[ Last Updated 29 August 2006 ]
Short Description
Background questions and answers pertaining to stage one of the review of Non-Bank Financial Products and Providers.
Author
Regulatory and Competition Policy Branch
Contents
What Work Is Included in the Review?
It will cover the regulation of superannuation, insurance (health, general and life), offerings of securities and collective investment schemes (unit trusts, group managed funds, participatory securities, contributory mortgages), non-bank financial institutions (friendly societies, credit unions, building societies, industrial and provident societies, finance companies).
Why Have a Review?
The review is essentially a stock-take and evaluation of current regulation. The government is not presuming that the current system is wrong, but financial markets are dynamic and the regulatory system needs to provide for this. The review will build on the business law reform programme the government has been undertaking over the last five years.
It is necessary to consider all of this work together in order to ensure that there is a consistent and effective regulatory framework for the non-bank financial sector. Inconsistencies may lead to unintended regulatory distortions and affect competitive neutrality of financial products.
What about Links with the Australian Regulatory Regime?
Considering Australia will be an important part of the review. It is one of New Zealand's main markets and we have close relationships, both business and cultural, with Australia. The review is being undertaken with an open mind and will be looking at what is best overall for New Zealand.
The review will take the same base approach as the Memorandum of Understanding on Business Law: co-ordination with Australia will be considered but any regime must be appropriate for New Zealand conditions.
How Will the Review Link with Other Trans-Tasman Coordination Work?
Co-ordination work under the MoU on Business Law Coordination (accounting standards, intellectual property, competition) will not be affected by this review.
The review will take into account the proposed mutual recognition of securities offerings and will not undermine or overturn this initiative.
How Does This Review Fit with the Work on a Trans-Tasman Banking Council?
Work on the trans-Tasman banking council, and any other banking related work, is separate to this review. This review is only concerned with non-bank financial products and providers.
What about the Securities Legislation Bill?
This review will not affect the proposals in that Bill but will build on them. This review incorporates the fourth stage of the government's review of securities law. The Bill is stage three of that review.
What Is the Financial Intermediaries Task Force?
The task force was established by the government last year to consider and report on the regulation of financial intermediaries. The Task Force has been asked to consider options for reform that will ensure quality financial information and advice is provided to the public, and assist New Zealanders to make the most of their savings.
For further information see the Task Force on the Regulation of Financial Intermediaries.
What about the Work the Law Commission Has Done on Life Insurance?
The work of the Law Commission and stakeholders input into the work of the Commission will not be lost but will be incorporated into this review and will provide a valuable contribution to it.
What about the Review of Credit Unions?
In principle decisions and processes for changes to the legislation for credit unions have been announced in a media release accompanying this release.
For further information about credit unions see Review of the Friendly Societies and Credit Unions Act 1982.
Where Can I Go to Get Further Information on This Review or to Become Involved?
The review will utilise stakeholder advisory groups, discussion documents and focus groups. For further information see Review of Financial Products and Providers.