Register under review
The Financial Service Providers Register is up for review after New Zealand regulators were forced to admit they did not know about the activities of a company registered on it that is now facing international market manipulation claims.
Wednesday, April 1st 2015, 6:00AM 
2 Comments
by Susan Edmunds
There are concerns the register is being used by overseas entities wanting the benefits of being associated with New Zealand.
International media have called New Zealand’s company registration processes lax and suggested they may enable misuse of the system. That could cause reputational damage if shell businesses registered here are found to be acting improperly in other jurisdictions.
New Zealand-registered financial services provider London Capital NZ, headed by Bryan Cook, is under investigation.
Cook is being held in a German jail while authorities investigate fraud charges, media reports said.
New Zealand authorities have been forced to admit they did not know that the company was acting as a broker on the GXG exchange in Denmark and was struck off.
In a civil lawsuit running in parallel with the German investigation, in Canada, London Capital NZ is accused of fraudulently manipulating the GXG market to inflate the price of shares in Asia Pacific Gold Mining Investments. It acted as an adviser for the firm.
Cook has rejected the claims.
Australian media said the case demonstrated loopholes in New Zealand company law that seemingly make the country an undercover tax haven.
The Ministry of Business, Innovation and Employment confirmed it was looking at the FSPR as part of its wider review this year.
“The operation of the register, including issues to do with misuse of the register, are being considered as part of MBIE’s review of the Financial Advisers Act 2008 and the Financial Service Providers (Registration and Dispute Resolution) Act 2008,” a spokeswoman said.
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Comments from our readers
There is far more positive with it being public than private, especially for consumers who want to check out the new adviser they are engaging. Though the register in itself needs to display this information in a clearer way for the consumer to intuitively understand.
The term RFA as a description by industry is natural, using it as a designation to represent oneself is already banned as far as I know. Though I agree with the commentary around the designations being unclear to consumers. Being a registered financial adviser I have to explain it every day, if it was simple to the public, I wouldn't have too and that would also mean we've probably got it right too.
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