While the IMF’s New Zealand Financial System Stability Assessment report generally showed that New Zealand’s financial sector was fundamentally sound, it did highlight gaps in the regulatory system, specifically regarding market intermediaries.
The report says, “While securities and futures dealers that are exchange members are subject to high entry standards and ongoing oversight, most other categories of market intermediaries are subject to little or no oversight.”
Sovereign believes that a review of New Zealand’s regulation of intermediaries is essential to provide a transparent and efficient industry going forward. We endorse the IMF’s report and would wholeheartedly support a more effective regulatory environment. Such an environment would provide all-round benefits for the consumer, intermediary and manufacturer of investment, insurance and mortgage products by introducing greater integrity and accountability in the industry.
The requirements that the report suggests include:
Sovereign urges Government and its authorities to act quickly to provide New Zealand with an international standard intermediary regulatory system. The Ministry of Economic Development has included investment advisers in its review of securities trading law – due for public consultation soon.
This is an excellent opportunity for Government to act on the IMF’s recommendations.
By bringing the intermediary market in line with other parts of our financial service industry we can ensure New Zealand is well placed with a robust and well regulated environment which will benefit all parties involved.”
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