FMA wants overseas crime loophole fixed
Financial Markets Authority (FMA) chief executive Sean Hughes has admitted there is nothing to prevent people convicted of crimes overseas from becoming registered financial advisers.
Tuesday, September 20th 2011, 6:34AM 
6 Comments
by Benn Bathgate
Good Returns reported two weeks ago of two Bay of Plenty insurance advisers that had received court convictions in Australia after misleading consumers over their investment properties, but had still been accepted on the financial services register
"There's nothing to prevent it happening," Hughes said.
He said the FMA had no control over the financial services providers register, which is administered by the Companies Office, part of the Ministry of Economic Development (MED).
"The registrar has no discretion to refuse registration to somebody who holds a conviction from overseas, they can with a New Zealand conviction, but not with an overseas conviction."
Hughes said he was aware the issue was problematic, especially as it held New Zealand advisers to different, higher standards.
"We have discussed this issue with the Minister and with his officials and we have suggested some potential solutions to that because we don't think it's necessarily good for the New Zealand market, or for the integrity of the register that there be a different set of rules for New Zealand people compared to foreigners coming onto the register," he said.
"We would be supportive of any tightening up."
He said that at present, as long as an adviser registered and signed up to a disputes resolution scheme, "then they could operate in New Zealand because the registrar is part of the MED and is unable at this point to refuse them registration."
He agreed the current system was unfair "not only to advisers but to consumers who won't know if their adviser has an overseas criminal conviction or not."
Hughes said the FMA is already conducting surveillance work in parts of the country and while he said it was too early to comment on the findings - he said they hoped to report before Christmas - he was clear that there would be consequences for those not abiding by the new regulations.
He said he sympathised with advisers who were complying with the new regulations, and thanked those who had bought instances of non-compliance to the FMA's attention.
"I think it's reprehensible what they are seeking to do and I sympathise with those advisers' who've done the right thing. We think we've got a responsibility to come down hard on those that are flouting those rules."
Benn Bathgate is a business reporter for ASSET and Good Returns, email story ideas to benn@goodreturns.co.nz
| « FMA outlines Enforcement priorities | Measuring the success of regulations » |
Special Offers
Comments from our readers
In this instance, the FMA should let the MED continue to maintain the register, and introduce a “fit & proper” person rule to determine whether an advisor is appropriate to work within the industry.
Just an idea….
What we have now is a bunch or hastily improvised standards and recommendations that fail to address the real concerns of advisers, and they do not meet the needs of investors.
The FSPR is a limp piece of paper with no substance, and the FMA seems to be an over-zealous watchdog whose intention is to seek out advisers not complying with the standards, rather than looking for ways to help the clients and investors thereby restoring faith in the financial markets.
Education of the masses is the key, not persecution of the advisers.
Commenting is closed
|
|
Printable version |
|
Email to a friend |
"There's nothing to prevent it happening," Hughes said.
"...it held New Zealand advisers to different, higher standards."
Wooden spoon award for officialdom! This is completely the wrong way around. In medicine for example, overseas practitioners who wish to be licensed in NZ need to meet high standards, often ignoring some overseas qualifications and requiring proof of suitability, competence etc etc. It is harder for them than an NZer. And so it should be. The public expect it.
So then how could such an oversight slip into the FAA? In fact this isn't a small thing slipping into the regs, its a massive GAFU carving a large swathe into the integrity and purpose of the whole concept of regulation. It essentially puts out the Welcome mat for every overseas dirtbag and slimeball to come over here and have a go.
Well done. Send the boffins off to hide in their offices and type up a report with lots of words in time for your xmas break, and then start some actual work on it sometime next year.... while in the meantime good advisers have FMA visits, and the loan sharks go uncontrolled, and Mr and Mrs Public keep waiting for a good night's sleep.