This notice, which comes into force on 24 September 2022 and is revoked on 14 March 2026, exempts certain overseas custodians of scheme property from the requirement in regulation 87 of the Financial Markets Conduct Regulations 2014 (the Regulations). That is a requirement to obtain an assurance engagement from a New Zealand auditor that covers the New Zealand assurance engagement matters specified in regulation 88 of the Regulations.

The exemption applies to an overseas custodian who obtains assurance engagements in 1 or more of the jurisdictions listed in the Schedule that together cover all of the scheme property of registered schemes held by the custodian or its sub-custodians.

This notice applies to relevant periods that end on or after 24 September 2022 but before 14 October 2025.

This notice is substantially similar to the Financial Markets Conduct (Overseas Custodians—Assurance Engagement) Exemption Notice 2018, which is revoked on the close of 23 February 2023. That notice covers certain relevant periods that end before 24 September 2022.

The Financial Markets Authority (the FMA), after satisfying itself as to the matters set out in section 557 of the Financial Markets Conduct Act 2013 (the Act), considers it appropriate to grant the exemption because—

• the exemption applies only to custodians who have their principal place of business outside New Zealand and who obtain assurance engagements in 1 or more of the jurisdictions listed in the Schedule that together cover all of the scheme property of registered schemes held by the custodian or its sub-custodians:

• the exemption applies only in relation to jurisdictions in which custodians are required to obtain assurance engagements from auditors who are subject to auditing standards and oversight that are broadly equivalent to those applying in New Zealand. The FMA is therefore confident of the comparability and quality of those overseas assurance engagements:

• if a custodian obtains an assurance engagement with an auditor who is registered or licensed to provide assurance engagements in one of those jurisdictions and complies with the regulatory requirements in that jurisdiction, the costs associated with requiring the custodian to also obtain an assurance engagement with a New Zealand auditor in compliance with regulations 87 and 88 of the Regulations would outweigh the benefits to investors and be unnecessary compliance costs:

• the securities regulators in the jurisdictions listed in the Schedule are signatories to the International Organization of Securities Commissions Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information. The audit regulators in those jurisdictions are signatories to the International Forum of Independent Audit Regulators Multilateral Memorandum of Understanding Concerning Co-operation in the Exchange of Information for Audit Oversight. The FMA will therefore be able to seek assistance from relevant regulators if enforcement issues arise:

• the FMA is satisfied that granting the exemption is desirable in order to promote a number of purposes of the Act. Specifically, it will ensure appropriate governance arrangements that allow for effective monitoring, avoid unnecessary compliance costs, and promote flexibility in financial markets:

• the exemption is limited to overseas custodians obtaining assurance engagements from overseas auditors who are subject to audit oversight that is broadly equivalent to that in New Zealand. The FMA is therefore satisfied that the exemption is not broader than is reasonably necessary to address the matters that give rise to it.