Financial Markets Authority (Levies) Amendment Regulations 2019

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Regulations

1 Title

These regulations are the Financial Markets Authority (Levies) Amendment Regulations 2019.

2 Commencement

(1)

Regulation 11 comes into force on 25 November 2019.

(2)

These rest of these regulations come into force on 29 June 2020.

3 Principal regulations

These regulations amend the Financial Markets Authority (Levies) Regulations 2012 (the principal regulations).

4 Regulation 3 amended (Interpretation)

(1)

In regulation 3, revoke the definitions of custodian, DIMS, DIMS retail provider, DIMS retail service, DIMS wholesale provider, FMC offer, funds under management, leviable event, scheme, and total managed assets.

(2)

In regulation 3, insert in their appropriate alphabetical order:

authorised body has the same meaning as in section 6(1) of the FMC Act

custodian has the same meaning as in section 6(1) of the FMC Act

DIMS means a discretionary investment management service (as defined in section 6(1) of the FMC Act)

DIMS retail service means a DIMS that is a retail service (as defined in clause 35(2) of Schedule 1 of the FMC Act)

DIMS wholesale provider means a person who—

(a)

provides a DIMS; but

(b)

is not a licensed DIMS retail provider nor an authorised body providing the DIMS under a market services licence

FMC Act means the Financial Markets Conduct Act 2013

leviable event, in relation to a person included in a class, means the event specified for the class in column 3 of the levies table

licensed DIMS retail provider means a person that holds a market services licence that covers the service of acting as a provider of a DIMS (including a person treated as holding a licence under clause 84 of Schedule 4 of the FMC Act) if that person provides a DIMS retail service (whether or not they also provide a DIMS that is not a retail service)

licensed financial advice provider means a person that holds a market services licence that covers the service of acting as a provider of a financial advice service

market services licence has the same meaning as in section 6(1) of the FMC Act

relevant funds under management has the meaning given in regulation 7A

relevant total managed assets has the meaning given in regulation 7

(3)

In regulation 3, replace “Financial Markets Conduct Act 2013” with “FMC Act” in each place.

5 Regulation 6 amended (Meaning of total supervised interests (class 4))

In regulation 6(1)(a), delete “or, in the case of a person deemed to be included in class 4 under regulation 9, at the time of the leviable event”.

6 Regulation 7 amended (Meaning of total managed assets (class 5))

(1)

In the heading to regulation 7, after Meaning of, insert relevant.

(2)

Replace regulation 7(1) with:

(1)

In these regulations, relevant total managed assets, in relation to—

(a)

a person (A) that holds a market services licence that covers the service referred to in section 388(a) of the FMC Act, means the total value of the assets of—

(i)

all schemes for which A is the manager; and

(ii)

all schemes for which the manager is an authorised body that provides that service under A’s licence:

Example

Company A holds a licence that covers acting as a manager of registered schemes. A’s subsidiaries B and C also provide this service under A’s licence (as authorised bodies).

The total value of the assets of the schemes managed by A is $4 billion. The total value of the assets of the schemes managed by B is a further $800 million, and the total value of the assets of the schemes managed by C is $400 million. The relevant total managed assets is $5.2 billion.

A must pay a levy of $310,500 under class 5 (see paragraph (b) of the item relating to class 5 in the levies table).

(b)

any other manager (D) in class 5, means the total value of the assets of all schemes for which D is the manager.

(3)

After regulation 7(2), insert:

(3)

In this regulation, scheme means—

(a)

a registered scheme in which managed investment products have been issued under an FMC offer (within the meaning of section 5(3) of the FSP Act); or

(b)

a scheme that is treated as being a registered scheme under clause 22(1)(a) of Schedule 4 of the FMC Act.

7 Regulation 7A amended (Meaning of funds under management (class 6A))

(1)

In the heading to regulation 7A, after Meaning of, insert relevant.

(2)

Replace regulation 7A(1) with:

(1)

In these regulations, relevant funds under management, in relation to a licensed DIMS retail provider (A), means the sum of the following:

(a)

the total value of the investors’ portfolios of all of the investors that use a DIMS retail service provided under A’s licence as at the end of the relevant accounting period (based on the values referred to in subclause (2)):

(b)

the cash held under a DIMS retail service provided under A’s licence as at the end of the relevant accounting period.

(1A)

Subclause (1) applies to all DIMS retail services provided under A’s licence whether provided by A itself or by an authorised body.

Example

Company A holds a licence that covers a DIMS retail service. A’s subsidiaries B and C also provide DIMS retail services under A’s licence (as authorised bodies).

The total value of investors’ portfolios (and cash) for A’s service is $1 billion. The amount for B’s service is a further $500 million and the amount for C’s service is $200 million. The relevant funds under management are $1.7 billion in total.

