The Ministry of Business, Innovation and Employment confirmed last month that it was reviewing the FSPR after regulators had to admit they did not know about the activities of a company registered on it that is now facing international market manipulation claims.
While the Registrar of Companies maintains the FSPR, the FMA has powers to direct the Registrar to remove companies where it is likely that a company is giving a false or misleading impression about the extent to which it is regulated in New Zealand.
International media have called New Zealand’s company registration processes lax and suggested they may enable misuse of the system. That could cause reputational damage if shell businesses registered here are found to be acting improperly in other jurisdictions.
New Zealand-registered financial services provider London Capital NZ, headed by Bryan Cook, is under investigation.
Cook is being held in a German jail while authorities investigate fraud charges, media reports said.
New Zealand authorities have been forced to admit they did not know that the company was acting as a broker on the GXG exchange in Denmark and was struck off.
The FMA has concerns that some offshore companies have registered on the FSPR primarily to take advantage of New Zealand’s reputation as a well-regulated jurisdiction. The FMA has received complaints from offshore investors who have lost their money to forex companies, or other types of service providers operating abroad that are registered on the FSPR.
“We are aware of instances where the FSPR is not being used for its intended purpose. This is taking advantage of New Zealand’s good reputation for being a well-regulated jurisdiction and a good place to do business,” said Liam Mason, FMA General Counsel.
So far this year the FMA has removed 23 entities from the register. The FMA has also taken action to prevent a further 20 firms from completing registration on the FSPR.
The FMA is concerned that local registration agents in New Zealand are facilitating the registrations of these entities, including by taking a role as a director and by providing local registered office facilities to these offshore companies. These activities give the appearance of offering a financial service from New Zealand, when in fact the substantive business, where there is any, takes place offshore.
The FMA will look closely at the ability of such directors to carry out their duties under the Companies Act, especially where multiple directorships are held.
| « Ministry needs to better understand disputes schemes: FSCL | Sovereign finally confirms intention to sell Select » |
Special Offers
No comments yet
Sign In to add your comment
© Copyright 1997-2024 Tarawera Publishing Ltd. All Rights Reserved