By Rob Hosking, guest Blogger
Laws revamping how financial advisers and insurers are to be regulating may yet run afoul of election year.
Three bills – the Financial Services Bill, the Financial Service Providers (Registration and Dispute Resolution) Bill and the Reserve Bank of New Zealand Amendment Bill are already before Parliament’s finance and expenditure select committee.
A fourth, the Insurance Contracts Bill, is yet to be introduced.
The trouble is the workload of that select committee.
‘FEC’, as it is known, usually gets the more complicated laws.
Normally regulation of financial advisers – or the regulation of virtually any non-agricultural industry – would come before the commerce select committee.
But partly because the two financial adviser bills are linked to the Reserve Bank Amendment (which brings insurers under the same prudential regulation regime as banks), partly because the select committee has already dealt with big law changes in the sector (KiwiSaver and the PIE tax regime) and partly, simply because it is Parliament’s most high-powered select committee, the law changes will be argued through in that forum.
The trouble is the select committee is already over-burdened.
For example, it was supposed to have reported back by April or early May on its inquiry into monetary policy.
A draft report has been done, but MPs are still mulling it over. One MP admits the committee’s pre-occupation has been with the emissions trading scheme rules, which have rather blown up in the government’s face (and again, at other times that legislation would have gone to a forum, the local government and environment select committee).
FEC will also shortly be dealing with the annual omnibus tax bill – and it is another illustration of the backlog that that statute, informally known as ‘the May tax bill’ because that is when it is usually introduced, has yet to see the light of day.
The select committee is due to report back on the two financial adviser regulation bills by 1 September. Hearings have yet to start.
Meanwhile the pre-election mood is settling almost tangibly over Parliament. MPs’ minds are on re-election.
What that points to for the financial services industry is two things: either the law changes will be rushed through, to clear the decks before Parliament dissolves, or they will be put on hold until next year.
There is one slight blessing in that – so far anyway – none of the law changes have become political footballs. The downside of that though is MPs have a tendency not to think about them as hard as, say, the emissions trading rules.
All up, it means the industry and its representatives have to prepare for either some hastily enacted legislation towards the end of winter, or a long delay. They are likely to be equally frustrating.