A must pay a levy of $16,100 under class 6A (see paragraph (b) of the item relating to class 6A in the levies table).

(3)

In regulation 7A(3), before “DIMS”, insert “licensed”.

(4)

In regulation 7A(4), replace the definition of investor with:

investor has the same meaning as in section 6(1) of the FMC Act

8 Regulation 8 amended (Persons included in prescribed classes of specified persons must pay levy)

In regulation 8, replace “9” with “10”.

9 Regulation 9 revoked (Persons deemed to be included in classes 4 and 5)

Revoke regulation 9.

10 New regulation 10 inserted (Maximum levy relating to financial advice providers)

Before regulation 11, insert:

10 Maximum levy relating to financial advice providers

(1)

The maximum levy payable on a leviable event by a person in class 6G in the levies table (in relation to class 6G) is $92,000 (inclusive of goods and services tax).

(2)

This regulation does not affect the person’s duty to pay a levy in relation to any other class or in relation to any other leviable event.

11 Schedule 1 amended

In Schedule 1, after clause 2, insert:

Provisions relating to Financial Markets Authority (Levies) Amendment Regulations 2019

3 Sole adviser practice not required to pay levy on registration under FSP Act

(1)

This clause applies to a body corporate (A) if,—

(a)

on or before 28 September 2020, A makes an application; and

(b)

A is relying on regulation 6 of the Financial Service Providers (Exemptions) Regulations 2010 at the time that it makes the application (or, if the application is made after that regulation is revoked, A relied on that regulation immediately before its revocation).

(2)

Making the application is not a leviable event under class 1 (and, accordingly, a levy is not payable for that application).

(3)

In this regulation, application means an application under section 15 of the FSP Act to be registered as a provider of a financial advice service.

12 Schedule 2 amended

(1)

In Schedule 2, item relating to class 4, delete “(but see regulation 9)”.

(2)

In Schedule 2, replace the items relating to classes 5 to 6D with the items relating to those classes set out in Schedule 1 of these regulations.

(3)

In Schedule 2, after the item relating to class 6D, insert the items set out in Schedule 2 of these regulations.

(4)

In Schedule 2, item relating to class 7, replace “6D” with “6G”.

(5)

In Schedule 2, replace “Financial Markets Conduct Act 2013” with “FMC Act” in each place.

Schedule 1 Items replaced in Schedule 2

cl 12(2)

5

Registered FSPs that are managers.

This class does not apply to the extent that the manager is an authorised body providing the service referred to in section 388(a) of the FMC Act under a market services licence held by another person (but subject to regulation 7(1)(a)(ii)).

Supplying an annual confirmation to the Registrar of Financial Service Providers under section 28 of the FSP Act

Registrar of Financial Service Providers

If the relevant total managed assets—

(a)

exceed $10 billion, $437,000; or

(b)

exceed $5 billion but do not exceed $10 billion, $310,500; or

(c)

exceed $2 billion but do not exceed $5 billion, $138,000; or

(d)

exceed $1 billion but do not exceed $2 billion, $92,000; or

(e)

exceed $500 million but do not exceed $1 billion, $51,750; or

(f)

exceed $100 million but do not exceed $500 million, $28,750; or

(g)

exceed $20 million but do not exceed $100 million, $7,360; or

(h)

exceed $1 but do not exceed $20 million, $1,610

6

Registered FSPs that are—

(a)

entities (as defined in section 6(1) of the FMC Act) that undertook trading activities on licensed markets in the year ending on the date of the leviable event; or

(b)

contributory mortgage brokers (as defined in section 2(1) of the Securities Act 1978); or

(c)

persons registered for the financial service described in section 5(1)(k) of the FSP Act, other than—

(i)

persons included in class 6A, 6B, 6C, or 6D; and

(ii)

authorised bodies that only provide the service under a market services licence held by a person in class 6A or 6D; and

(iii)

DIMS wholesale providers; or

(d)

persons that hold a market services licence that covers the service of acting as a derivatives issuer in respect of a regulated offer of derivatives (as those terms are defined in section 6(1) of the FMC Act)

Supplying an annual confirmation to the Registrar of Financial Service Providers under section 28 of the FSP Act

Registrar of Financial Service Providers

One of the following amounts (being whichever applicable amount is the greatest):

(a)

if the person is an entity authorised to undertake trading activities on licensed markets, $5,175:

(b)

if the person is a contributory mortgage broker, $2,070:

(c)

if the person is registered for the financial service described in section 5(1)(k) of the FSP Act, $6,095 (but this paragraph does not apply to entities authorised to undertake trading activities on licensed markets):

(d)

if the person holds a market service licence that covers the service of acting as a derivatives issuer in respect of a regulated offer of derivatives, $11,040

