Dated at Auckland this 16th day of December 2020.
Nick Kynoch,
General Counsel,
Financial Markets Authority.
Statement of reasons
This notice comes into force on 15 March 2021 and is revoked on 14 March 2026.
The notice exempts certain Australian financial services licence holders and their representatives, on conditions, from certain requirements in the Financial Markets Conduct Act 2013 (the Act). The provisions relate to providing financial advice services to New Zealand retail clients on an offshore basis.
The main effects of the notice are that—
Australian licensees are not required to hold a New Zealand market services licence to act as a provider of financial advice services under the notice:
Australian licensees’ representatives are not subject to the restrictions on who can give regulated financial advice to retail clients on behalf of a financial advice provider in relation to providing financial advice services under the notice:
Australian licensees and their representatives are exempt from the following statutory duties in relation to the financial advice services provided under the notice:
the duty to meet standards of competence, knowledge, and skill provided in the code of conduct:
the duty to comply with the other standards in the code of conduct:
the duty to make prescribed information available.
Terms and conditions under this notice include requirements that—
an Australian licensee must have procedures that give reasonable assurance that the licensee and its representatives comply with relevant Australian regulatory requirements when giving regulated financial advice to a New Zealand retail client under the notice as if that advice were given to a retail client in Australia; and
an Australian licensee give a disclosure statement to a retail client in New Zealand before any financial advice services are provided to the client; and
an Australian licensee and its representatives must not engage in any conduct that is intended to induce or solicit New Zealand retail clients or is likely to have that effect.
The exemptions under the notice do not apply to regulated financial advice that is given to a retail client in New Zealand through a digital advice facility.
The Financial Markets Authority (the FMA), after satisfying itself as to the matters set out in section 557 of the Act, considers it appropriate to grant the exemptions because—
Australian licensees are licensed by the Australian Securities and Investments Commission (ASIC), and those licensees and their specified representatives are regulated by ASIC and subject to the Australian regulatory regime. That regime seeks to achieve similar aims and provide broadly comparable protections overall to the New Zealand financial advice regime; and
certain statutory duties under New Zealand law will continue to apply to Australian licensees and their specified representatives, and New Zealand retail clients will be given a disclosure statement so that they aware of the nature of the exemptions; and
the exemptions will ensure the availability of advice for New Zealand retail clients from Australian licensees and their representatives that would be unlikely to be available otherwise given the costs of compliance with dual licensing and regulation if the exemptions were not in place; and
Australian licensees will be required to be registered on the New Zealand financial service providers register and to be members of a New Zealand dispute resolution scheme. This will provide New Zealand retail clients with independent access to redress; and
the FMA’s relationship with ASIC, which involves sharing of information and co-operation arrangements, will enable the FMA to seek assistance if enforcement issues arise; and
as such, the FMA is satisfied that granting the exemptions is desirable in order to promote a number of purposes of the FMC Act, specifically promoting the confident and informed participation of businesses and consumers in financial markets, and avoiding unnecessary compliance costs; and
the exemptions only apply in limited circumstances, specifically to Australian licensees without a New Zealand place of business that provide limited financial advice services to certain retail clients in New Zealand from offshore and who do not engage in conduct that is intended or likely to induce or solicit retail clients in New Zealand to use their services. As such, the FMA is satisfied that the exemptions are not broader than is reasonably necessary to address the matters that gave rise to the exemptions.
Issued under the authority of the Legislation Act 2012.
Date of notification in Gazette: 18 December 2020.
This notice is administered by the Financial Markets Authority.