Consultation on 2021 Financial Markets Authority funding and levy

About the consultation

The FMA’s funding and the FMA levy were last reviewed in 2019/2020. Since then, the FMA’s remit is expanding to cover 3 new legislative regimes: Conduct of Financial Institutions (CoFI), Insurance Contract Law (ICL) and Climate-Related Disclosures (CRD).

A summary of the 3 regimes is set out below.

• Conduct of Financial Institutions (CoFI) Regime: This regime will require all registered banks, licensed insurers and licensed non-bank deposit takers that provide relevant services and associated products to consumers to be licensed by the Financial Markets Authority. It will also require these institutions to have “fair conduct programmes” in place across their business that are designed to ensure compliance with a principle to treat consumers fairly.

• Insurance Contract Law (ICL) Regime: This regime will reform insurance contract law so that insurance better meets consumer and insurer expectations. This includes strengthening protections for consumers against unfair contract terms in insurance contracts and measures to assist consumers understanding of insurance policies.

• Climate-Related Disclosures (CRD) Regime: This regime will make climate-related disclosures mandatory for affected reporting entities under the Financial Markets Conduct Act 2013.

The FMA’s funding from 2022/2023 onwards is insufficient to enable it to meet its new legislative mandate under these regimes.

What we are seeking feedback on

The discussion document seeks feedback on:

• 2 different funding options under each of the CoFI, ICL and CRD regimes
• the approach to implementation of the CoFI regime, including the proposed licensing window and
• the options for recovering the FMA’s funding, including proposed changes to the FMA levies paid by financial market participants who are in scope of the CoFI, ICL and CRD regimes.

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