6A

Registered FSPs that are licensed DIMS retail providers

Supplying an annual confirmation to the Registrar of Financial Service Providers under section 28 of the FSP Act

Registrar of Financial Service Providers

If the relevant funds under management—

(a)

exceed $2 billion, $41,400; or

(b)

exceed $500 million but do not exceed $2 billion, $16,100; or

(c)

exceed $100 million but do not exceed $500 million, $5,520; or

(d)

exceed $50 million but do not exceed $100 million, $2,760; or

(e)

do not exceed $50 million, $1,092

6B

Registered FSPs that are providers of a regulated client money or property service (as defined in section 6(1) of the FMC Act) other than persons included in class 6(a) or 6C

Supplying an annual confirmation to the Registrar of Financial Service Providers under section 28 of the FSP Act

Registrar of Financial Service Providers

$2,070
6C

Registered FSPs that are custodians and persons providing custodial services (as defined in section 431W(2) of the FMC Act)

Supplying an annual confirmation to the Registrar of Financial Service Providers under section 28 of the FSP Act

Registrar of Financial Service Providers

$7,245
6D

Registered FSPs that provide a crowd funding service or a peer-to-peer lending service (as those services are defined in regulation 185(1) of the Financial Markets Conduct Regulations 2014). However, this class does not apply to a registered FSP that provides the service only as an authorised body.

Supplying an annual confirmation to the Registrar of Financial Service Providers under section 28 of the FSP Act

Registrar of Financial Service Providers

$2,990

Schedule 2 New items inserted in Schedule 2

cl 12(3)

6ERegistered FSPs that are authorised bodies

Supplying an annual confirmation to the Registrar of Financial Service Providers under section 28 of the FSP Act

Registrar of Financial Service Providers

$529 for each market services licence that, in its conditions, authorises the person to provide a market service covered by the licence
6F

Registered FSPs that are financial advisers (as defined in section 6(1) of the FMC Act)

Supplying an annual confirmation to the Registrar of Financial Service Providers under section 28 of the FSP Act

Registrar of Financial Service Providers

$304.75

6G

Registered FSPs that are licensed financial advice providers (but see regulation 10)

Supplying an annual confirmation to the Registrar of Financial Service Providers under section 28 of the FSP Act

Registrar of Financial Service Providers

$258.75 plus—

(a)

$205.85 for each nominated representative who, at the date of the annual confirmation, is currently nominated under section 431T of the FMC Act by the licensed financial advice provider; and

(b)

$205.85 for each nominated representative who, at the date of the annual confirmation, is currently nominated under section 431T of the FMC Act by an authorised body to give financial advice under the licence held by the licensed financial advice provider; and

(c)

$847.55 if the licensed financial advice provider gives regulated financial advice to its clients on its own account under section 431D(1)(b) of the FMC Act

Martin Bell,
for Clerk of the Executive Council.

Explanatory note

This note is not part of the regulations, but is intended to indicate their general effect.

These regulations amend the Financial Markets Authority (Levies) Regulations 2012 (the 2012 regulations).

A transitional provision relating to sole financial adviser practices comes into force on 25 November 2019. The rest of the regulations come into force on 29 June 2020.

These regulations make changes in connection with the new regime for financial advice services under the Financial Markets Conduct Act 2013. This regime is being introduced by the Financial Services Legislation Amendment Act 2019.

The main changes are as follows:

  • the way levies are calculated for managers of registered schemes and providers of discretionary investment management services is changed (see classes 5 and 6A in Schedule 2 of the 2012 regulations and regulations 6 and 7 of these regulations). The levy that a market service licence holder pays is now based on the total service provided under the licence (whether the service is provided by the licence holder itself or by an authorised body):

  • authorised bodies that provide services under a licence will pay a new levy under new class 6E in Schedule 2 of the 2012 regulations (see Schedule 2 of these regulations). This levy is $529 for each licence that authorises the person to provide a service. This levy applies instead of paying a levy under other classes as a provider of a service:

  • new levies are added for financial advisers ($304.75) and licensed financial advice providers ($258.75 plus amounts based on the number of nominated representatives who act under the licence and an amount if the provider gives advice on its own account). See new classes 6F and 6G in Schedule 2 of the 2012 regulations and Schedule 2 of these regulations.

Other amendments have been made as a consequence of the Financial Services Legislation Amendment Act 2019.

The levies prescribed by the 2012 regulations are inclusive of goods and services tax.

Regulatory impact assessment

The Ministry of Business, Innovation, and Employment produced a regulatory impact assessment in June 2019 to help inform the decisions taken by the Government relating to the contents of this instrument.

Issued under the authority of the Legislation Act 2012.

Date of notification in Gazette: 24 October 2019.

These regulations are administered by the Ministry of Business, Innovation, and Employment.