Prickly CoFI legislation to be kept but reformed

After saying, during October’s election campaign, that the legislation would be scrapped, Commerce and Consumer Affairs Minister Andrew Bayly now says it will not be discarded but undergo a targeted review to ensure good conduct obligations are proportionate and fit-for-purpose.

In a speech to the Financial Services Council, Bayly said the review will include reinforcing the principle that businesses applying for a licence under CoFI have the responsibility for determining what is an appropriate fair conduct programme for their specific needs – in essence a proportionate approach.

The review will also require the FMA to issue clear guidance for smaller institutions to meet minimum requirements of conduct.

To put the FMA requirements into context, Bayly says it is essential all financial institutions have in place fair conduct programmes that cover how they engage appropriately with their clients and customers; develop new policies and products to be fit for purpose and meet regulatory requirements; establish transparent fee structures and charging arrangements with intermediaries; and, develop an adequate complaints processes.