FSLAB regime not expected to fully take hold until mid-2022

It has released a new fact sheet about the Financial Services Legislation Amendment Bill's progression towards becoming law, ushering in a new advice regime.

As part of that, it has released a new timeline to reflect the likely passage of FSLAB at the end of this year.

It predicts FSLAB will be passed by the first quarter of 2019. The code of conduct for advisers would then be approved and regulations set by the second quarter.

Then, transitional licensing applications would open by the fourth quarter of 2019, six months before the new regime starts in transition form.

There would be nine months between the code being approved and the regime coming into force.

The transitional period would then run until the second quarter of 2022, when every provider would be required to have a full licence to continue to operate in the industry.

MBIE said the time frames were indicative only and would not be confirmed until the bill was passed and the code of conduct approved.

"But the new regime is not expected to begin before the second quarter of 2020."

During the transitional period, new duties and the code of conduct for advisers would be in force, with a competency safe harbour for previous industry participants.

Financial advice providers would have to hold a transitional or full licence and financial advisers would have to be engaged by a financial advice provider. Both would need to be registered on the FSPR.

MBIE said the FMA was still designing the licensing process, which would involve an online application form.

MBIE is developing new regulations that will cover detailed FSPR registration requirements, and disclosure rules for financial advisers. MBIE is also developing regulations to set licencing fees and levies that will apply under the new regime.

Comments from our readers

On 8 October 2018 at 10:32 am Murray Weatherston said:

Is there any concern that T-day (Transition-day) is now kicked further down the road until early to mid 2020 - still around 18 months away?
Given FSLAB 2nd reading occurred with no dissent on any issue, how come the Government isn't pressing full steam ahead to get this vital consumer protection law on the books as soon as possible? A couple of hours of Parliamentary time is all that seems to be needed to do the Committee stages and the 3rd reading. What's holding them back?
But the real slippage seems to me to be the draft Code - CWG has been in session for 14 months so far and we have yet to see any draft Code - there is not even a single draft standard in public view. What's holding them up?

On 9 October 2018 at 7:24 am Compliance Guy said:

interesting...... The FMA sent letters to Banks and Insurance Providers. They got a .... nothing to look at here response.

Then they release a report in July stating that they are considering taking action against some QFEs.

So the corporates cant get it right. New regime is taking the QFE model and down sizing it to a Financial Adviser Practice level.

Except the smaller version wont have the required level of compliance function due to a lack of economies of scale.

So they are about to mass produce a broken model. Maybe they are playing a wait and see. To give the FMA enough time to look under the hood. i get a slight wiff of a Royal Commission here in NZ.

On 10 October 2018 at 7:00 am Murray Weatherston said:

Nope, there is no concern. No one cares.

On 10 October 2018 at 12:10 pm Pragmatic said:

I’m not sure that it’s because no one cares, more so:
1. The impact of Australia’s RC will hit NZ shores irrespective of our Regulators inaction/action
2. I’m really not convinced that the current govt really expected to be in power - hence the masses of working committees, delays & unpreparedness

FSLAB regime not expected to fully take hold until mid-2022

The Ministry of Business, Innovation and Employment has updated the indicative time frames it expects to apply to the new regime for financial advice.

Friday, October 5th 2018, 6:00AM 4 Comments

Comments from our readers

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