Cabinet Decisions on the Review of Financial Products and Providers
On 19 June 2007, Cabinet made decisions on the Review of Financial Products and Providers (RFPP).
Financial Products and Providers refer to non-bank financial products and providers and include insurance, superannuation, collective investment schemes, platforms and portfolio management services, non-bank deposit takers, securities offerings and issuers of equity and debt securities.
These products and providers are currently regulated by a myriad of laws, which has led to gaps in coverage, inconsistencies in the regulatory treatment of similar products and unnecessary compliance costs.
The Minister of Commerce has announced changes to the financial sector arising from (or linked to) the Review. Changes are set out in Cabinet papers agreed to by Cabinet in June 2007:
- Reviews Of Financial Products And Providers And Financial Intermediaries - Overview Paper
- Registration of Financial Service Providers
- Trustee Supervisory Model
- Regulation of Non-Bank Deposit Takers
- Consumer Dispute Resolution and Redress
- Institutional Arrangements For Prudential Regulation
A two-phased approach is being taken to introduce legislation to implement the changes.
Phase 1 begins with legislation to implement the decisions relating to:
- Registration of all financial institutions;
- Improved supervision of corporate trustees;
- Improved prudential supervision of non-bank deposit takers (to be advised on and monitored by a single prudential regulator);
- Providing for a comprehensive approach to consumer dispute resolution and redress.
Phase 2 involves decisions by 30 November 2007:
- supervision by corporate trustees of collective investment schemes and debt issuers;
- security offerings disclosure;
- insurer prudential and market conduct regulation;
- regulation of mutuals' governance;
- platforms and portfolio management services.
Background
To improve regulation of non-bank financial institutions, financial products and financial advisers, two separate but related reviews were commenced in 2004 and 2005, being:
Both reviews share the objectives of:
- A sound and efficient financial system;
- Investment which encourages growth and innovation;
- An environment which facilitates wealth accumulation; and
- Confidence in the sector which encourages participation by consumers and market participants.
Both reviews were informed by expert advisory groups and taskforces made up of people from key industry organisations, industry participants, professional organisations and government bodies. Their input contributed to officials' identification of issues and development of proposals for consultation. Officials' proposals for consultation were noted by Cabinet prior to consultation in 2006. Over the three month period allowed for consultation, around 140 written submissions were received on each review. The implications of these submissions for the original proposals have been considered by officials and are reflected in the Cabinet decisions.
Contacts
If you would like to send us comments, receive updates or further information about consultation, please contact us at FPPreview@med.govt.nz
Media Release
Commerce Minister Announces Financial Sector Changes - Minister of Commerce Media Statement
Cabinet Papers
Frequently Asked Questions
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