FSPR changes mooted
Businesses are set to be required to offer financial services to New Zealanders, in New Zealand, if they want to appear on the Financial Service Providers Register.
Wednesday, July 13th 2016, 4:59AM
The Ministry of Business, Innovation and Employment has proposed changes to the Financial Service Providers Act that would clamp down on foreign companies registering here to give the false impression they are "regulated" by New Zealand.
MBIE said the ability for foreign firms to register on the New Zealand Financial Service Providers Register (FSPR) had been abused by some.
"[It] allows these firms to misrepresent to overseas customers that they are licensed or actively regulated in New Zealand, and enables them to enjoy a lesser degree of scrutiny overseas than might otherwise be the case," it said.
"The firms in question are setting up superficial New Zealand operations in order to fall within the relatively wide scope requiring registration."
The FMA was given the power in 2014 to ask for an application to be declined, or deregister an entity if it considered that registration was likely to create a misleading impression or damage New Zealand's international reputation.
It has removed about 50 foreign firms so far.
But MBIE said that was not enough.
There was nothing to stop companies from trying to register. "There is little financial or other detriment to an entity that attempts to apply and is unsuccessful. There is therefore little to deter entities from attempting to register on the FSPR to facilitate misuse."
MBIE is recommending businesses have to provide financial services in New Zealand, to New Zealanders to register.
It will undertake further work to refine the details of this requirement.
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