About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds Other Sites:   tmmonline.nz  |   landlords.co.nz
Last Article Uploaded: Saturday, January 18th, 9:24PM
rss
Latest Headlines

Costs of regulation explained

Leaders in the financial services industry were surprised to find in the Budget that the industry would be paying millions of dollars for the regulation of the sector.

Thursday, June 5th 2008, 7:18AM
Good Returns has sought further information from the government about what this money will be used for and how the industry will be paying for it. Information supplied in response to this request shows there was a mistake in the original announcement and that, although the co-regulatory model involving Approved Professional Bodies has been canned, some of the money is earmarked for APB establishment.

Finance Minister Michael Cullen said in the Budget, that $9 million will be provided over the next four years to speed up the introduction of new laws governing financial advisers in a bid to ramp up protection for investors.

The government will spend:

  • $6.1 million of operating funding over the next four years
  • $2.9 million of capital funding for the implementation of new laws to improve the supervision of financial advisers and institutions.
Additional operating costs of $5.1 million and capital costs of $1.4 million will be paid for by the industry.

The operating cost of $6.1 million over the next four years is predominantly additional funding for the Securities Commission to operate its new functions relating to supervising non-bank deposit-takers, trustees and financial advisers.

However, $1.05 million of that allocation goes to the Ministry of Economic Development to pay for additional capacity to support the legal reforms in the sector, such as regulation of financial advisers and financial service providers.

The capital cost of $2.9 million is split in two. Around $1.5 million is flagged for the establishment of a register of advisers and institutions.

The other $1.4 million "is funding (that) will initially be provided by the Government and will be available to industry to assist in setting up APBs," Commerce Minister Lianne Dalziel says. "The APBs will be expected to repay these start-up costs over time, hence the cost will ultimately be borne by industry. I should clarify that the industry funded $1.4 million is actually part of the $2.9 million, rather than additional."

With regards to the operating cost of $5.1 million, this is the estimated operating cost for the first four years of the financial services provider register which will be provided through the Companies Office.

"The costs of the financial services provider register will be passed on to industry in the same way as the costs of other registers. This cost recovery is common practice among a number of registries, such as those with which the financial services provider register is being integrated."

She says these register costs were previously flagged.

"Industry will get a chance to submit on it at Select Committee. It is also important to note that implementation is some time away and there will of course be all due consultation prior to implementation."

« One last attempt at cracking franking credits issueSovereign takes regulation bull by the horns »

Special Offers

Commenting is closed

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
  • Partners Life criticises Vitality
    “bay broker good points but I get the point about premiums increasing when sick. I have Vitality personally and I have qualified...”
    2 days ago by taka dan
  • Don't hold your breath for life insurance reform
    “That's a good observation from @JPHale there. "2% of sales" has even less meaning when you don't know if it's 2% of premiums...”
    2 days ago by Denis
  • Partners Life criticises Vitality
    “I've added Vitaltiy to a number of clients' new covers. I have also sold AIA cover without it. As with all advice it is...”
    2 days ago by BayBroker
  • Don't hold your breath for life insurance reform
    “Having read both the article and the comments I can only agree with what has been said in the comments. Further, I am...”
    2 days ago by BayBroker
  • David Whyte's 5 predictions for 2020
    “@ number 2: LOL - don't hold your breath. And besides, even if they did do it, if someone needs it they should probably already...”
    3 days ago by All hat no cattle
Subscribe Now

Weekly Wrap

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
ANZ 5.19 4.05 4.05 4.49
ANZ Special - 3.55 3.55 3.99
ASB Bank 5.20 3.89 4.05 4.39
ASB Bank Special - 3.39 3.55 3.89
BNZ - Classic - 3.49 3.55 3.89
BNZ - Mortgage One 5.90 - - -
BNZ - Rapid Repay 5.35 - - -
BNZ - Std, FlyBuys 5.30 4.45 4.35 4.55
BNZ - TotalMoney 5.30 - - -
China Construction Bank 5.50 4.70 4.80 4.95
China Construction Bank Special - 3.19 3.19 3.19
Lender Flt 1yr 2yr 3yr
Credit Union Auckland 5.95 - - -
Credit Union Baywide 5.65 4.75 4.75 -
Credit Union North 6.45 - - -
Credit Union South 5.65 4.75 4.75 -
Finance Direct - - - -
First Credit Union 5.85 3.99 4.49 -
Heartland 6.70 7.00 7.25 7.85
Heartland Bank - Online - - - -
Heretaunga Building Society 5.75 4.80 4.95 -
HSBC Premier 5.24 3.54 3.54 3.69
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - - - -
ICBC 5.15 3.18 3.18 3.20
Kainga Ora 5.18 3.97 4.05 4.39
Kiwibank 5.20 4.20 4.30 4.64
Kiwibank - Capped - - - -
Kiwibank - Offset 5.15 - - -
Kiwibank Special - 3.45 3.55 3.89
Liberty 5.69 - - -
Napier Building Society - - - -
Nelson Building Society 5.70 4.25 4.15 -
Pepper Money Near Prime 5.64 - 5.44 5.44
Lender Flt 1yr 2yr 3yr
Pepper Money Prime 5.18 - 4.98 4.98
Pepper Money Specialist 7.59 - 7.39 7.39
Resimac 4.50 4.86 3.89 3.94
RESIMAC Special - - - -
SBS Bank 5.29 4.85 5.05 5.49
SBS Bank Special - 3.39 3.45 3.89
Sovereign 5.30 3.89 4.05 4.39
Sovereign Special - 3.39 3.55 3.89
The Co-operative Bank - Owner Occ 5.15 3.49 3.59 3.89
The Co-operative Bank - Standard 5.15 3.99 4.09 4.39
TSB Bank 6.09 4.19 4.35 4.69
Lender Flt 1yr 2yr 3yr
TSB Special 5.29 3.39 3.55 3.89
Wairarapa Building Society 5.70 4.85 4.99 -
Westpac 5.34 4.15 4.09 4.49
Westpac - Offset 5.34 - - -
Westpac Special - 3.39 3.55 3.99
Median 5.34 3.99 4.07 4.39

Last updated: 8 January 2020 3:37pm

News Quiz

The maximum remuneration model for Australian life insurance advisers is to be set at what?

Upfront 40% + trail 20%

Upfront 50% + trail 10%

Upfront 50% + trail 20%

Upfront 60% + trail 10%

Upfront 60% + trail 20%

MORE QUIZZES »

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com