Cheaper FMA/FAA fee option most popular
A $40 levy on all market participants to fund both the Financial Markets Authority (FMA) and the Financial Advisers Act (FAA) is the preferred option for the majority of submitters to the Ministry of Economic Development’s (MED) discussion document on regulatory funding.
Thursday, July 21st 2011, 5:07AM
by Benn Bathgate
The MED has released stakeholder feedback on the proposals which included options for separate FMA and FAA levies or a single combined FMA/FAA levy.
The favoured $40 option would be levied on all companies, limited partnerships, building societies, credit unions, industrial, provident and friendly societies and advisers.
The feedback on the MED’s preferred option, a separate FMA levy of $910 for registered providers and issuers who are required to file statements under the Financial Reporting Act 1993, was criticised by submitters as not including all beneficiaries of the regulation and for “double charging” financial service provider advisers.
The feedback on a separate FAA levy that would charge $680 for AFAs (QFE and non-QFE affiliated), $140 for RFAs and $8,000 for QFEs, was criticised for a “significant” over collection, problems it could cause with avoidance and market distortions, and the fact that the fee levels “may lead to providers leaving the market.”
The MED option for a combined FMA and FAA levy of $1,800 for financial service providers who are required to be registered and issuers who are required to file financial statements under the Financial Reporting Act was described as “detrimental to smaller market participants.”
The MED said submissions will be published on its website and that Cabinet will decide on the funding options before the general election, with the regulations set to come into force on February 1, 2012.
Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to benn@goodreturns.co.nz
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