Consultation on exposure draft of regulations under the Financial Markets (Conduct of Institutions) Amendment Act 2022 – prohibition of certain sales incentives

The feedback from this consultation was used to inform the drafting of regulations that will put in place a prohibition on certain sales incentives.

In September 2019, Cabinet agreed to regulate sales incentives based on volume or value targets. It was agreed that this regulation would apply to banks, insurers, non-bank deposit takers (together, financial institutions) and the intermediaries of these financial institutions.

Cabinet agreed in February 2022 that financial institutions and intermediaries be prohibited from offering sales incentives based on volume or value targets to their employees (except senior managers and executives), agents and intermediaries.

Volume or value-based sales incentives likely to be captured by the regulations include bonuses or soft commissions such as overseas trips for selling a certain number of financial products.

Please refer to the documents below for more detailed information.

MBIE also consulted on proposed licensing fees for the relevant licence that financial institutions will be required to hold under the new regime. The consultation on proposed licensing fees ended on Wednesday 26 October at 5pm.

Access the proposed licensing fees consultation

Submissions

We received 21 submissions on this consultation. Some personal identifiers have been removed at the request of submitters and 2 submitters requested that their submissions be kept confidential.

View the submissions(external link)