The New Zealand Financial Market Authority (FMA) is continuing to prepare for the Financial Markets (Institutional Conduct) Amendment (CoFi) (2022) and has released a set of materials targeting banks, insurance companies, and non bank deposit taking institutions (NBDTs).

In the latest set of materials, FMA has released:

Fair Conduct Program (FCP) Information Table

Guidelines for Licensing Requirements of Financial Institutions

Final standard conditions for financial institution licenses (including summary of main feedback themes and regulatory impact statements obtained through consultation)

The Fair Conduct Plan aims to ensure that companies implement the fair conduct standards required by law, requiring companies to treat consumers fairly.

The FCP information table is a useful resource to assist entities in completing this task and is a necessary part of meeting license granting requirements.

The license requirements guide aims to provide clear guidance on how enterprises can complete the license application process that will start on July 25, 2023.

The standard conditions for financial institution licenses were also finally confirmed after negotiations from July to September.

Clare Bolingford, Director of Banking and Insurance at FMA, said, "FMA has been implementing new legislation and obligations through assistance and support to help the industry understand new requirements. This set of documents will assist institutions in preparing for the implementation of the new system and provide clearer guidance before the development of license applications next year

Regarding the CoFI system

The Financial Markets (Institutional Behavior) Amendment (CoFi) will introduce new regulatory requirements for the behavior of registered banks, licensed insurance companies, and licensed non bank depository institutions, requiring these financial institutions to treat consumers fairly.

Once the new system takes effect (expected to take effect in early 2025), registered banks, licensed insurance companies, and licensed non bank depository institutions that provide services to consumers will need to obtain a financial institution license issued by the FMA to operate. All license holders and their authorized institutions are required to comply with standard conditions.

The FMA will begin accepting license applications from July 25, 2023, approximately 18 months before the new regulations come into effect.