Annex 1: Assumptions

Assumptions used in this paper

42. Current analysis of the total population of prudentially registered or licensed banks, insurers and NBDTs shows that if there were no authorised body applications, the FMA could expect to receive between approximately 92 and 109 licence applications. The population that falls within the scope of the CoFI regime is not fully settled and will depend, for example, on legal analysis by institutions of whether they are providing relevant services to consumers that are covered by the CoFI Act. Based on current information, we have used a mid-range value of 100 as an estimate for the total number of financial institutions that will apply for a licence (including authorised bodies).

43. As noted above at paragraph 24, some financial institutions may apply for licences that cover other related bodies corporate as “authorised bodies”. It is likely that there will only be a small group of financial institutions that are in this situation. The FMA have estimated potentially 14 entities with one or more related financial institutions that may seek to include those entities on their licence as an authorised body.

44. The FMA has estimated it will take on average 5.75 hours to assess a financial institution licence application. Within this timeframe, the FMA is assuming some manual intervention by FMA staff will take place. Multiplying 5.75 by the $178.25 hourly rate set out in the Fees Regulations gives a total licensing fee of $1,024.93.

45. The FMA has assumed that there may be overlap in documents provided for applications from financial institution and their authorised bodies. Therefore, a discounted rate of 60 per cent will be applied to the application fee for an authorised body application.


4. Do you have any comments on the assumptions used in this paper as outlined above?

Monitoring and evaluation

46. MBIE has ongoing regulatory stewardship obligations and will work with the FMA to monitor the effectiveness of the new CoFI regime.

47. In relation to the licence fee and other levies, MBIE will monitor the impact of the new regulatory regime on the FMA’s resourcing and the sector. MBIE will also monitor whether any significant under- or over-recovery is occurring. The licensing fees discussed in this paper will be reviewed periodically and in light of MBIE’s monitoring activities to ensure they are fit for purpose.