The ABC of authorisation
The Securities Commission has made it clear authorisation applications must be made no later than 31 March 2011 and director supervision Angus Dale-Jones has the simple ABC guide of how to get there.
Friday, October 8th 2010, 5:23AM 
11 Comments
by Jenha White
He says advisers have certainty around three areas: what the Financial Advisers Act requires, what must go in their Adviser Business Statement, and what the conduct and competence requirements of the Code are.
"I think of that as ABC - Act, Business Statement and Code."
He says the next three things - D, E and F - now need to be done: join a Dispute Resolution Scheme, enrol with ETITO and get Financial Service Provider registration or authorisation on the financial services providers register.
He says authorisation applications must be made no later than 31 March for advisers to be authorised by 01 July 2011, but there are lead times for competence examinations and for criminal checking which is part of the registration process.
"People who leave D, E and F until Christmas risk leaving too little lead time to get everything resolved by March.
"In summary: book your assessments with ETITO and join a disputes scheme now."
Jenha is a TPL staff reporter. jenha@tarawera.co.nz
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Comments from our readers
On 8 October 2010 at 7:38 am Bazza said:
And tomorrows important regulator message will be brought to you by the letters G,H and I. Getting fined or Hit with an Injunction if your not sorted by the 1st of December... Panic, Panic Mr Mannering. On 8 October 2010 at 9:11 am Stuart Ayres said:
Indeed,advisers must get on and join a disputes resolution scheme as soon as possible with 1st December loomimg. I am hearing that some advisers consider that they have until 31st March 2011 to register. We understand 31/3 applies only to advisers who are employed by QFE's.Advisers considering their options for an external dispute resolution scheme provider are encouraged to review FDR's proposition at www.fdr.org.nz. We are now primed to receive applications. On 8 October 2010 at 11:19 am Stuart Ayres said:
I stand corrected on the above comments about which advisers the deadline 31/3/11 for registation on the fsp register applies to. I now have it on primary authority it is all financial advisers.My apologies for any alarm my previous advices may have caused. Nevertheless, my authority tells me it is preferred that advisers take responsibility for regsitering as early as possible. On 8 October 2010 at 12:25 pm adam smith said:
1. Is Securities Commission saying they think it will take up to 3 months to process an application for authorisation? I know the law says an investment adviser needs to be an AFA by 1 July 2011, but is this earlier application date simply there for their convenience?
2. Re Registration, I keep hearing whispers that where a sole practitioner adviser operates via a company structure, it might not be necessary to register as an RSP for both the company and the individual? Are there any legs to these whispers and if so, where can I find some official confirmation
On 8 October 2010 at 3:11 pm Trevor Slater said:
Adam:
1. To clarify, the 31 March deadline is a legislative requirement, not based on the expected timeframe for processing Securities Commission applications.
2. You are correct - our understanding is that you will need to register BOTH entities (both the individual and the company) with the Companies Office. However, Financial Services Complaints Limited ('FSCL') charges a single individual fee to provide cover for the individual, the trading name, and the company.
On 9 October 2010 at 12:45 pm adam smith said:
Thanks Trevor, but.....
1. Can you quote the actual section of the relevant Act for the 31 March date please. I have learnt always to RTFM.
2. You have confirmed the FSP law as I understand it. But a number of people who went to the IFA Roadshow have told me that they think they heard a Securities Commission official say that there might be a change for sole practitioners (the change being that only the individual would need to be registered as a RSP). I know its a weird way to announce possible legislative changes via a paid seminar - surely good process would be to make a public announcement to everyone - rather than the select few who had paid to attend the seminars. My initial comment was an attempt (seemingly futile) to get Securities Commission to make an announcement one way or other on the matter - I would have thought their environmental scan would extend to reading Good Returns! I am led to believe their laundrymen are having to work extra hard as they (the officials)react to a seemingly low takeup of applications for exams, registration and authorisation to date. (Your response was a good shot at guerilla marketing for FSCL though, and shows you are on your toes.)
On 11 October 2010 at 9:32 am w k said:
So close to dateline, is there anyone out there who is 100% sure what's to happen? Need someone to give a "I can confirm this", not "my understanding is" answer.
It is wrong for regulators to make advisors guess the interpretation of the Act, they should come out publicly and say "this is what it will be".
An Act should be written in a manner where everyone understands it and there is no dispute as to the interpretation, otherwise, it should be considered very badly written and a waste of money and time. Ultimately, it's the advisors who will be penalized, not the regulators.
On 12 October 2010 at 9:54 am Barry Read said:
W K - You have to register your limited liability company as a Financial Services Provider by the 1st of Dec. You as an individual have to be registered as an FSP as well, but by the 1st of April 2011. Sole Traders who operate as advisers don't have another entity to register so only have to register as an individual. I have confirmed this with the Companies Office again this week after the confusion. Cheers Barry Read On 14 October 2010 at 9:20 am w k said:
Thanks for the info Barry. Apparently it seems that not all are 100% clear about it, and with changes made over the last few months, and as you pointed it out correctly, "confusion". I am only interested in reading news that confirm things, not speculations or "my/our understanding is", etc.
It is not too much to expect things to be 100% clear to all and finalized before setting datelines, NOT set a dateline then start tweaking with changes. No wonder the big budget blowout. A waste of tax payers money and advisors time.
On 14 October 2010 at 9:41 pm Ron Flood said:
A financial adviser must be registered no later than 31 March 2011. At time of registration they must provide details of the disputes resolution body (DSB) they belong to.If a person was so inclined, they could join a DSB and register on the last day. May be cutting things a bit fine, but quite legitimate. On 18 October 2010 at 12:52 pm murray weatherston said:
While I understand a lot of contributors to this blog are trying to be helpful, I have to say that IMHO in most cases they have actually added to the confusion.
Reading this blog from start to finish, one could be excused in thinking that companies have to be registered by 1 December and individuals by 1 April. I do not think that is necessarily correct.
My reading of the final version of the Acts and other orders is that the key determinant of the timing requirement is whether the individual or the company provides only "financial adviser services" or not.
If the provider provides "financial services" wider than "financial adviser services" (e.g. broking services, or "keeping investing administering or managing money securities or investment portfolios of other purposes") then they must be resistered by 1 December.
If they provide only "financial adviser services", then they have till 1 April 2011.
The definitions of all the possible types of services are set out in the relevant Acts.
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