FMA tells commerce minister CoFI is essential
The Financial Markets Authority (FMA) says the Conduct of Financial Institutions (CoFI) regime “is essential” for it and that the licensing process is complete for most providers with supervision and monitoring work now underway.
Thursday, June 5th 2025, 6:00AM 
4 Comments
by Jenny Ruth
The Financial Markets Authority (FMA) says the Conduct of Financial Institutions (CoFI) regime “is essential” for it and that the licensing process is complete for most providers with supervision and monitoring work now underway.
In response to commerce and consumer affairs minister Scott Simpson’s letter of expectations, FMA chair Craig Stobo says the regulator wrote to all relevant industry chief executives in April setting out its CoFI expectations and focus areas for 2025/26.
“The FMA’s focus is on addressing risks identified during the licensing period and focusing on financial institutions who have not previously self-reported issues regarding fair treatment of customers,” Stobo said in his letter.
The FMA also plans a broader consumer focus for 2026 and will expand its engagement with consumer groups “to ensure their voice is heard throughout our work,” he says.
“We will continue to prioritise work that builds confidence and integrity in the market and reduces harm to investors and consumers.”
Investigating misconduct and providing clear, practical guidance “continues to underpin our work,” Stobo says.
The FMA is “supportive” of removing unnecessary regulatory burden and to reducing barriers to entry.
‘To effectively implement an outcomes-focused approach, we will continue to expand our dialogue with industry and stakeholders,” Stobo says, noting the FMA‘s recent work with Financial Advice NZ “where we jointly considered a market review into access to financial advice” and that offers insights for a way forward, he says.
CoFI came into force from March 31.
The FMA is also in the process of taking over regulation of the Credit Contracts and Consumer Finance Act from the Commerce Commission and Stobo says a project is underway to manage the transfer of people and data and that respective agency leaders “engage regularly to ensure disruption is minimised and the anticipated changes in our operational functions are well supported.”
The FMA maintains “a close working relationship” with the Reserve Bank, the prudential regulator of banks, non-bank deposit takers and insurance companies.
It will continue to collaborate with RBNZ on capital market changes and the Council of Financial Regulators, which the FMA co-chairs.
Stobo said it has initiated a review to evaluate the council’s effectiveness and to identify its future in enabling the better regulation of the financial system.
The FMA will also engage with financial entities at both board and operational levels to ensure the smooth commencement of the Contracts of Insurance Act 2024 to understand their needs and will provide feedback and guidance as needed.
It will also “boldly enforce breaches of financial markets regulation, subject to the constraints of the level of litigation funding, to prevent consumer harm and foster confident participation in financial markets.”
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Comments from our readers
CoFI law requires lenders like Westpac to be acting now in the customer’s best financial interest. Westpac are clearly not here. Borrowing a home loan is one of the single biggest financial commitments a person can make in his or her lifetime hence "somebody" needs to be providing financial advice to the customer.
All the regulatory changes introduced to the financial services industry will be a complete joke now if the above is allowed to pass by the FMA. We might as well just rip up the rule book on what is considered acceptable conduct for a financial services provider in New Zealand.
What was the point of CoFI law if the chief regulator now fails to take any action?
The bank then assesses for an approval / decline decision. I can see why it may not fit a "best interest model", as Dosh only facilitates the application.
What I would be interested in, is how Dosh are funded, and if anything from Westpac such as brokerage, trail etc... then I would have thought that needed to be disclosed?
If its scoped and accepted by the client then its good to go. Scary stuff when you consider the implications at this end of the spectrum vs say car insurance. Not to mention that clients accepting what they don't understand is deeply problematic on many levels.
We are playing with the challenge of 84% of people consider themselves a good driver, demonstrating Dunning Krugers is alive and well with the population.
The reality of people thinking they have enough nouce to manage financial services themselves comes with the challenge they have to have enough nouce to know they don't have the nouce to get it right, but by having enough nouce to know, they have enough nouce to do it.
How do you manage stupid when stupid is too stupid to know they're stupid? An eternal problem access to the internet proved that knowledge isn't the problem!
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