Acts come fully into force on 1 July next year and all financial advisers who need authorisation from the Securities Commission must have completed their training and finalised their authorisation by this date.

"It's important that all financial service providers get moving now to make sure they can meet these deadlines."