Conduct of financial institutions treatment of intermediaries

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Submissions due: 04 June 2021, 5pm

MBIE is seeking submissions on possible amendments to the Financial Markets (Conduct of Institutions) Amendment Bill regarding the treatment of intermediaries of financial institutions.

The feedback from this consultation will be used to advise the Government whether amendments should be made to the Bill via Supplementary Order Paper at Committee of the Whole House stage later in 2021.

About the consultation

The Financial Markets (Conduct of Institutions) Amendment Bill(external link) (the Bill) places requirements on financial institutions (banks, insurers and non-bank deposit takers) to oversee and train any intermediaries distributing or managing their products (e.g. mortgage or insurance brokers) to ensure good outcomes for consumers.

Stakeholders have raised concerns about these oversight and training requirements. They have also raised concerns about the overlap with the obligations that apply to some intermediaries under the new financial advice regime – the Financial Services Legislation Amendment Act (FSLAA).

Stakeholders’ concerns have centred around the breadth and scope of the definitions and obligations, and the potential cost and burden of compliance.

In light of these concerns, MBIE is seeking submissions on which intermediaries should be covered by the Bill, and the extent to which they should be covered.

What we are seeking feedback on

This discussion document seeks feedback on options to amend the Bill to address the concerns raised, particularly:

  • The definition of intermediary
  • The obligations for intermediaries
  • The obligations for employees and agents

Feedback on these proposals will inform officials’ advice to the Minister of Commerce and Consumer Affairs to enable policy decisions. These decisions will cover whether amendments to the Bill are necessary and, if so, the nature of these amendments.

Below are the documents to read and the template for you to complete if you would like to share your views with us:

Alongside this discussion document on regulations, we are also consulting on the regulations to support the Bill.

Conduct of financial institutions regulations consultation

Release of information

MBIE intends to upload copies of submissions received to MBIE’s website at www.mbie.govt.nz. MBIE will consider you to have consented to uploading by making a submission, unless you clearly specify otherwise in your submission.

If your submission contains any information that is confidential or you otherwise wish us not to publish, please indicate this on the front of the submission, with any confidential information clearly marked within the text.

Submissions remain subject to request under the Official Information Act 1982. Please set out clearly in the cover letter or e-mail accompanying your submission if you have any objection to the release of any information in the submission, and in particular, which parts you consider should be withheld, together with the reasons for withholding the information.

MBIE will take such objections into account and will consult with submitters when responding to requests under the Official Information Act 1982.

Private information

The Privacy Act 2020 establishes certain principles with respect to the collection, use and disclosure of information about individuals by various agencies, including MBIE.

Any personal information you supply to MBIE in the course of making a submission will only be used for the purpose of assisting in the development of policy advice in relation to this review.

Please clearly indicate in the cover letter or e-mail accompanying your submission if you do not wish your name, or any other personal information, to be included in any summary of submissions that MBIE may publish.

How to make a submission

MBIE is seeking submissions from industry and the public on the options and proposals in the discussion document by 5pm on Friday 4 June.

The questions posed throughout the discussion document can be used to guide submissions.

You can make your submission:

  • By filling in the submission template and sending your submission as a Microsoft Word document to: financialconduct@mbie.govt.nz
  • By mailing your submission to:
    Financial Conduct
    Financial Markets Team
    Ministry of Business, Innovation and Employment
    PO Box 1473
    Wellington
    6140
    New Zealand

If you have any questions about the submissions process, please direct these to financialconduct@mbie.govt.nz.

Last updated: 21 April 2021