Draft Code sent to Simon Power for approval

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The Commissioner for Financial Advisers David Mayhew has approved the draft Code of Professional Conduct for Authorised Financial Advisers, and sent it to the Minister of Commerce Simon Power for his approval.

Thursday, September 2nd 2010, 4:20PM

by Jenha White

Mayhew says approving the draft Code is a significant milestone towards  implementing the new regulatory regime.

He says it is clear that the Code Committee consulted widely when preparing the draft Code and it has included minimum standards on all the required matters. 

"I am satisfied that the Committee has discharged its obligations and produced a draft Code which is consistent with the legislation. 

"I'm now pleased to be able to forward the draft Code to the Minister of Commerce for his approval. 

"This is a very important step towards the new era of regulation for the industry."

Under the FAA, the draft Code must include provisions for minimum standards for professional conduct covering ethical behaviour, client care, competence, knowledge and skills and continuing professional development. 

Mayhew also wanted to be satisfied that the draft Code was consistent with the purpose of the legislation and sufficiently clear so that financial advisers understand their obligations and the disciplinary committee will be able to enforce the Code.

Code Committee chairman Ross Butler says the Committee is pleased to see another major step has been taken.

"The most important thing is that it gives advisers, companies and associations confidence and certainty to know what the regime involves and to get ready."

He says the timing of approval by the Commissioner fits nicely with the availability of the provision of training and assessments by ETITO and training providers. Advisers have between now and 1 December to get authorised.

Butler says the Committee now waits in anticipation for the Minister to consider and approve the Code.

The only grounds the Minister has for disallowing the Code is if it is inconsistent with the Financial Advisers Act 2008 (FAA).

Butler says the Committee has done its homework very well to ensure it has met that obligation, including liaising with government advisers and agencies whom the Minister is also likely to call on.

The Act allows the Minister to review the Code for up to 90 days.

Mayhew believes the draft Code should go a long way towards restoring investor confidence.

He says the Code will be the tool for imprinting professionalism on those financial advisers in New Zealand who provide personalised advisory services to retail investment clients. 

It also forms the benchmark for adequate consumer protection standards for such services provided through corporate entities such as retail banks.

Jenha is a TPL staff reporter. jenha@tarawera.co.nz

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