by Susan Edmunds
The Government has delayed the introduction of legislation to extend the AML/CFT rules to real estate agents, solicitors and accountants.
It still wants to bring in legislation by the middle of next year but says it will not introduce the bill to do so until the new year.
Chapman Tripp and Bell Gully have called for a single supervisor for all reporting entities when that happens.
At the moment, there are a number of supervisors: The Reserve Bank oversees banks, life insurers and non-bank deposit takers. The Financial Markets Authority supervises investment schemes, brokers and financial advisers. The Department of Internal Affairs is responsible for casinos, non-deposit taking lenders, money changers and anyone who does not fall under the FMA or RBNZ’s watch.
Chapman Tripp partner Bradley Kidd said the supervisors were not doing a bad job.
But he said no matter how hard they tried, there would be inconsistencies across the way they interpreted and applied the rules. “That’s the issue.”
He said a single supervisor would create significant compliance efficiencies and allow for consistent messaging, guidance and approaches to exemptions from the rules.
It would also allow for streamlining of the exemption process.
“Our concern is with the model itself, not the current supervisors,” he said.
Bell Gully said the three existing supervisors seemed under-resourced.
A single regulator would mean better, more focused resourcing, it said.
Kidd said he had heard anecdotal evidence that complying with AML requirements had been tough on smaller financial advisory firms and it was possible that smaller accounting practices might face similar challenges. Justice Minister Amy Adams cited an expected $1.6 billion in compliance costs as one of the reasons the next phase of AML implementation had been delayed.
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