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Philip Macalister
Philip Macalister
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Creating two classes of finance companies

Wednesday 6th of September 2006

Splitting finance companies into two groups sounds, like the Ministry of Economic Development suggests, seems like a reasonable idea, but it also seems to have some problems.

Clearly the big guys will opt-in for Approved Deposit Taker status, which by default will make them far more attractive to investors, particularly the conservative ones. In all likelihood theywill get to compete more closely with banks.

Those falling into the other regime will likely be classed as second class citizens. Especially, as the MED points out, because they will have to make it clear they are not ADTs.

What will be interesting is where the split occurs.

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FMA outlines its latest expectations for advisers
Paul Flood: The danger is that the 'goalposts' (regarding what is acceptable or unacceptable adviser conduct) may be susceptible to change. Our 'Principles based' legal/regulatory environment lends itself to “prevalence-induced concept change” over time, perhaps not so much in the written laws and Code, as in the interpretation of the prescribed principles.
2 days ago Steve Wright
FMA outlines its latest expectations for advisers
Just a tip, if you use more than six, six letter words in a sentence you lose most Kiwi's. So avoid client/adviser confusion when writing your post or article if you would like it read and understood. Ironically, my last sentence was not likely read.
2 days ago Backstage
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4 days ago Jon-Paul Hale
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To correct errors in my previous post: "policies, templates, and controls" should read "policies, processes, systems and controls", and "is more conductive" should read "is more conducive".
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