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Adviser regulation blows the budget

The Code Committee’s exhaustive consultation has pushed adviser regulation beyond its budget this year.

Tuesday, August 24th 2010, 5:44AM 3 Comments

by Paul McBeth

The government had budgeted to allocate $2.9 million, or 27% of its budget, to the implementation of the FAA and all other oversight and supervision, according to the Securities Commission's annual report.

Instead, it spent $5.7 million, or 43% of its total budget, $5.2 million of which was to implement the adviser regulation.

"Costs are over budget because of the unexpected extra work for establishing the Code Committee, funding the ETITO and implementing the FAA regulatory regime," the commission said.

"The Commission balanced its operating deficits on baseline and FAA appropriations with the operating surplus on AML appropriations."

The government injected an extra $3.2 million into the Commission's accounts this year. The regulator spent $3.1 million on other operating expenditure, ahead of the budgeted $2.6 million, due to "greater than expected activity on industry liaison for FAA implementation."

The commission's staff expenses were $600,000 ahead of budget and its members' fees $330,000 over forecast due to "higher than expected staffing activity" for the implementation of the Financial Advisers Act and Anti-Money Laundering Act.

The commission received $12.3 million in government grants, with an unexpected $1.3 million fillip to fund the ETITO's training programme an extra $1.9 million to cover the implementation of anti-money laundering legislation.


Paul is a staff writer for Good Returns based in Wellington.

« Revised Code back in the Commissioner's handsDraft Code sent to Simon Power for approval »

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Comments from our readers

On 24 August 2010 at 8:24 am Independent Observer said:
A 96.5% blow out in budget!!!

Perhaps they need a financial planner...
On 24 August 2010 at 9:42 am adam smith said:
Are these the costs that are going to be levied on those who are authorised? Aren't all costs from 1 January 2009 going to be levied in this first year. Assuming 5000 AFAs, is the part of the levy to cover the 12 months to June 2010 levy another tax of over $1000 a head?
Can the officials estimate what the total levy might be? At this stage I would settle for a guestimate + or - 10%
On 24 August 2010 at 2:07 pm PM said:
'higher than expected staffing activity'!!!Lets stop all staff activity. What exactly have they been doing? All aboard the gravy train. Sounds like another bureaucratic nightmare being created. And the Advisers will be doing the paying.
Commenting is closed



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