New Zealand to remove expiry dates on Financial Markets Conduct Act licences
Current licence holders will not have to apply to be relicensed before the expiry date of their licence.
New Zealand’s Financial Markets Authority (FMA) has earlier today announced that it will remove the expiry dates for all licences issued under the Financial Markets Conduct Act 2013. The process is expected to be finalized by the middle of 2019.
Open-ended terms will apply to all new and existing licences, unless an expiry date is specified on a case by case basis. Current licence holders will not have to apply to be relicensed before the expiry date of their licence.
A notice of variation has today been sent to all holders of existing licences.
The FMA originally imposed on a 5-year term on all licences as part of a conservative approach to ensure it had the opportunity to reassess licence holders. The regulator has since revised this approach following the development of its risk monitoring framework.
A targeted consultation on the proposal took place at the end of 2018. The FMA does not believe that the costs associated with re-licensing would be matched by the benefits gained.
The regulator notes that relicensing imposes significant direct and indirect costs on all market participants, regardless of the risk they pose to fair, efficient and transparent markets.
The FMA notes that it will continue to prioritise its monitoring, intelligence gathering and supervision activities to those areas it considers to pose the most significant risk and harm. The change does not remove any of the regulatory tools at the FMA’s disposal and the FMA will take appropriate action if a licensee fails to meet their licence conditions or legal obligations.
The purpose of the FMC Act is to promote and facilitate the development of fair, efficient and transparent financial markets, and to promote the confident and informed participation of businesses, investors and consumers.
The FMC Act works to reform the regulation of financial conduct. It governs the way financial products are offered, promoted, issued and sold. This includes the on-going responsibilities of those who offer, issue, manage, supervise, deal in and trade financial products. The FMC Act also regulates the provision of certain financial services.
